Definition ∞ Ethereum blockchain risk refers to potential adverse events or vulnerabilities associated with operating on or interacting with the Ethereum network. These risks can include network congestion leading to high transaction fees, smart contract exploits, or changes in protocol governance. Security flaws within decentralized applications built on Ethereum also contribute to this risk profile. Understanding these factors is essential for participants in the Ethereum ecosystem.
Context ∞ Ethereum’s transition to a Proof-of-Stake consensus mechanism aims to mitigate some traditional risks, such as energy consumption and certain attack vectors. However, new risks related to validator centralization or protocol upgrades remain under scrutiny. The ongoing discussion involves managing network scalability challenges and ensuring the long-term security and stability of its extensive application layer.
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