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<\/span>Ethereum core developer Tim Beiko took to Twitter on April 12 to\u00a0announce<\/a>\u00a0that the number two crypto network had entered the \u201cfinal chapter of [proof-of-work].\u201d<\/p>\n If you\u2019re not already up to date on this event, called \u201cthe merge,\u201d here\u2019s the scoop: Ethereum is transitioning to a different consensus mechanism called proof of stake (PoS).<\/p>\n Instead of building and maintaining massive farms of computers in the Siberian tundra to maintain your crypto network, PoS-based networks leverage economic incentives.<\/p>\n <\/p>\n To join, you simply need to purchase and stake the network\u2019s native cryptocurrency. By staking and performing your validating duties correctly, you\u2019re rewarded with a yield. But if you process fraudulent transactions or fail to accurately validate blocks on the network, you can lose some of the money you have staked (this is called \u201cslashing,\u201d by the way).<\/p>\n And though Ethereum hasn\u2019t made the transition, the ability to stake ETH has been possible since December 2020.<\/p>\n According to data from Dune Analytics wizard\u00a0hildobby<\/a>, there has been nearly 12 million Ethereum staked (roughly $34 billion at today\u2019s prices).<\/p>\n This currently makes up little more than 10% of the entire Ethereum supply.<\/p>\n Understanding the types of stakers also reveals insight into how decentralized this next iteration of Ethereum will be.<\/p>\n These types include solo stakers\u2014essentially someone setting up a computer at home and staking Ethereum manually\u2014staking providers, and pooled staking.<\/p>\n Here\u2019s how it breaks down.<\/p>\n Lido is a pooled staking protocol. Kraken is, well, the crypto exchange. Staked.us is a staking-as-service firm, offering services across all PoS networks. Bitcoin Suisse and Stakefish offer a similar service.<\/p>\n Then there\u2019s address 0xeEE27662c2B8EBa3CD936A23F039F3189633e4C8. Given the sheer amount of Ethereum staked by this address, it may simply be an unidentified address related to another crypto firm.<\/p>\n But it\u2019s currently holding more than $450 million in Ethereum. This is a ton of money for a solo staker running a validator out of their apartment.<\/p>\n Anyway, another standout figure among these\u00a0stats\u00a0is the massive market share that the pooled staking service Lido enjoys. The reason for this is simple though.<\/p>\n On other platforms, you typically need to deposit 32 Ethereum to participate in staking. This is obviously quite a lot for the average enthusiast. Kraken, for example, lets folks deposit any amount. The same is true for Lido and Stakefish.<\/p>\n Unlike other staking services, though, Lido gives you a token in return called Staked ETH (or just stETH). And because this is an ERC-20 token, it can be plugged back into various DeFi protocols.<\/p>\n This means that Lido users can earn a nice yield for staking, but can continue stacking percentage points to that yield by depositing their stETH in various other DeFi protocols.<\/p>\n Decrypting DeFi is our DeFi newsletter, led by this essay. Subscribers to our emails get to read the essay first, before it goes on the site. Subscribe\u00a0here<\/a>.\u00a0<\/i><\/p>\n![\"eth](\"https:\/\/cdn.decrypt.co\/resize\/1536\/wp-content\/uploads\/2022\/04\/unnamed-4.png.webp\")
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