Ethereum 2.0 is intensively brewing the launch of the beacon chain, and the attention of the currency market has been drawn away by BTC.
The bulls stand at the historical high of 19,913 US dollars and expect that when BTC can burst into 20,000 US dollars, it will turn around and fall to 18,894 US dollars at 19:25 p.m. Beijing time. This is more than half an hour before the launch of Ethereum 2.0.
At 20 o’clock in the evening on December 1, the creation block of the Ethereum 2.0 beacon chain was generated as scheduled. At the right time, the 419 million yuan liquidation amount of the entire network was even more spectacular. Ethereum 2.0 is just like its name at this stage, “Tranquility” starts.
Recently, data on the chain showed that the amount of ETH in the Ethereum 2.0 deposit contract address reached 524,288 when the beacon chain was activated, and the storage volume is still increasing, exceeding 872,900 ETH.
ETH holders are using the continuous influx of collateral to swear their beliefs, even if they cannot transfer or trade for at least two years, even if the annualized rate of return will continue to decline.
In the next two years, the Ethereum 2.0 network will continue to evolve, including integrating 64 shard chains to change the congestion status; introducing virtual machines and smart contracts, and merging the 1.0 main network.
Ethereum 2.0 embarks on a new journey of “quiet”, and the market is not destined to be quiet. Before the start of the beacon chain, affected by the drop in BTC, ETH fell from a minimum of $635 to $580, and then rebounded to $615 when 2.0 was launched. The market continued to dive, and ETH fell below $600 again.
It should be noted that before the landing of Ethereum 2.0, the market will still only have one ETH token, and investors should beware of related fundraising or counterfeit currency scams.
Beacon chain creation block generation
As a pioneer in the construction of blockchain networks, Ethereum has brought infinite imagination to the real world since it went live on the main network in July 2015. Smart contracts, decentralized games, DeFi… it paints a picture of decentralization. The beautiful blueprint of the world. But for a long time, limited by its own performance, the speed of the network has restricted the ideal country of Ethereum.
Now, after a long period of planning, Ethereum has finally taken the first step towards a new era. Unlike any previous upgrades, the launch of Ethereum 2.0 is an unprecedented self-innovation. The Beacon Chain will carry the more ambitious expectations of Ethereum.
At 8:00 pm on December 1, 2020, the Ethereum 2.0 network was officially launched, and the genesis block was born on the brand-new blockchain, the beacon chain. Ethereum founder Vitalik Buterin congratulated on Twitter, saying that everything went well.
Previously, on November 4th, the Ethereum Foundation first announced the world entrance of Ethereum 2.0, that is, the deposit contract address of the beacon chain. ETH holders can put at least 32 ETH into the contract address to become a validator, and Contribute to the launch of the beacon chain. At around 10:20 on November 24, the balance of the Ethereum 2.0 deposit contract address reached 524,288 ETH, reaching the minimum standard for starting the genesis block.
The beacon chain was launched as scheduled, and Ethereum 2.0 successfully entered Phase 0 (Phase 0). At this stage, the network does not support account, asset transfer, and running smart contracts. The most important task of the development team is to improve and verify the functions of the beacon chain and realize the transition of PoS (Proof of Stake Consensus Mechanism). During this period, the original PoW chain of Ethereum will continue to operate with the new PoS chain to ensure that the continuity of data will not be interrupted.
In the subsequent phases 1 and 2, Ethereum will integrate 64 new shard chains on the basis of the beacon chain to increase transaction throughput; then virtual machines and smart contracts will be introduced to merge the 1.0 mainnet into In the 2.0 network, it is fully realized to operate under the PoS mechanism. According to official estimates, this will be completed in 2022.
How does Ethereum with PoS mechanism generate blocks?
Overseas developer Andrey Belyakov introduced that Ethereum 2.0 relies on validators to pledge ETH to produce blocks, and deposit 32 ETH to participate in block production. The network randomly selects verifiers from the verifier pool. The selected one will have the opportunity to create the next block, and the successful verification of the block will receive ETH rewards. And if a validator tries to prevent normal block production, the ETH deposited will be fined.
“The difference between ETH 1.0 and 2.0 is that the former is a small road and the latter is a highway.” Ethereum developer Joseph Chow described the improvements of the new generation of Ethereum.
ETH overcollateralization yields drop by 5%
According to the PoS mechanism of the beacon chain, before smart contracts and applications are built, the way for investors to participate in the 2.0 network seems to be only through deposits (staking) to become validators. Moreover, before Ethereum 2.0 is fully implemented, this pledge is a one-way process and cannot be retrieved in a short time.
