On December 1, Ethereum 2.0 officially started the first phase and the community is pleased with the final progress. It will take a while for ETH 2.0 to be completely launched, as the first phase will be followed by two more.
One of the most important changes to ETH 1.0 is a change to proof-of-stake — a proof-of-work consensus has been used so far. This means that with the launch of BeaconChain (phase 0) you can stake ETH in order to influence the network and receive rewards. A total of 900,000 ETH were collected.
Withdrawal contracts for ETH funds could be available in the first quarter of 2021. However, they have only started the distribution of rewards, thus, ETH can’t be fully paid out until the beginning of 2022.
What Is Rocket Pool All About?
Rocket Pool is an Australia-based staking platform that enables retail Ethereum investors with less than 32 ETH to participate in new Ethereum staking. 32 ETH is a regular minimum amount. The ETH 2.0 staking can enable Rocket Pool only when payout functions are available.
Other staking providers take a different approach. For example, LiquidStake allows conversion of a USDC loan into ETH in a staking contract so that they are more liquid. Coinbase, in turn, will simply allow trading between ETH and ETH 2.0 to solve the liquidity problem.
What Actually Is Ethereum 2.0?
Ethereum 2.0 is an upgrade for Ethereum, probably the best known and most widely used blockchain platform. The original version uses a PoW consensus, but ETH 2.0 provides a switch to PoS. This should make Ethereum more energy-saving and efficient. Thus, miners will then no longer be needed. The entities that also stake ETH 2.0 have an influence on the network.
In addition to the changed consensus, the developers are also about to introduce sharding. With this technology, more transactions can be processed on the Ethereum blockchain than before. This upgrade is necessary for Ethereum in order to remain competitive in the long term. This year we often witnessed how the Ethereum blockchain was ‘brought to its knees’ in a very short time by a large number of transactions.
The proposal for withdrawal contracts should meet with the approval of the Ethereum community — it’s another big step forward! What do you guys think about the ETH 2.0 upgrade? Feel free to share your opinion in the comments. Have a great weekend!