The concentration of Ethereum’s dApps might eclipse proof-of-decentralization
A heated discussion on Reddit on Friday rekindled the debate over whether the computing infrastructure built on Ethereum is too centralized. According to Chain, approximately 32% of all Ethereum nodes run on Amazon AWS servers. However, Amazon says the number is closer to 25%. Morgan Creek co-founder Anthony Pompliano became aware in 2020 when he tweeted, “Jeff Bezos might close Deere-based DeFi apps by closing AWS.” Since 2020, not much has changed about the progress of Ethereum node decentralization. However, Bambi’s tweet was not entirely accurate.
The figure below shows the percentage of hosted Ethereum nodes running on AWS. At first glance, this seems very troubling because it contradicts Ethereum’s history of decentralization. However, the graph ignores nodes running on computers rather than cloud servers. Hosting service providers are responsible for 67% of nodes, and 29% are located in populated areas. Thus, Verizon, Comcast, Spectrum, and AT&T are responsible for 51% of troubled Ethereum nodes. Thus, Amazon, Verizon, AT&T, Spectrum, and Comcast account for approximately 47% of all nodes in the Ethereum network. This percentage corresponds to the total supply of Ethereum in the United States. The United States has almost 5 times more nodes than other countries. Germany has the highest rating with 11%.
There are currently over 400,000 validators running on Ethereum, each containing approximately 32 Ethereums. The three pools occupy more than 50% of all ETH shares in the Beacon network. Coinbase, Lido and Kraken. A similar risk can be attributed to these pools, as stack developers donate ETH to the pools to remove at least 32 ETH to “unlock the validation key”. The integration was not available natively on the network, leading to a service protocol that helped reduce the need for small investors. The use of AWS does not pose an internal risk to the integrity of the Ethereum blockchain. However, it is a threat if centralized network distribution organizations are attacked and cause major disruptions.