Ethereum Pledges as a service provider accepts deposits from customers and deploys nodes so that their users can earn rewards for authenticating and securing the network. Users pay for the service as a percentage of their pledged revenue or a fixed fee per node. Recently, however, Ethereum pledge providers have faced serious problems and may not be able to meet their service promises to customers. Let's look at why this happens.

Issues facing Ethereum pledge providers

Ethereum pledge providers are dealing with shrinking revenues and rising costs. Revenues from these services have dwindled and management has become increasingly difficult. Their lack of transparency means that customers don't know which Ethereum clients to use, what the hardware and design configurations are, and how this revenue reduction forces them to make design changes to manage costs while hoping to maximize customer returns through pledge.

This is mainly because these services use shared infrastructure models and black-box operations, which make it difficult for retail investors to understand pressure points. Another problem is the complexity of running an Ethereum pledge service business. Many of these services require expensive technical engineering teams in order to make them work properly. As networks become full equity proof networks, the cost of the infrastructure level of pledge as a service provider rises. These costs are likely to continue to increase as the network continues to upgrade.

Macro pressure on Ethereum

For the first time, Ethereum is facing a US interest rate of over 3.5%, and for a long time; Expect to face higher rates through most of 2023. What happens in the US is critical; As in the early days of the Internet, Ethereum has extensive ties to the United States in its architectural values and methods, as the infrastructure and capital are in the United States. So for those who are financially savvy, the rise in borrowing costs, driven by central banks raising global interest rates, means there are no more borrowing options. Combined with a geyser strong dollar, this makes for interesting ground for Ethereum to grow.

Ethereum is a digital asset that doesn't rely on traditional monetary policy to determine its value, but Ethereum and the blockchain need to be connected to the real world to have value. That means Ethereum could easily see demand drop when investors can earn good returns in a less risky asset class.

By 2023, blockchain must begin to value the technology of software development. In 2023, building good software and deploying it at scale in production environments -- and the "good" standards associated with it -- will become very important. The massive actions and goals generated by people building useful, scalable software will be deafening. We will hear less scammers Shouting about speed of trade and proof of the past, future and present. This will force everyone in the field to do meaningful work.

Successful mergers in 2022 and the upcoming Shanghai upgrade (planned for early Q2) will clearly demonstrate how hyperscale software works, drive Ethereum's success, and solidify Ethereum and its Layer 2 solutions as the "Amazon" of blockchain. The next 12 months are a 2001.com moment for the industry. It will also test Ethereum's critical moment in a high interest rate environment, both for builders in the ecosystem and investors.