On December 1, the digital currency market was a major event for nearly a year, and “ETH2.0” finally ushered in the moment of launch. At 20 o’clock that night, the much-watched ETH 2.0 beacon chain creation block was officially launched.
The goal of ETH2.0 is to improve its scalability, security and programmability. According to its plan, the upgrade route of the ETH network is roughly divided into three steps, namely the PoS beacon chain, multi-sharding, and state execution. Currently, only the first step of the upgrade has been completed. Ethereum founder Vitalik Buterin said not long ago that after the future upgrade is completed, the ETH network TPS is expected to increase to 25,000 to 100,000. However, industry insiders believe that ETH2.0 still has a long way to go. If the overall plan of the ETH2.0 roadmap is to be fully realized, it will probably take 3 to 5 years.
With ETH2.0 taking a critical step, as the most important part of it, participating in pledge or running validator nodes has become the focus of the industry. A new wave of wealth effect seems to be in sight, attracting many investors. At present, digital currency exchanges such as Huobi, Binance and OKEx, blockchain wallets such as TokenPocket and imToken, and blockchain infrastructure service providers such as InfStones, Stkr, RocketPool, etc. have all launched their own ETH2.0 pledged mining services.
According to OKLink data from OKLink, as of 13:57 on December 4, the balance of the current ETH2.0 mortgage address exceeded 1 million ETH, and 31,252 addresses have completed 32 ETH mortgage.
Because of this, ETH has undoubtedly deeply stirred the entire digital currency market once again.
ETH advances into the 2.0 era
As a public blockchain platform for “cryptocurrency and decentralized applications”, ETH’s smart contract function has greatly changed the blockchain world.
However, in the past three years, the development of ETH has been bumpy. On the one hand, after the “Isio” bubble burst, countless investors lost their money and ETH fell into the long night; on the other hand, the much-anticipated ETH2.0 dragged on, the future of miners was uncertain and the community was arguing. Its future is full of big question marks. It is precisely because of various uncertainties that the industry is full of complex emotions about the future of ETH.
In the face of doubt, “painting pie” still needs to be realized by “making pie”.
In order to become a decentralized global computer and replace the current ultimate goal of various centralized applications, ETH has set its long-term roadmap in four stages since its inception, namely Frontier (frontier) and Homestead (homestead) , Metropolis (Metropolis), Serenity (Quiet).
This is the final stage of ETH, the Serenity stage of ETH 2.0. According to its plan, ETH2.0 will be a new network system under a comprehensive revision and redesign. There are four main changes: one is that the consensus mechanism will be changed from PoW to PoS; the other is that the ETH 2.0 network has a beacon chain and 1024 Sharding chain; third, the native token ETH will be destroyed, ETH2.0 will use the new token BETH, which will be exchanged at a 1:1 ratio; fourth, staking will become one of the powerful functions of Ethereum 2.0, and users will become Validator node and get BETH rewards.
It should be noted that ETH2.0 will not be implemented at one time, but is divided into three phases, namely Phase 0 (Phase 0), Phase 1 (Phase 1), Phase 2 (Phase 2), in a parallel advancement state. Among them, Phase 0 is mainly based on the beacon chain, which has been officially launched at 20 o’clock on December 1st; Phase 1 is based on sharding, which mainly involves writing data in the sharding chain while achieving validity and consensus; Phase 2 System integration will begin, and the new virtual machine (eWASM) supports the execution of accounts, contracts, and states.
Kosala Hemachandra, founder and CEO of MyEtherWallet, said that ETH 2.0 still has a long way to go. Basically, after the launch of the beacon chain, ETH will focus on phase 1 specifications and will experience many phase 0-like specifications. Iteration and numerous bug fixes.
On the whole, ETH2.0 is a huge system project. According to the past iteration history of ETH, it will take at least a few years for the complete transition from PoW to the PoS chain. Therefore, this means that ETH2.0 will be parallel to the current ETH1.0 for some time.
Stake continues to rise
The ETH 2.0 pledge has had a profound impact on ETH. “Blue Fox Notes” said that this new attribute of ETH’s production materials will make it more scarce in the future.
After the launch of the ETH 2.0 beacon chain, due to the change in the “consensus mechanism”, the original right to process transactions obtained through the comparison of computing power was changed, and the validator nodes were transferred to verify “activities” such as transactions.
