The 25-day countdown to the start of Ethereum 2.0 will be delayed any more?

The Ethereum 2.0 upgrade is a high-profile industry event in the blockchain industry in 2020. According to the latest news, the 1.0 version of the Ethereum 2.0 specification has been released. If everything goes according to plan, the Ethereum blockchain 2.0 upgrade will be carried out in early December.

ETH2.0 starts to count down, what role will Phase 0 play? What changes will the market usher in? Will Phase 0 be delayed again?

1. Release of deposit contract

On the evening of November 4, according to a blog report from the Ethereum Foundation, the ETH2.0 technical specification v1.0 was officially released, and the mainnet deposit contract was released at the same time. The contract address is: 0x00000000219ab540356cBB839Cbe05303d7705Fa.

It stated in the article that users can register as an Ethereum 2.0 validator (the person who pledges ETH on the network) and the main Ethereum contract address (where funds will be deposited) in LaunchPad. If users want to run their own verification procedures on Ethereum 2.0, they need to ensure that they have the necessary hardware requirements, technical expertise, and use the Ethereum official to follow the step-by-step instructions.

However, ConsenSys reminded users on Twitter that the funds should not be sent directly to the deposit contract, but the staking mechanism (through the launch pad) should be used to stake the funds.

“Remember: Do not send ETH to the deposit contract! Sending ETH to the contract address will cause the transaction to fail, and it does not mean that you have pledged on ETH2.”

The release and activation of the deposit contract of Ethereum 2.0 means that phase 0 of Ethereum 2.0 will be officially launched. According to the official news released by the Ethereum Foundation this time, the creation time of Ethereum 2.0 is set at a block height greater than 1,606,824,000, which is around 12 noon UTC on December 1st.

However, there are certain prerequisites for network activation. The most critical and most important thing is that the number of validators participating in the pledge on the network must reach 16,384. Each validator needs to pledge 32 Ethereum, that is, there must be 524288 ETH in the deposit contract. That is more than 200 million US dollars (calculated at 400 US dollars). As long as this condition is met, the Ethereum 2.0 phase 0 network will be officially launched on December 1.

2. The role of phase 0 start

Affected by this news, the price of Ethereum soared from $383, and once again broke through the $400 mark, an increase of 5%.

Ethereum 2.0 will be divided into at least 3 stages, namely stage 0, stage 1, and stage 2. As the core of Ethereum 2.0, Phase 0 will launch the “Beacon Chain” as a random number generator for the entire 2.0 network. After the first and second phases, functions such as sharding and smart contracts will be gradually opened. The verifier will provide transaction verification services for the corresponding shards based on the random allocation of the beacon chain.

At the same time, Phase 0 will make the Ethereum blockchain officially switch to the PoS consensus mechanism , and transactions will be verified by people who hold a large amount of ETH. Ethereum 2.0 allows ETH holders to participate in running the network instead of proof-of-work as it is now.

It is worth noting that there will be no actual functions in stage 0. After going online around December, all the ETH 2.0 blockchain in phase 0 can do is verify the block. Tim Ogilvie (Tim Ogilvie), CEO of Staked, a company that handles servers and infrastructure on behalf of stakers, said, “The core functions of Ethereum that you think are not part of Phase 0. You cannot make ETH transfers. Cannot participate in DeFi or other smart contract activities.”

He said that what stage 0 did was to establish a consensus mechanism to protect network security and have sufficient funds to protect all ETH assets. After that, the first phase will allow users to enter and exit ETH in the smart contract, and introduce sharding technology, which is a technology to accelerate the speed of the blockchain, and the second phase will reintroduce our complete smart contract function using ETH1. Ogilvy said that the most optimistic estimate for the first stage is 6 months, while it will take about two years to reach the second stage. “A more conservative estimate is much longer than this. Therefore, it will take several years for Ethereum 1.0 to fully transition to 2.0.” In other words, only a few years later will the ETH2.0 network be like today’s ETH1.0 main network. Play a role.

3. Will Ethereum 2.0 be delayed again?

For Ethereum, it has faced many challenges during the past period. The 2.0 upgrade is not so smooth, it can even be said to be more difficult.

First of all, DeFi (decentralized finance) puts a burden on Ethereum. This year, DeFi has continued a hot summer. Users have invested billions of dollars in DeFi financial products. This boom has led to a surge in Ethereum network activity, and the availability of the Ethereum network has been greatly tested. At that time, people will transfer their hopes to the upgrade of ETH2.0, hoping that it can substantially increase throughput as promised. Subsequently, due to the decline in DeFi popularity, the usage rate of the Ethereum network continued to decline.

Secondly, it is necessary to constantly solve the problems that appear on the test network. According to Ogilvie, in the past year or so, hundreds of bugs may have appeared in various testnets of Ethereum. Even if the developers and testers eliminate these bugs, there may be many other bugs, most of which may be minor. “Perhaps only when real tokens are used on the real network will more serious problems be discovered.”

Regarding the question of whether stage 0 will be delayed, Richard Ma, CEO of the blockchain insurance company Quantstamp, said that there are now many test networks, including 2 specifically for the creation of test beacon chains. The test network created by the block, and there are many bonuses to pay to users who find client problems. “At this point, there won’t be too many problems.”

The key to delay is whether users are willing to serve as validators of Ethereum. If the pledged funds do not reach the value of USD 200 million worth of ETH, this grand network upgrade will not start. Ogilvy said that the problem may be that compared with the newer ETH1.0-based DeFi protocol, the yield of pledge provided by the ETH2.0 client is very low. Moreover, it will take a long time for the pledger to withdraw the staked ETH from the ETH2.0 client.

However, he believes that “the smartest funds may wait and see for a while and find out what ETH2.0 looks like. Even if funds are short, loyal users of ETH and the Ethereum Foundation will provide financial support for the project.”

So far, nearly 19,000 ETH has been deposited into the ETH2.0 contract address, reaching 3.6% of the funds required to start the network. Users can check how far stage 0 is from the start in depositcontract.eth (Ethereum deposit contract), or check the amount and value of ETH pledged in the contract on Etherscan.

Brantly Millegan, the director of operations of the Ethereum Name Service, said that ETH2.0 is just a “puzzle” to solve the bottleneck problem of Ethereum. Other extended solutions, such as layer 2 protocols, side chains, etc. can all play a role.

In any case, even if Phase 0 will not have much functional effect, it is a change in momentum for Ethereum investors to celebrate, and it may also be good news for the price of ETH.