How much rewards can Ethereum validators actually receive seven weeks after the merger?

Original text: "Ethereum Merge Scams: How Scammers Took Advantage of The Ethereum Merge to Make Millions" by ERIC JARDINE

On September 15, 2022, the Ethereum merge officially took place (block height 15537394 on the execution layer and slot 4700013 on the consensus layer). Now, 6 weeks have passed since the merge, and we have also collected relevant data from 2 directions (PoS validator rewards and merge-related scams) and drawn some interesting conclusions.

The actual rewards received by PoS validators

Let’s first look at the distribution of rewards actually received by PoS validators. We can draw the following five conclusions:

• Executive rewards are lower than they were in the year before the merger. This is most likely due to the market, not the merger itself;

• At this stage, the rate of return for each validator is highly uncertain. This is because the rewards are "block-shaped", and this situation becomes more serious with the addition of execution layer rewards for validators. About 50% of validators have not packed any blocks, resulting in an annual growth rate of less than 4% for these validators during this period;

• We do not see a clear advantage for large validator pools, but there is not enough data to determine this is the case (e.g. validator pools are not engaging in malicious behavior to maximize their rewards);

• Validators are increasingly outsourcing block packing to third parties. In the six weeks of data analysis, the proportion of validators packing blocks themselves has dropped by more than half;

• Third-party block packers consistently outperform validators that pack their own blocks. Initial data also shows performance differences between different builders.

Merger scams surge in September

During the merger, scams related to the merger stole $1.2 million worth of ETH and became the main scam category in the Ethereum ecosystem.

Most merger scams work in a classic way — scammers (often posing as celebrities) trick victims into sending a certain amount of cryptocurrency in order to “upgrade” to the new Ethereum blockchain and receive more in return (usually double the victim’s initial payment).

The scam invites users to send 1 ETH to an address and receive 2 ETH in return.

This strategy worked many times, as shown in the figure below.

On the day of the Ethereum merger, the scam saw a huge spike in revenue, swindling over $905,000 worth of ETH, while all other Ethereum scams swindled less than $74,000. However, the fraud spike quickly fell back to normal levels within a few days, and scams related to the merger almost disappeared by the end of September.

Merger scams accounted for eight of the top ten Ethereum scams on September 15.

Surprisingly, scams related to the merger had an 83% success rate on September 15, the day of the merger, and a 100% success rate in the days before and after the merger. Such success rates also indicate that scammers are targeting users who lack knowledge about the merger.

Scammers tend to defraud users in the country they live in (probably due to language barriers). In the chart below, we can see some of the countries most affected by the merger scam in September, with the second axis showing the connection to other Ethereum scams.

In the chart, the United States and India have the most victims of merger scams.

Merger scams also appear to target certain developed countries. Finland, for example, is surprisingly "scammed," with three scams targeting only Finland.

Summarize

With DeFi hacks dominating recent headlines, fraud using traditional tactics remains the largest form of crime in crypto. Fraud that exploits user trust will severely impact cryptocurrency adoption. Changes in the crypto industry like mergers are windows of opportunity for scammers, and users’ lack of knowledge can be exploited by bad actors.

The surge in “merger”-related scams clearly shows that the blockchain industry needs to work hard to educate users on what terms such as “merger” mean and what common scams should be avoided.