Germany has the second highest concentration of ETH nodes in the world Germany has the second highest concentration of ETH nodes in the world
Germany has the second-largest concentration of Ethereum validator nodes, thanks to the country’s early entrant advantage in the blockchain sector.
2 min read
Updated: Mar. 1, 2023 at 12:12 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Germany operates one of the world’s largest networks of Ethereum validators, according to the 2022 German Blockchain report published by CV VC Labs.
The report which offers a structural overview of the country’s blockchain ecosystem, also indicated Germany accounts for nearly 6% of Europe’s blockchain funding.
The European country has a 22.8% share of all Ethereum nodes, while the United States leads with 45.3%. Both countries operate more than half of the entire Ethereum ecosystem, which is concerning given the need for optimal decentralization.
According to the report, geographical decentralization means so much for a network’s overall decentralization. Furthermore, the risk of censoring or controlling transactions would be too high where only a few countries dominate validator nodes.
Ethereum’s mission is to become the world’s leading computer of smart contracts, which cannot happen if validation is in the hands of a few players.
Better yet, the numbers have been growing since last year. The percentage share of Ethereum validators in the U.S. was 36.92% in 2021, while Germany’s share stood at 21.16%.
Despite the network’s perpetual growth, the concentration of validators still appears to be higher in particular regions.
Germany accounts for 6% of Europe’s blockchain funding
In 2022 alone, Germany’s blockchain projects raised approximately $8 billion. The total number of projects receiving funding came to 220, while the number of unicorns in the European nation totaled 34.
The report indicates the country received 2.4% of the world’s venture funding and 6% of Europe’s blockchain funding. Interestingly, venture funding value on a quarter-over-quarter basis fell by 50%, whereas deal count soared by 10%.
Equally important, the biggest share of funding went to early-stage blockchain enterprises, which made up 72% of all funding deals.
Most of 2022’s blockchain funding went to innovations in Infrastructure and Development, to which VCs allocated over 55% of all funding. According to the pie chart below, DeFi came second with a percentage funding of 27%, followed by NFTs at 6%.
