After multiple delays, the long-awaited Ethereum 2.0 merger is just around the cornerofficially scheduled for September 19, 2022. The upgrade will revamp the entire ETH ecosystem and change the increasingly inefficient concept of proof-of-work to proof-of-stake: allowing stakeholders to validate transactions and earn rewards.
With the update drawing near, the BestBrokers analyst team decided to take a bird’s-eye view of the largest known Ethereum stakeholders.
turns out staking platform Lido is the largest ETH stakeholder with 4,152,128 Ether staked or nearly 31% of the total wagered. This amount would be equivalent to 129,754 validators, since each of them needs to stake 32 ETH on the Beacon chain..
Cryptocurrency exchanges Coinbase, Kraken and Binance have 1,973,824 ETH (14.68%), 1,138,720 ETH (8.47%) and 895,744 ETH (6.66%) respectively. The total amount wagered by the 4 largest mentioned is 8,160,416 ETH or 60.69% of all ETH wageredyes
The largest holders to date – Source: Dune Analytics
“The merger will be a great evolution for the Ethereum network. Electricity consumption is expected to drop by 99.95%, which is huge, especially in the context of the current energy crisis”, comments Alan Goldberg, analyst at BestBrokers.
What is the change about?
Since the first block was mined in July 2015, proof of work has always been the way to protect the ethereum blockchain. This means that miners would use energy-intensive mining rigs to perform mathematical calculations of ever-increasing complexity in order to “undermine” the following blocks and ensure the operation of the Ethereum blockchain. This would require more and more electrical power to the point where the combination of economic and energy crises could make mining unprofitable and jeopardize performance of the entire blockchain.
In December 2020, a new proof-of-stake blockchain, called Beacon, was introduced to Ethereum.which holds all previous transactions from the main network (Mainnet) original. Its goal is to reduce network maintenance energy costs by 99.95% and also lay the groundwork for future scalability upgrades not possible with proof-of-work. Since then Beacon has been running parallel to the Proof-of-Work Mainnet and allows users to stake coins to become the so-called “validator” and get a share of the rewards for maintaining the network after the change, scheduled for September 19, 2022. If the user is caught trying to manipulate the blockchain with malicious intent, they can lose their staked Ether.
A standard deposit of 32 ETH is required to be a validator of ETH 2.0 transactions. Although most users do not have such an amount, they still can participate by joining a group on various platforms and start earning rewards based on your contribution.
The user base and popularity of Lido, Coinbase, Kraken, and Binance make them the obvious leaders in the validator count. As Lido is the leader in ETH deposits, its validators number 129,754, while the combined number of validators across all four platforms is 255,013.
Number of validators per company (exchange) – Source: Dune Analytics
“With the shift from proof-of-work to proof-of-stake, many people are predicting an increase in Ethereum prices as staking on Ether is supposed to bring huge profits and rewards. While such an increase is not certain, mainly due to current market conditions and recession fears, it is definitely a big step towards the future of blockchain technology as a whole.”, he concluded.
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