==Introduction==

Ethereum was created in 2015 as a platform for developing decentralized applications. The platform's internal cryptocurrency with which it shares its name became the second most famous cryptocurrency after Bitcoin. The relative simplicity of Ethereum mining, its widespread presence and popularity make many people wonder how Ethereum is mined. \n \n Mining is the process of creating a block of transactions to later add to the Ethereum blockchain. Ethereum, like Bitcoin, currently uses a consensus mechanism called Proof of Work (PoW). Mining is the lifeblood of Proof of Work. Ethereumminers (i.e., the computers running the software) use their time and computing power to process transactions and produce blocks.

The Ethereum Merge of the blockchain on which the world's second largest cryptocurrency is based, will change its protocol to proof of stake, an upgrade that aims to reduce its energy consumption to create new tokens and perform transactions, but could lower security.

==Methods==

In this analysis we will focus on Decentralization Post Merge. More specifically, we will analyze the following data:

• New validators evolution
• Global validators evolution
• Deposits by validators
• Volume deposited by validators
• Validators' deposits by amount
• Distribution of validators by amount deposited
• Slashed blocks over time
• Number of slashed vs non-slashed blocks

In the first graph we can see the new validators evolution. First of all, we can see that the new validators have an irregular trend, going up and down constantly. Just after the Merge the number of validators went up but at the beginning of October they went down. At the end of October it had an upward trend, while in November the values went down. In the total validators we see that from the end of October onwards it went up more clearly. Today there are a total of 35k validators. In the second graph we have analyzed the global validators evolution. We can see that it is a very similar chart to the one explained above. In this case, just after the Merge we can see that the values are a little higher. At the end of October it also shows a rise.

In the following two graphs we can see the deposits by validators and the volume deposited by validators. First, we see that today there are a total of 37k deposits. There is a very stable trend, although at the end of October it seems that the deposits are going up but in a very progressive way. We can also see that there is a total volume of 1,1M. It is growing considerably. There is 25k volume deposited, it grew especially at the end of October.

In the first graph we can see the validators' deposits by amount. Most validators deposit 16 or 32 Ethereums, which is the amount needed to create a node.

In the second graph we can see the distribution of validators by amount deposited. We see that 90.7% of validators deposit 32 Ethereums, while 9.28% deposit 16 Ethereums.

==Key insight==

• the new validators have an irregular trend, going up and down constantly.

• At the end of October it had an upward trend, while in November the values went down.

• Today there are a total of 35k validators.

• Just after the Merge, in the global validators evolution, the values are a little higher.

• Today there are a total of 37k deposits, there is a stable trend.

• there is a total volume of 1,1M. It is growing considerably.

• In the validators' deposits by amount. Most validators deposit 16 or 32 Ethereums.

• In the distribution of validators by amount deposited, 90.7% of validators deposit 32 Ethereums, while 9.28% deposit 16 Ethereums.

• When compared to the number of validator participants pre-Merger, the network has moved toward greater diversity and security.

  \

It should be noted that Slashing did not exist for miners in Ethereum POW. They just had to deal with opportunity cost as a deterrent to attack the network. Regardless of the level, diversity in a post-Merger Ethereum is a difference of sorts from what it was before the Merge. It is clear that the cumulative participation of Lido validators does not pose an existential threat to Ethereum. When compared to the number of validator participants pre-Merger, the network has moved toward greater diversity and security.