More than $33.5 billion worth of Ethereum, or 8.7 million Ethereum tokens have been locked on the ETH 2.0 and this has won the feet of being the biggest contract in the crypto space. The locked Ether can neither be withdrawn nor transferred until the Eth 2.0 goes live and a hard fork which has not been written is required to initiate the withdrawal. The claim was made by a Twitter user who asserted it to be an interesting scenario. The stakers who were investing in the integrity of the protocol were fully aware of this hard fork not being built but kept on staking on the Beacon Chain contract. The terms of the contracts were planned to be released once the Beacon Chain merges with the Ethereum Mainnet. As at the time the Twitter user posted the news, the Beacon chains had not been merged, but as at the beginning of December 2021, the Beacon Chain had merged with Ethereum Mainnet in three different phases, and the complete merger from Proof-of-work consensus to Proof-of-stake consensus will be completed during the first or second Quarter of 2022.
In this article we will look at what the Beacon Chain entails and what the merge means for the Ethereum protocol and the staked tokens.
The Beacon Chain
The Beacon Chain is Ethereum’s approach from a Proof-of-work consensus to the Proof-of-stake consensus. The project might not make much sense to those not familiar with terms like Epoch, and slots, but for those who are, The Beacon Chain is a mighty structure that is well planned. Tagged as the Phase 0 of the switch to the proof-of-stake consensus, the beacon chain is the foundation for other developments like the Altair upgrade, London Hard Fork and the Kintsugi testnet to be built on. The initial fear was that the project will not be accepted by the Ethereum communities since it will ultimately lead to the demise of the mining processes of validating blocks but those fears have been dispelled seeing how widely accepted the project has become.
After the testnet was merged with Ethereum’s mainnet, the ethereum developers beckoned to the Ethereum community to run an extensive check on the project update. Everyone was invited irrespective of the knowledge of blockchain development they had. The merger to the mainnet which started last year December will be completed by latest, the second quarter of 2022.
Details on the ETH 2.0
The ETh 2.0, which started as a dream, is edging closer to reality. Vitalik Buterin, ethereum’s co-founder, has announced that the project is 50% done, but while it took them two years to get to 50%, we can only hope the rest of the project will not exceed the end of the year; the timeframe that was initially given. A lot has gone into the project, and for a project that is touted to host the web 3.0 and make its mark in the metaverse, it is important that the Ethereum developers take their time in ensuring excellence and finesse. We already have a crypto news suggesting that the bad user experience seen on Ethereum and some of its DApps are currently being addressed, and with the ETH 2.0 promising 100,000 transactions per second, we can expect most of the scalability issues experienced to have reduced or fizzled out. You can stake Ethereum on the new consensus, and for now, funds that are staked are locked up until the ETH 2.0 launches.
A few things to note about the ETH 2.0 staking are
- The minimum amount you can stake is 32 ETH.
- There are currently over 276,000 validators, much more than the team envisaged having
- The number of ETH staked has passed 8.7 million ETH or $33 billion in value, making the Ethereum contract the largest contract in history
What to expect in 2022 from the Ethereum consensus
While the whole market is reeling from the effects of the feds planning to increase interest rates, the hopes are that when their tightening process is completed, the true value of the market will show. Currently, the crypto market has a market cap of about $2.13 trillion, with Bitcoin’s dominance reducing drastically. While the former might be temporary due to the bear territory we currently find ourselves, the latter might be a permanent thing with Ethereum rolling out its upgraded protocol in the second half of 2022. Bitcoin’s dominance is not the only thing that would be affected. Many Ethereum killers have soared peddling the narrative that Ethereum is not a scalable option for retail traders. While this has been true so far, it remains to be seen what they would come up with when ethereum rolls up its proof-of-stake and sharding means to scale up its network and reduce congestion. Before the ETH 2.0 rolls out, there are talks of an Ethereum ETF hitting the US markets in the first quarter of this year.
In case you don’t have the 32ETH minimum staking fee required by Ethereum 2.0, you can join Redot’s staking pool to stake. The benefit of this is that you will avoid running your node and still have a low barrier to entry as you would be pulling tokens with other stakers. The Ethereum Explorer shows more details about the Ethereum staking data.