However, before the start of the beacon chain, the enthusiasm of ETH holders increased significantly. According to data from Oukeyunchain, as of 2 pm on December 1, the Ethereum 2.0 deposit contract address has received 872,900 ETH, and 27,271 validators have completed the mortgage of 32 ETH. This has far exceeded the initial mortgage amount of the beacon chain.
In the previous 24 hours, about 22,560 ETH were pledged to the contract address. At this time, the annualized rate of mortgage yield was about 16.6%, which was lower than the 21.6% when the beacon chain reached the start standard on November 24. According to data released by the Ethereum Foundation, as the amount of ETH participating in the mortgage increases, the annualized rate of return of the mortgage will continue to decline. When the total deposit reaches 10 million ETH, the rate of return is approximately 4.6%.
ETH2.0 PoS expected return curve
The continuous increase in the amount of deposits reflects the optimism of the holders of Ethereum 2.0. The increasing amount of ETH locked in the deposit contract has theoretically formed a deflationary effect. In addition, BTC has driven the market to rise after November 30. ETH also rose.
At 8:00 pm on December 1st, when Ethereum 2.0 was officially launched, ETH was quoted at US$615.65, an increase of 3.06% from the opening price of US$596.8 on the day, and a 62.01% increase from the $380 when the deposit contract address was disclosed on November 4 . However, within half an hour thereafter, ETH dropped 5.79% to $580 for a short time, while BTC dropped 3.83% during the same period. In addition to being affected by the short-term decline of BTC, some people believe that the decline was due to the cashing out of the positive and the shipment of some investors.
Although any investor can put 32 ETH into the deposit contract address, it should be noted that there will be no ETH2.0 tokens before the landing of Ethereum 2.0. There are also certain thresholds for becoming a validator. You need to run the validator node by yourself, pay the cost of the validator, and ensure that the node is active and stable.
If the verifier goes offline and fails to perform his duties correctly, he may receive a “ticket”; if the verifier publishes conflicting block information, he will not only be fined, but may also face the danger of being evicted from the network. The amount of fines ranges from 1 ETH to the total amount of pledge. Developer Andrey Belyakov warned that punishment is easy to prevent and should never happen unless the verifier deliberately commits evil. It’s not hard to hear from Andrey’s words that the fines mechanism is aimed at preventing deliberate malicious acts that threaten network security.
To become a validator of the beacon chain, you also need to have certain operation and maintenance capabilities, which is a threshold for some individual users who hold ETH but do not know how to build a validator.
Where there is demand, there is a market, and some exchanges have launched agency services along the way.
On December 1, the crypto asset exchange Coinbase issued an announcement stating that it will participate in Ethereum 2.0 pledges on behalf of users and support new currency transactions. Users can convert ETH into ETH2.0 (non-real tokens) that is only circulated on the site, and obtain staking rewards through staking.
Coinbase stated that although the pledged ETH 2.0 tokens are still locked on the beacon chain, it will still support transactions between ETH 2.0, ETH and all other supported currencies to provide liquidity for customers. The above functions are expected to be launched in early 2021.
On November 7th, BiKi launched the ETH2.0 verification node mining activity to lower the threshold for users to participate in mining. It also launched a BETH exchange token similar to Coinbase, which can be exchanged in advance by users, with a ratio of 1ETH: 1.01BETH.
During the event, users can convert ETH to BETH, and obtain pledge income from holding BETH on the platform, and can also trade for cash at any time. The minimum participation amount is 0.1ETH. In addition, BiKi stated that it will bear the cost of verification nodes without requiring users to increase their input.
Analysts believe that although large service providers such as exchanges are also unable to transfer the pledged 2.0 ETH, they can circulate in the internal database to form an isolated trading market to provide users with liquidity. This helps them attract users and capital inflows. “It is expected that the subsequent market will have a demonstration effect, attracting more exchanges to provide similar services.”
The construction of Ethereum 2.0 will be a huge and complex project, and there are no more ways for ordinary users to participate in it in a short time. It should be noted that after the start of the beacon chain, there may be scams around Ethereum 2.0 to raise funds or sell counterfeit coins. Investors must arm themselves with common sense and keep their eyes open to avoid being deceived.
It is reported that hundreds of developers around the world will collaborate with each other to build the Ethereum 2.0 network. Users can view the Ethereum Foundation’s GitHub in real time to track development progress. After the Ethereum 1.0 network has gone through the four stages of “Homeland”, “Byzantium”, “Constantinople” and “Istanbul”, it has embarked on a new journey called “Tranquility”, and the market may not peaceful.
