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Ethereum Proof Of Stake - What Now?

The merge happened. While there was no bang post-merge of activity or ETH price, Ethereum has been chugging along as usual. In this analysis, block activity, validators, Ethereum Whales, and Ethereum stakers are analyzed to see what they have been up post-merge and how behavior has changed from the transition to proof of work

Total Number of Validators

Proof of Work was quite expensive resulting in close to 9 miners mining 70% of the total Ethereum blocks. What is interesting is that even though it requires 32 ETH which is much cheaper than mining equipment, there is still a large concentration in who is validating the blocks post merge with 75% of blocks being validated by the top 9 validators which include the likes of Coinbase, Kraken, and others. While there are many more validators online, the larger validators hold most of the ETH granting them the ability to validate more blocks. This could be concerning as they may be more prone to control things. Hopefully, more validators can come online to help decentralize the network even further. Around 50% of the miners have only mined 1 block so far. This is expected and as validators stay on line, the retention rate should be much higher than proof of work for miners. Additionally, the validator number is quite high for Ethereum already. Only 5620 miners existed on proof of work and within a few weeks proof of stake is almost there

The Whales of Ethereum

Looking at the top 10,000 biggest wallets on Ethereum we can gather the following:

Only about 10% of whale wallets have been active post merge
For the most part, most of these wallets have been collecting more ETH than removing ETH from their wallets. This could be due to the momentum of the merge or due to the value of $ETH right now
Leading up to the merge there was

s an increase in the number of transfers whales were doing. This same pattern has been happening post merge as well.

Leading up to the merge, active whale wallets per day was increasing and peaked on the merge. Active whale wallets has been decreasing per day
The volume out of Whale wallets increased leading up to the merge. There was a large period of increasing the amount of ETH in their wallets but right before the merge, there was a strong dump. After the merge, it appears whales have been collecting more ETH again

Staking Post Merge

Highlights for staking pre and post-merge:

The amount of ETH being Staked has increased post-merge, with similar behavior being seen by the number of new stakers and active daily stakers.
Post Merge, there the number of daily stakers/ new users is mostly Lido users
Unlike leading up to the merge where most of the staked ETH was coming from Lido, post-merge the most popular choice has been ‘Direct Staking’

Conclusion

While it may not seem like alot has happened since the merge there have been some noticeable changes since the beginning of Proof of Stake. A few insights to take away from this are:

The blockchain has remained the same with the number of blocks validated being the same.
There are close to 500+ validators actively validated the blockchain each day. This is much larger the the number of miners which was decreasing as the merge grew closer
Like Proof of Work, most of the validation is being done by a few validators that roughly are validating close to 70% of the network
Ethereum Whale were quite active before and after the merge. They are still collecting as much Ethereum as they can and the volume coming into their wallets has increased during the merge
Daily active stakers, new stakers, and total amount staked has all increased alot post merge.
While before Lido was doing most of the volume for staked ETH , direct staking has now surpassed the amount of staked Lido ETH post merge

Block Activity

The average number of blocks has been quite steady post-merge around ~7100 blocks per day. Similarly, the block size has been steady at 80k. As Ethereum has gotten more popular, block size went up. Post Merge, there may have been an increase in block size as demand or activity went up, but we have not seen that yet. Similiarly the average number of transactions per block since the merge has gone down perhaps due to less activity on the network

Validators

There have been around 500+ validators post-merge. The number of active validators has been slightly decreasing in the past few days. This is positive to see so many validators already validating the network as proof of work leading up to the merge was only seeing 70 miners validating the network. This is one positive after switching to Proof of Stake. Additionally, many new miners are coming online each day

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