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The smart contract required to trigger the first phase of Ethereum 2.0 has sufficient funds to begin activating Ethereum’s most ambitious upgrade to date, which will radically change the business model, the use of resources and governance of Ethereum.
The Ethereum 2.0 deposit agreement, which was released in early November, racked up more than 540,000 ETH (worth over $ 325 million) late Monday evening, ensuring that the tag chain for Ethereum 2.0 will launch during the week. next, officially starting the second-largest cryptocurrency change from a proof-of-work consensus mechanism to a proof-of-stake mechanism in hopes of resolving a number of issues, including scalability.
The Ethereum Foundation previously set a soft launch date for December 1, assuming the deposit contract staked 524,288 ETH by November 24, and hit the target with hours to spare, after more than 150,000 ETH were deposited over a 24 hour period. .
The last 25% of the ETH required to trigger the contract was deposited within four hours. The contract only contained 385,440 ETH on Monday at 22:45 UTC.
Ethereum saw its price increase nearly 10% in a 24-hour period on Monday, topping $ 600 for the first time in two years.
To be clear, the network itself is not launching yet. The launch of Ethereum 2.0 will activate a parallel proof-of-stake blockchain called “the beacon chain” to operate in parallel with the existing Ethereum network. The initial phases of its development will not impact existing users and decentralized applications on Ethereum.
The main players in the tag chain when Ethereum 2.0 launches will be validators, the equivalent of miners on a proof of stake network. Like miners, validators earn rewards on the network in exchange for processing transactions and creating new blocks. In order to become an Ethereum 2.0 validator, a user must wager a minimum of 32 ETH through the deposit contract.
At the start of the network, validators are expected to earn approximately 20% annualized reward on their stake ETH. Over 16,300 validators will secure the network at launch.
Enabling the Beacon Chain is the first of four phases of the Ethereum 2.0 migration, which begins with the onboarding of validators and ultimately leads to the complete transition of all users and apps to the new network. There are several theories about how the crypto markets will react to Ethereum’s dual blockchain system in the interim before the full migration is complete.
Speaking of the uncertainty, Danny Ryan, Ethereum 2.0 coordinator and developer of the Ethereum Foundation, told CoinDesk in an interview in July: “I firmly believe that [Ethereum 2.0] adds a ton over time to the intrinsic value of the system … I think the crypto markets are pretty wild and new and people are struggling to figure out how to value these things but in terms of intrinsic value [Ethereum 2.0] is an incredible update that will allow Ethereum to be the backbone of a decentralized Internet. “
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