ETH2.0: PoS pledge has a profound impact on ETH

Editor's Note: This article comes fromBlue Fox Notes (ID: lanhubiji), reprinted by Odaily with authorization.

Editor's Note: This article comes from

Blue Fox Notes (ID: lanhubiji)

Blue Fox Notes (ID: lanhubiji)

, reprinted by Odaily with authorization.

• With the release of the Ethereum storage contract, people are more and more interested in ETH2.0.

• ETH2.0 is an upgrade to the current Ethereum, and it needs to solve the scalability and cost issues of Ethereum. In the past few months, almost all crypto users have felt deeply: Ethereum is too congested and fees are too expensive. However, ETH2.0 needs to change the consensus mechanism, implement sharding, alleviate the congestion problem of Ethereum, and build a better infrastructure for the DeFi ecosystem.

• So, what is the difference between ETH2.0 and Ethereum today? First, there are two different chains to begin with. ETH2.0 is a PoS chain, which is two different chains from the current PoW chain of Ethereum. The two will eventually merge in the future.

Phase 0 (Phase 0)

Phase 1 (Phase 1)

Phase 2 (Phase 2)

However, these three stages are advancing in parallel, not linear advancement as people imagined. On the whole, ETH2.0 will bring PoS consensus, sharding, new virtual machine (eWASM), etc.

image description

(The ETH2.0 development route that people imagine is different from the actual one, Meeseeking)

Beacon Chain is a PoS chain, and it also prepares for the management of fragmented chains in the future. It involves the management of pledgers, the management of pledged funds; random number generators; random selection of block producers; Voting; rewards and penalties for stakers, and more.

After Phase 0 is launched, the Ethereum network will have two chains, one is the PoW chain with the token ETH1, and the other is the PoS chain with the token ETH2. Users can transfer ETH1 to ETH2 and become validators, but currently it is a one-way move. Users cannot exchange ETH2 back to ETH1.

Phase 2: At this stage, the integration of systems begins. The new virtual machine supports the execution of accounts, contracts, and states, and can transplant familiar tools over. All in all, ETH2.0 is a huge project, and it will take at least a few years to be finally completed.

image description

So, the launch of ETH2.0, what is there to pay attention to for ordinary users?

secondary title

The PoS pledge of ETH2.0 will lock a large amount of ETH

image description

(ETH locked in DeFi, DEFI PULSE)

However, as ETH launches its storage contract, the final locked amount of ETH will far exceed this level in the future. It is estimated that more than 5 million ETH will be deposited in the short term, and in the medium and long term, at least 10 million or more ETH will enter the pledge contract.

With the entry of wallets, exchanges, DeFi protocols, and ETH pledge service networks, it is even possible to reach a pledge deposit of 20-30 million ETH. On the one hand, it is because the barriers to entry are lowered, and most importantly, it is based on the current return on pledge of ETH2.0.image description(The relationship between the amount of ETH pledged and the income, ethereum.org)

It can be seen from the figure that the annualized return can reach 5.72% by staking 10 million ETH, which exceeds the current storage return of ETH in the market. Even if 30 million ETH is deposited, the return rate can reach 3.3%. , and its income is denominated in ETH. If the price of ETH rises, the income will be even higher.

At the same time, if it is considered that a considerable proportion of ETH has been lying in the wallet for a year, it means that the actual circulation of ETH will continue to decline in the future. As PoS matures, ETH will gradually become a low-inflation asset, and may even become a deflation asset with the implementation of the EIP-1559 proposal. For the EIP-1559 proposal, you can refer to the previous article "

• Value Capture of Ethereum EIP-1559 and ETH

• ". It will also be mentioned below.

• At present, many people are worried about whether ETH2.0 can be launched as scheduled, and even more worried about how many people are willing to deposit their ETH into the storage contract. At present, it has just exceeded 100,000, which is still far away from the minimum requirement of 524,288 ETH.

• There are several issues that still need to be resolved. With the resolution of these problems, first, the launch will not be a problem, but sooner or later, there is a high probability that the launch will be completed within this year; second, with the emergence of more and more ETH2.0 pledge service networks, ordinary users will also You can participate in the pledge of ETH2.0. These pledge service networks will solve the following problems:

The problem that the small amount of ETH cannot participate. A pledge service network like Rocket Pool, according to its plan, only needs 0.01ETH to participate in pledge and earn the proceeds;The technical threshold of verification nodes. Although setting up a node is not too complicated, it is quite troublesome for most ordinary users, and the pledge service network can help users solve this problem;》。

Liquidity issues for pledged tokens. At present, many people do not participate in the pledge because they are worried that after ETH is transferred to the storage contract, they will not be able to transfer or withdraw temporarily. The pledge network can give users corresponding equity tokens after users deposit ETH. For example, in Rocket Pool, users will get rETH, and rETH can be traded, pledged, etc., without worrying about liquidity issues.

Punish risk issues. Many users are worried that they will be punished for participating in the pledge. With the pledge network, this pressure can be alleviated through distributed deposits.

At least a dozen projects like Rocket Pool, Ankr, Stafi, Lido, liquidsatke, stakewise, codeFi, etc. are currently underway. On the one hand, these projects can solve the problem of ordinary users participating in staking, and on the other hand, these projects themselves are worthy of attention. At present, there are many players on this track, and there is no real leader. You can pay attention to the follow-up user experience and word-of-mouth of these projects, so as to find related opportunities. For more information, please pay attention to the previous article of Blue Fox Notes "

Rocket Pool's ETH2.0 business

If ETH2.0 locks more than tens of millions of ETH, this will greatly reduce the ETH circulating in the market. At the same time, with the development of DeFi, there may be a situation where the demand for ETH exceeds the supply of ETH. In this case, if the overall market sentiment turns warmer, it means that ETH also has the opportunity to follow the halving effect of BTC and form an upward momentum.

In addition, ETH plans to launch EIP-1559 in the future. The so-called EIP-1559 is to change the pricing mechanism of Ethereum network transactions from the original auction mechanism to the charging mechanism of basic fee + tip. The original auction mechanism is that users bid, miners choose transactions with high bids, and package them into blocks first. This mechanism leads to low bidding efficiency, it is difficult to predict how much the bid is appropriate, and it is easy to cause delays, selfish mining and other problems.

Regardless of whether it can enter deflation, the destruction of ETH can reduce its circulation. If this happens, miners will pay more attention to the block rewards of ETH; and holders will no longer regard ETH as a tool for value circulation, but will gradually regard it as a token for value storage. In this case, ETH has two values: one is value circulation; the other is value storage. Because ETH itself is not only based on consensus, but also based on income, which allows ETH to capture a truly solid fundamental value.

image description

text

secondary title

text

text

text

text

text

In addition, there is another characteristic of generating income through ETH pledge, that is, it does not have counterparty risk, and its risk is the inherent risk of the protocol system. If BTC is tokenized and borrowed on Ethereum DeFi, although it can also generate income, it has counterparty risks. The income generated in this way is still exogenous.