Before the release of version 2.0, the three key indicators are bullish on Ethereum
Editor's Note: This article comes fromCointelegraph Chinese (ID: CointelegraphChina), Author: JOSEPH YOUNG, reprinted with authorization by Odaily.
Editor's Note: This article comes from
Cointelegraph Chinese (ID: CointelegraphChina)
The Ethereum developer community is about to launch Ethereum 2.0, an important milestone in the multi-year evolution of the blockchain network. Ethereum 2.0 will mark the beginning of a shift from the proof-of-work (POW) consensus algorithm that miners rely on to the proof-of-stake (POS) algorithm. In a POS system, miners are not required to mine blocks and verify transactions. Instead, it is up to the users (or stakeholders) to verify the data on the blockchain.
What is Ethereum 2.0?
According to testnet coordinator Afri Schoedon, there is currently no specific launch date for the 2.0 network. "The final version hasn't been rolled out to customers yet, and the coordinated network testing hasn't started yet," Shelton said.
Vitalik Buterin, the co-founder of Ethereum, also confirmed that Ethereum 2.0 is in progress, and if users want Ethereum 2.0 to be completed in the third quarter of 2020, this may be possible. However, three key indicators show that investors and users are very much looking forward to the completion of Ethereum 2.0 by the end of the year. These three indicators include the growth of Ethereum addresses, the increase in the market demand for Ethereum (ETH), and the increase in user activity on the chain. .secondary title
What is Ethereum 2.0?
related information:
Ethereum 2.0 Staking Explained
Ethereum 2.0 takes longer to upgrade than most blockchain networks, but the complexity of the upgrade process is also unprecedented. So long-term testing work is very necessary. Responding to criticism that the Ethereum developer community is "changing" its narrative and delaying the launch of Ethereum 2.0, Vitalik said:
"People often complain that Ethereum is 'constantly changing', which is wrong. Instead, Ethereum is inherently diversified, which also includes betting on the explosion of at least one of its applications."
Rapid growth of addresses
According to Glassnode’s on-chain data, there are currently 40 million addresses owning Ethereum. In the first quarter of 2018, when the price of ETH reached an all-time high of around $1,400, its volume was below 10 million. Although the price of Ethereum has dropped by 85% since then, the number of addresses has actually increased by 350%.
John Lilic, a business technology developer at ConsenSys, said: "There are only 35 countries in the world with a population of more than 40 million. There are now 40 million Ethereum addresses, and Ethereum is now used more than 80% of the world. % of the country is wider."
The increase in Ethereum addresses shows that retail and institutional investors are more and more evenly distributed in the market, thereby reducing the influence of giant whales on the market. At the same time, it also shows that more and more investors usually buy Ethereum before the release of version 2.0, so that they can pledge their rights and earn rewards, which requires 32 Ethereum. Ether addresses also started to grow massively when the 2.0 version was discussed earlier this year.
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Increased market activity
When Ethereum 2.0 starts, users can complete the equity pledge by transferring 32 Ethereum to the contract. According to reports, Collin Myers, head of global product strategy at the blockchain company ConsenSys, said that 32 Ethereum can earn about 4.6% to 10.3% return through equity pledge. However, due to the hard limit imposed, each investor cannot exceed 32 coins. BitMEX Research Institute wrote in a report on Ethereum 2.0:
"If more than 32 ETH are sent to the contract, these extra ETH will not generate more income. If less than 32 ETH are sent, the transaction will not be activated. Therefore, it should be divided into 32, and every 32 Each Ethereum can complete a separate equity pledge.”
Yield holders can generate income through these 32 ETH, which are worth approximately $6,500 at press time, which has led to a significant uptick in demand for ETH in recent months. Over time, the need to hold Ethereum has attracted many retail investors and institutions. Over the past year, Grayscale Ethereum Trust’s assets under management have grown from $11.7 million to $276.5 million.
As institutions and investors mainly use Grayscale Ethereum Trust to invest in Ethereum in a tightly regulated ecosystem, it can indicate a surge in institutional demand for Ethereum. Arthur, a decentralized finance investor, tweeted:
Long-time Bitcoin (BTC) investors such as Gemini exchange co-founders, Tyler and Cameron Winklevoss, are among a number of high-profile investors who have recently Ethereum also expressed optimism. “We hold a lot and are big fans of ether,” the Winklevoss brothers told Camila Russo, a former Bloomberg reporter and founder of The Defiant.
In the medium and long term, the Ethereum futures market tailored for professional traders and institutions will also undergo structural changes. Following an interview with Cointelegraph, ErisX CEO Thomas Chippas released a physically-settled Ethereum futures contract on the ErisX platform, which allows investors to hold the purchased Ethereum instead of Leave it entirely under third-party management.
“We believe that Ethereum futures have a wider range of market participants, diverse trading targets and time frames, stronger and more resilient markets, and upgraded risk management tools.”
Physically-settled contracts typically have a greater impact on asset prices than other types of derivatives because of their impact on the supply of the physical asset on Ethereum.
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