Decrypting DeFi is Decrypt’s DeFi email newsletter. (art: Grant Kempster)

Ethereum core developer Tim Beiko took to Twitter on April 12 to announce that the number two crypto network had entered the “final chapter of [proof-of-work].”

If you’re not already up to date on this event, called “the merge,” here’s the scoop: Ethereum is transitioning to a different consensus mechanism called proof of stake (PoS).

Instead of building and maintaining massive farms of computers in the Siberian tundra to maintain your crypto network, PoS-based networks leverage economic incentives.

To join, you simply need to purchase and stake the network’s native cryptocurrency. By staking and performing your validating duties correctly, you’re 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 “slashing,” by the way).

And though Ethereum hasn’t made the transition, the ability to stake ETH has been possible since December 2020.

According to data from Dune Analytics wizard hildobby, there has been nearly 12 million Ethereum staked (roughly $34 billion at today’s prices).

This currently makes up little more than 10% of the entire Ethereum supply.

via Dune Analytics

Understanding the types of stakers also reveals insight into how decentralized this next iteration of Ethereum will be.

These types include solo stakers—essentially someone setting up a computer at home and staking Ethereum manually—staking providers, and pooled staking.

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