ETH2.0 "cold" start
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Source of information: Twitter
Indeed, compared to the soaring currency prices at the beginning of the ETH2.0 deposit contract, and the pledge amount of more than 20,000 coins a day, the pledge activity of ETH2.0 has slowed down now. The start-up period of ETH2.0 creation is 25 days, 6 days have passed, and the pledge progress of ETH has only reached 10%. As of writing, the number of independent verifiers is 258, and the number of verifier nodes is 1691 (an independent verifier may occupy multiple nodes), which is still far from the 16384 verifiers required for 2.0 launch.
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There is a high probability that the creation of ETH2.0 will not start on December 1st, and the market's enthusiasm for ETH2.0 seems to be overestimated.
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Validators are in an awkward position
If we observe carefully, we will find that many people around us are talking about ETH2.0, but very few actually do pledge and become validators. What everyone really participates in is the ETH secondary market transaction. In fact, Chinese people are very sensitive to investment. Chinese people do not compete to participate in ETH2.0 pledge, which indirectly shows that becoming a validator of the 2.0 network is not so profitable.
Beaconcha.io information shows that the top ten giant whales have pledged 31,840 coins, accounting for more than half of the total pledged amount. In particular, a giant whale with the address "0xbb84d966c09264ce9a2104a4a20bb378369986db" pledged 12,800 ETH by himself, raising the overall pledge level. In other words, the market’s participation in and progress in staking in Phase 0 is actually lower and slower than what you see.
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Top 10 giant whales pledge situation, information source: Beaconcha.io
The reason behind this may be related to the cost that the verifier has to pay and the low rate of return.
The biggest resistance in front of validators comes from the lock-up period of at least 1-2 years. The ETH pledged by the verifier and the rewards obtained through staking have to wait until phase 1 to unlock, at least 1-2 years. For users, it is sacrificing long-term ETH liquidity to bet on Ethereum after 2 years progress and metamorphosis.
The Ethereum network also lacks incentives for validators. The annualized return of users staking ETH shows a downward trend as the amount of ETH pledged in the network increases. When the amount of ETH pledged reaches the threshold for the creation of ETH2.0 - 524,288 ETHs, the annualized return of staking is 21.6%. When the pledge amount reaches 10 million ETH, the annualized rate of return is 4.9%.
Source of information: Eth2 Launch Pad
Compared with the general currency circle investment method, the benefits that ETH2.0 network verifiers can obtain are not enough to attract currency circle users.
Taking this year as an example, if we simply hold BTC and ETH, the yields can reach 74% and 151% respectively in less than a year; if we mine ETH1. Mining income can reach 6 times that of BTC; if it is more aggressive, it is by no means an exception that the short-term yield of this year's liquidity mining project has reached tens or hundreds of times. In contrast, staking ETH in ETH2.0, the highest rate of return is only 21.6%.
Even if you have become a verifier, the verifier does not pay much attention to ETH2.0, and faces some punishment mechanisms. For example, netizen @wslyvh said on Twitter, "To be honest, I have not been actively monitoring my nodes. My biggest loss comes from the instability and loopholes of the network, which is why we need a testnet, but I think a lot of people are going to lose money on staking very quickly."
The ETH2.0 network will deduct tokens from the verifier if they are offline or do evil. If the amount of pledge falls below 32ETH due to the deduction, the verifier will be "dissuaded". Overall, participation in ETH2.0 is still relatively low due to reasons such as long lock-up time and low yield.
who will be the verifier
Beaconcha.io information shows that as of writing, the number of independent verifiers who have pledged 32 or more ETH to the deposit contract is 258, which is still far from the 16,384 start-up standard. Although the participation rate is not high, there are indeed some users participating, so who are these verifiers mainly from?
Beep News learned through the circle of friends that the pomegranate mining pool will soon carry out ETH2.0 "mining". According to Li Bai, the core developer of the mining pool, the current validators of ETH2.0 are mainly foreign participants, mainly developers and capital parties in the original Ethereum ecosystem.
Part of the validator’s participation motivation is as follows: they have some long-held ETH in their hands and do not plan to sell it in the next year or two. In addition, they also have the technical ability to deploy validator nodes, so they will put these coins into Staking , to earn a maximum annualized rate of return of more than 20%.
Of course, there are also some loyal fans of Ethereum in the validator team, such as the giant whale with the address "0xbb84d966c09264ce9a2104a4a20bb378369986db" mentioned above.
As of writing, the giant whale has pledged 12,800 ETH, or about $5.888 million. According to reports from the Hot Wheels community, this giant whale did not "ship" when the ETH price reached a high level, nor did it participate in any profitable activities (such as pledging to collect interest), and now he/she resolutely rushed into ETH2 .0.
"ETH2.0 is too complicated to be understood by domestic novice users, so it is difficult to exchange investment enthusiasm." The technical implementation and progress of ETH2.0 are relatively complicated, beyond the range that many domestic users are willing to patiently understand. In addition, Staking revenue is not high enough to attract users' attention, so domestic participation in staking is still very low, users are mainly active in the secondary market, and ETH2.0 staking is still a "blue ocean market".
However, it is worth noting that some actions from third parties such as exchanges and wallets are lowering the participation threshold for retail investors. Take BiKi as an example. BiKi launched ETH2.0 verification node mining on November 9th. Users can exchange 1 ETH for 1.01 BETH. The platform also opens the BETH/ETH trading pair, and the shares participating in the pledge can be withdrawn at any time.
In doing so, the trading platform is actually resolving the pledge threshold of 32 ETH, and is also releasing the liquidity of pledged tokens, and users’ pledged rights and interests are also endowed with transaction attributes.
In addition to BiKi, third parties including Whale Exchange, WBF, TokenPocket, Ankr, BLOX, Rocket Protocol and other third parties will also launch or have already launched "single order" mining services. Platforms including FTX are proposing plans to release the liquidity of pledged tokens.
The emergence of these third-party services may become a critical point, radiating the scope of stakeholders to more retail investors, thereby promoting the process of ETH2.0 faster. As for whether this will spawn many "big" nodes and lead to the centralization of the Ethereum network, given that the startup standard of ETH2. concern.
Although the start of ETH2.0 was cold, it was revealed today that because of an "unannounced hard fork upgrade", the infrastructure Infura suspended its services, affecting many exchanges and wallet platforms; Technologies such as slices have been practiced and even implemented on other blockchains, and have not achieved good results...
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