The Ethereum 2.0 mortgage will be launched in July at the earliest. Will ETH ignite the bull market?

Recently, Ethereum 2.0 developer Ben Edgington said at the Ethereal Virtual Summit that the Staking service of Ethereum 2.0 will be launched as early as July this year. As the largest technological transformation in the history of the "big brother of the public chain", Ethereum 2.0 is highly anticipated by the industry, and its progress has always attracted the attention of the community and investors. In the process of steadily progressing according to the plan, 2.0 is getting closer and closer to us. What people expect is not only the efficiency improvement of the blockchain network brought by Ethereum 2.0, but also the change of the economic model, as well as the future value of ETH.

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Staking plans to start in July at the earliest

On May 8, Ben Edgington said in a panel discussion hosted by Ethereum News that the beacon chain (Beacon) is the starting point of Ethereum 2.0, which may be released in a few weeks to a few months. "I'm 80-90% confident that the beacon chain will be live in Q3".

The Beacon Chain (Beacon) is a major milestone in Phase 0 of the Ethereum 2.0 roadmap. By that stage, the Beacon Chain will be the main chain of Ethereum 2.0 and will use the PoS (Proof of Stake) consensus mechanism. At the same time, the beacon chain is also the core of Ethereum 2.0, the "command and control center" of the entire Ethereum 2.0 network. In the initial stage after the launch of this new blockchain, it can coordinate the operation of up to 64 shard chains.

Previously, on April 28, Joseph Lubin, co-founder of Ethereum and founder of ConsenSys, released a new FAQ about the PoS version of Ethereum. Influence. Just like the previous plan, Ethereum 2.0 is planned to be launched in at least three phases, namely phase 0, phase 1 and phase 2.

Among them, phase 0, that is, the beacon chain will be launched in 2020; phase 1 may be launched in 2021, and Ethereum will mainly improve the integration of fragmented chains; during the transition period from phase 1 to phase 2, ETH1.0 The network will be merged with ETH2.0, and the current Ethereum blockchain will become one of the 64 shards of the shard chain; the final stage 2 is an execution stage, and the Ethereum 1.0 network will be completely replaced by the 2.0 network, and various smart Contracts and applications will begin to function, with this phase likely to start in 2021 and 2022.

In phase 0, the beacon chain and the original Ethereum blockchain will exist in parallel, the beacon chain will run under the PoS mechanism, and the original Ethereum will continue to operate as a PoW chain. The beacon chain using the PoS mechanism means that users can stake their Ethereum tokens on the Ethereum 2.0 network, participate in the verification of new blocks, and help maintain the network. In return, users can get corresponding The proceeds of locked tokens. The more tokens staked, the greater the rewards.

Staking is a business model that earns interest by holding coins. Token holders obtain block rewards and dividends through actions such as pledge, voting, delegation, and locking tokens. It is currently widely used in PoS and DPoS projects. In layman's terms, it is a bit similar to depositing money in a bank to earn interest. Investors pledge the corresponding tokens on the platform of the node verification service provider, and the service provider conducts POS and DPOS mining with these tokens, and distributes the profits to investors after obtaining the proceeds.

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The ecological benefits and economic value of "staking"

The Staking mode is not a new way of playing in the industry. It has been popular for a long time and is currently widely popular in PoS and DPoS blockchain systems such as EOS and Tezos. As the most influential public chain, the transformation of the PoS consensus mechanism of Ethereum 2.0 and the Staking model have attracted much attention precisely because of the impact it can bring on the Ethereum network and ecosystem.

On the one hand, the pledge model can not only bring more ordinary token holders into and participate in the ecological construction, making the network more decentralized; on the other hand, it can greatly reduce the issuance and circulation of tokens.

According to the previous introduction of the Ethereum developer, to become a validator on the Ethereum 2.0 network, you only need to deposit 32 ETH into the official Ethereum 2.0 Launchpad. This greatly reduces the participation threshold and investment cost for investors, allowing more retail investors to participate in the governance of ETH and benefit from it. To a certain extent, it can also make the network more decentralized.

In terms of token issuance, Vitalik emphasized the impact of the transition to PoS on the Ethereum network and ecosystem in the latest episode of the POV Crypto podcast, and why such a transition is very suitable for Ethereum and its issuance model. He said: “One of the reasons for PoS is to significantly reduce issuance. According to preliminary calculations, if everyone participates, the theoretical maximum issuance of ETH 2.0 is about 2 million per year.”

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ConsenSys survey results on staking preferences of ETH holders

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Is the "bull market catalyst" still alive?

The issue of network scalability and efficiency is an issue that cannot be avoided by mainstream blockchain platforms, and will also determine its future adoption rate and landing prospects. In the face of this problem, Bitcoin (BTC) chose an off-chain expansion solution such as the Lightning Network, Bitcoin Cash (BCH) chose to expand the upper limit of block capacity, and Ethereum (ETH) chose a path that suits them best - Sharding.

Although the original main motivation of Ethereum 2.0 was to expand the network, improve efficiency, and expand the network ecology. But for market investors, it is often impossible to avoid paying attention to the value of ETH. To put it bluntly, will the price of ETH rise as a result?

In the big bull market in 2017, Ethereum deservedly became a "bull market catalyst" or even an "engine" with its hot ICO craze. So this time, the major upgrade of Ethereum 2.0, and its impact on the ecology and network, can it help ETH appreciate, ignite investor enthusiasm, and bring a wave of bull market?

The answer is worth looking forward to. First of all, the PoS staking model is likely to attract a large amount of funds into Ethereum 2.0 for staking to earn rewards. On the one hand, this brings the demand for ETH, and on the other hand, it brings a reduction in circulation. Coupled with the current growth of DeFi projects, more and more ETH will need to be locked in smart contracts as collateral.

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Grayscale's cumulative inflow fund product distribution map

As the time node approaches, the changes that Ethereum 2.0 will bring to the blockchain and encryption market ecology are more and more worth looking forward to. Although this process is complicated and faces challenges, once it succeeds, it will have great significance to Ethereum and even the entire blockchain ecology.

As the time node approaches, the changes that Ethereum 2.0 will bring to the blockchain and encryption market ecology are more and more worth looking forward to. Although this process is complicated and faces challenges, once it succeeds, it will have great significance to Ethereum and even the entire blockchain ecology.