Is Ethereum Proof of Stake Sustainable? $-$ Considering from the Perspective of Competition Among Smart Contract Platforms $-$

TL;DR

This paper examines whether Ethereum's transition to Proof of Stake is sustainable in the face of competition from other smart contract platforms, focusing on its impact on ETH's price and network security.

Contribution

It introduces a framework to analyze the influence of platform competition on Ethereum's sustainability and security post-merge.

Findings

Competition affects Ethereum's ETH price dynamics.

Sustainability depends on market position relative to competitors.

Proof of Stake's security may be challenged by market competition.

Abstract

Since the Merge update upon which Ethereum transitioned to Proof of Stake, it has been touted that it resulted in lower power consumption and increased security. However, even if that is the case, can this state be sustained? In this paper, we focus on the potential impact of competition with other smart contract platforms on the price of Ethereum's native currency, Ether (ETH), thereby raising questions about the safety and sustainability purportedly brought about by the design of Proof of Stake.