Ethereum needs to find a better PoS design before they merge. The state of Eth PoS right now is total centralized garbage all because of poor design.

If Ethereum merges to PoS now, the whole network can be controlled by 3 entities who don't even own 51% of the stake, the coins are given to their custody by users.

The reason is very simple, the design is as bad as I could possibly imagine.

1. There is no non custodial staking (only running your own node), the reason for that is because of slashing. You cannot slash coins that you don't own, so everyone who owns less than 32 Eth can either give his coins to some corporation or not stake at all.

2. You need 32 Eth to run your own validator node, which ofcourse is too much for an average Joe, meaning giving custody of his coins is the only way of staking for him.

Lately youtubers/influencers and other stupid people started to advertise how decentralized Eth PoS is, they like to throw around the number of validators number, without giving any context to it. To me that is newbie hunting advertising and I think everyone who do that is total shithead of a person, that is Luna/Solana/Avax type of advertising and considering how much Eth did for crypto space so far and how big it is, they should absolutely avoid this kind of marketing.

To explain: they say Eth has 400,000 validators and the second best is Cardano with 2,000 validators. They took this opportunity to say Eth is 200 times more decentralised than the second best PoS LMAO, absolutely not. This stat only tells us there is 400,000x32 Eth staked, while more than 200,000 of those "validators" is owned by Coinbase, Kraken and Lido (it doesn't matter if your coins are locked via smart contract, the validators are not operated by SC but by people)

To add to that only 10% of the coins are currently staked, so these 3 companies could control the entire Eth network with 0 stake in the network. All they need is/was that other users lock 5% of total circulating coins with them and the HW to run the validator nodes

So at this stage and with this design Eth must absolutely not merge, this would be awful decentralisation.

Maybe if it isn't too late they should just do ouroboros and forget slashing. At least the % of circulating supply needed to control the network would rise, since people could stake without custodian and chose smaller validator groups/pools.

Besides what harm does slashing do to a custodian, who is staking other peoples coins? Why should they care if their clients coins get slashed?