Ethereum 2.0’s Decentralization Trends

The first backward-compatible update to the Ether 2.0 beacon chain will be rolled out tomorrow on Pyrmont’s test network; the update, called “Altair”, includes several code changes, including a higher penalty for verification errors and improved functionality in the lightweight version of the Eth 2.0 software.

The update, called Altair, contains several code changes, including higher penalties for validation errors and improved functionality in the lightweight version of the Eth 2.0 software.

In this week’s New Frontiers, Alex Svanevik, CEO of blockchain analytics company Nansen, and Nansen’s research team detail the data behind the link between verifier behavior and Eth 2.0 deployment to date.

While Altair is expected to further improve network dynamics, the statistics presented by the authors suggest that security and decentralization are already moving in the right direction.

Below is a summary of last week’s activity on the Ether 2.0 landmark network.

Nansen is a blockchain analytics platform that tracks over 90 million ethereum wallets and accounts.

The article below, written by Nansen CEO Alex Svanevik and his team, is an excerpt from a recent blog post analyzing the data behind Ether 2.0.

While centralized exchanges like Kraken and Binance still account for a large share of all Ether 2.0 bets, they appear to be losing market share to decentralized alternative betting sites like Lido Finance and Rocket Pool.

In Ether 2.0, the four largest stakeholders (Lido, Kraken, Binance, and account for 36.6% of total ETH deposits.

Lido is the second biggest stakeholder in total ETH deposits after Kraken, managing over 750,000 ETH from 9,000 individual Ether accounts in Ether 2.0.


In traditional economics, the Herfindahl-Hirschman Index is a measure of the degree of concentration and competition in a market.
It can also be applied to blockchains to measure the relative decentralization of a network.

Nansen calculates the Eth 2.0 HHI by squaring the share of each source account in the network and adding the resulting numbers.

Of course, not all deposit accounts are independent, but the trend shows a gradual decline in the HHI over time.

However, it is important to remember that the risk of centralization exists at all levels of the blockchain technology stack: according to Ethernodes, over 21% of Ethernet nodes are hosted on Amazon Web Services.

Overview of Deposit Activity

Eth 2.0 deposit activity is strange, erratic, and unrelated to the ETH exchange rate.

Daily Eth 2.0 deposits began to decline after May 5, when ether approached its peak of $4,000.

Between mid-May and mid-June, the number of deposits increased significantly, while the value of ether almost cut in half.

Ether 2.0 represents a major change in the security and economic model for ether and has many implications, including turning ETH into a revenue-generating asset.22

– Stani Kulechov, the founder of AAVE, wants to provide a decentralized alternative to Twitter.

BACKGROUND: Leading developers such as Kulechov and Ether co-founder Vitalik Buterin believe that blockchain technology can be used to create a more sophisticated social conversation.

– Ether is the most popular cryptocurrency in Singapore, according to a survey released on Monday.

BACKGROUND: The survey of more than 4,000 adults, conducted between June 29 and July 9, also found that 67 percent of respondents with personal investments had cryptocurrencies in their portfolios, and that two-thirds of cryptocurrency holders had increased their digital assets during the Crown Plaza outbreak.

– Aave Arc, Aave’s decentralized lending protocol, does not offer Tether (USDT) as an asset, although it is the most commonly used linked currency in Aave. Background: a stablecoin with is largest and most capital cannot be listed on AAVE’s institutional lending platform due to regulatory issues.

Tether’s largest competitor, Circle, will be included in the new pool of coins as a stable USDCcoin.

– Dune Analytics has raised $8 million in a Series A round led by Fred Wilson’s Union Square Ventures. Dune Analytics is known for its DIY capabilities, which allows anyone with little knowledge of blockchain metrics to easily build real-time actionable visual chains and share their creations with the world.

The platform has at least 6,817 different user-built dashboards that allow you to track everything from EIP1559 emissivity to Uniswap trading pairs.

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