Transition to proof-of-stake and informed trading

Hyung-Eun Choi

Finance Research Letters, 2025, vol. 72, issue C

Abstract: Using the Ethereum Merge upgrade — a transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) — as a natural experiment, this study identifies a cooperation channel driven by informed PoS validators, in contrast to the energy-intensive competition among PoW miners. We document that PoS achieves more efficient consensus through shorter block times and higher transaction throughput, and find increased informed trading post-Merge. Our findings suggest that PoS achieves enhanced economic efficiency through informed validator cooperation and stake value maximization.

Keywords: Proof-of-Stake(poS); Proof-of-Work(poW); Ethereum merge; Probability of informed trading (PIN) (search for similar items in EconPapers)
JEL-codes: C70 G00 G14 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S154461232401599X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:72:y:2025:i:c:s154461232401599x

DOI: 10.1016/j.frl.2024.106570

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().