As a node of ETH 2.0, you need to pledge 32 ETH as a deposit, responsible for verifying and organizing new blocks, ensuring block continuity and obtaining corresponding “rewards”. At present, only support from ETH1.0 to ETH2.0, does not support reverse operation.
It must be said that from the perspective of ETH supply and demand, the launch of the ETH2.0 beacon chain will undoubtedly deepen the impact of pledge mining on ETH.
In the evolution of “Opportunities and Impacts of ETH2.0”, OKEx Chief Strategy Officer Xu Kun believes that the opening of ETH2.0 has brought changes in liquidity. At present, POW mining will issue an additional 4.2 million ETH each year. EthHub has estimated the annual additional issuance of BETH, as shown in the table below. In addition, if the verifier is punished, the actual additional issuance will be smaller than this data.
According to Vitalik’s estimation, the pledge amount on the beacon chain will reach 10 million ETH. In the next 1 to 2 years, the total ETH (including ETH 1.0 and 2.0) will be issued approximately 4.7 million annually. At present, the total amount of ETH is about 113 million. According to the annual issuance of 4.7 million, the total amount will reach about 118 million by the end of next year.
It is worth mentioning that as of December 3rd, Eastern Time, Grayscale ETH trust holdings increased by 47,278, and the total holdings were close to 2.8 million ETH; as of December 6, the total amount of DeFi pledge was approximately 6.81 million ETH. Analysts believe that these two parts actually do not belong to the scope of free circulation, and at the same time these two sets of figures are very likely to continue to expand.
In view of this, investors in the currency circle are generally optimistic about the price of ETH, and some even call out 1000USDT/ETH.
“Blue Fox Notes” believes that regardless of whether it can enter deflation, the destruction of ETH by ETH2.0 can reduce its circulation. If this happens, the miners are more concerned about the block rewards of ETH, and the holders will no longer use ETH as a tool for value circulation, and will gradually regard it as a token of value storage. In this case, ETH has two values: one is value circulation; the other is value storage.
Service provider market is popular
In recent days, the ETH2.0 pledge mining service has quickly become popular in the currency circle.
On December 6, ETH developer Philippe Castonguay tweeted that even if the U.S. government can shut down every ETH node in the United States, there will still be about 8,000 nodes in the world, which is more than the total number of ETH nodes we had a few months ago. need more. In addition, ETH2.0 creates an important incentive mechanism for people to run nodes, which may be the reason for the 40% increase in network nodes in the past few months. The more validators that join the competition, the stronger the network will be, and this is just the beginning.
However, analysts believe that due to the special requirements for validator nodes in ETH2.0, the entry threshold has been raised to a certain extent, which has promoted the demand for ETH2.0 pledge mining services in the market. At present, digital currency exchanges such as Huobi, Binance and OKEx, blockchain wallets such as TokenPocket and imToken, and blockchain infrastructure service providers such as InfStones, Stkr, RocketPool, etc. have all launched their own ETH2.0 pledged mining services.
For example, Huobi Global announced on November 30 that it will support the ETH 2.0 verification node pledge function, and launched the ETH 2.0 one-click pledge function. Through this function, users can pledge ETH to BETH with one click and participate in pledge mining of ETH 2.0. Huobi Global will select the opportunity to open BETH transactions based on the pledge.
Huobi Research Institute believes that more blockchain technology service providers are expected to provide similar services in the future. It not only lowers the participation threshold of ETH2.0, allows users to easily participate in pledges, but also solves the problem of lock-in assets. The liquidity problem comes. Judging from the current trend, it is inevitable for large suppliers to provide ETH2.0 pledged mining services. This is actually equivalent to PoS mining pooling. The pledge income is obtained through the form of coin mining. The big scene of Ethereum staking ecology.
Xu Kun said that there are three main modes of ETH2.0 pledge service, namely, node technical service, retail collective pledge, and decentralized matching. The first type is to provide technical services for node building, for users who hold 32 ETH; the second type is for users who do not meet 32 ETH, collective mining, similar to a mining pool model; the third type, some DeFi platforms are nodes Operators and ETH holders are matched.
Huobi Research Society reminds investors that when investors pledge their ETH to the ETH2.0 network, they cannot transfer their ETH, nor can they redeem it. This will not be able to circulate until the second phase of ETH2.0 is implemented. According to the developer’s estimation, this process will take about 2 years. This means that staking users participating in ETH 2.0 need to lock their positions for about 2 years.
