Merge and ETH staking

What does the new Ethereum validator network look like? Who rules it, and who was less successful? The most surprising aspect of the network is the amount of liquid staking that has developed. 

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The Merge is over, so let’s take a closer look at what changes it has brought to the Ethereum network. We made use of the DUNE website, where programming wizards create various publicly accessible analytical tools.

First, we’ll do a quick recap for anyone who missed this event. The merge indicates the transition from ETH1 to ETH2. Before the Merge, it was a proof-of-work blockchain, but now it is a proof-of-stake blockchain. The process used to require an army of miners with graphics cards, but today all you need is a router-sized box and 32 staked ETH tokens.

Ethereum has been constantly evolving since its inception, but such a large ecosystem cannot be developed flexibly. That's why development is slow, and it will still be years before full-fledged ETH2 reaches us. However, the Merge is one of the most significant checkpoints on the road to ETH2.

By switching to Proof of Stake (PoS), the entire network lost the army of miners who had been ensuring its security until now. Now, network security is ensured by validators. These are computer nodes that, like miners, are rewarded with ETH tokens for their "work" (validated block = approval of transactions).

Below, we will look at some data and information about the Ethereum network website.

The total amount of ETH staked is more than 14 million.

Of the total supply, 11.6% of ETH is staked.

Almost 440,000 nodes and validators, who are in charge of network security, have been created.Of this, so-called liquid staking makes up 1/3.

In total, there are over 80,000 addresses running nodes.

This chart shows the increasing trend of validators and ETH staked. The trend is stable, and I believe it will continue to grow.


In this graph, we look at the history of ETH staking deposits on the ETH2 network, which has run in parallel with the ETH1 blockchain since November 2022. Two weeks before the merger, the number of stake deposits has already increased. 

VALIDATORS

It turns out that CoinBase (a US exchange) is the largest single validator on the Ethereum network. It is followed by other exchanges, such as Kraken and Binance. In the first place is the so-called liquid stake. This is an app where people team up with others to create a node.

The graphs below show the validators' distribution. The first graph shows the validators' distribution by project (corresponds to the table below), and the second divides them into several types.



RocketPool is a more decentralized form of ETH staking. It works on the principle of a pool operator and the users who join him. The pool operator must always have at least 16 ETH, and the remaining ETH per node will be added and locked into the pool by other people. Operators are always paid slightly higher ETH returns than connected users.

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analyst opinion

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Staking has been talked about in the community for years, and many people have a vision of their own node. If Ethereum has a future, then owning an ETH node is like owning a part of the financial sector – basically, like having part of the engine that drives it. And for being part of that engine, participants are rewarded with ETH tokens.

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