Scalability and gas fees
A popular misconception is that the Merge directly reduces gas fees (paid per transaction). This is not the case; gas fees are dependent on block space demand. The Merge does not decrease the demand for block space, nor does it increase block size. However, it does set the groundwork for “sharding”, which will spread out computational workload across the Ethereum network so that each node is no longer responsible for processing the entire network’s transactional load, but rather a small portion of it. These shards (parts of the database) take less computational power to manage, allowing the network’s transaction throughout to scale almost indefinitely at relatively low costs. For reference, the PoW-based Ethereum network could handle 10 - 30 transactions per second (tx/s). This has not changed as a direct result of the Merge. However, the “final” sharded version of Ethereum is expected to be capable of handling ~100k tx/s, according to Vitalik Buterin. This would exceed the 24k tx/s transactions that the Visa network can process.
Concerns regarding decentralization
The primary concern behind the Merge is that a transition to PoS increases the centralization of Ethereum. Recent US regulations banning Tornado Cash – a service used to anonymize Ethereum transactions – has reiterated the extent to which governments can influence a decentralized system. The concern with PoS is that a select few corporations, including Lido, Coinbase, Kraken and Binance are responsible for a large amount of staked ETH. Indeed, these four corporations control a combined total of 54% of staked ETH, which some argue makes the network more vulnerable to changes in government regulation, threatening the idea of an open, free and decentralized system.