By
Chimamanda U. Martha
April 25th, 2024
Despite the total deposits accrued thus far, the 52,801 ETH represents just about 10% of the total amount needed, and the full required deposits are needed to trigger the Beacon Chain.
The deposit contract of Ethereum 2.0 which was activated less than a week ago has raked in about 52,801 ETH in deposits. According to a Coindesk estimate, the total deposit made thus far in a bid to activate the Ethereum 2.0 is currently valued at about $23.8 million.
One of the most important focus of the Ethereum Foundation is the migration from the current Proof of Work (PoW) consensus mechanism the Ethereum Network currently runs on to the Proof of Stake (PoS) mechanism. While it has generally been pointed out that the PoW is not sustainable as it consumes power in the process of mining.
The lack of scalability of the PoW has also placed a lot of pressure on the network, amidst the surge in Decentralized Applications being built on the network.
The Ethereum developers have put in a lot of work into the development of Ethereum 2.0 with various Testnets launched in a bid to perfect the smooth transition of the network.
One of the recent moves was the launch of the Deposits Contract for the new network, with the conditions for the Beacon Chain of Ethereum 2.0 to be activated depending on a deposit of at least 524,288 ETH, to be owned by a total of 16,384 stakers or validators.
As a sign of goodwill and faith in the new system being developed, Vitalik Buterin, Ethereum Co-Founder, sent a total of 3,200 ETH to the deposit contract to secure 100 validators.
Despite the total deposits accrued thus far, the 52,801 ETH represents just about 10% of the total amount needed, and the full required deposits are needed to trigger the Beacon Chain. As gathered, the Genesis which is projected to go live by December will eventually take place a week whenever the total deposits are realized.
Ethereum 2.0 Deposit Contract Comes With Incentives
It is worthy of note that the request for validators which can be achieved with the deposits of at least 32 Ethereum by a single individual or validator comes with its own incentives. The staked ETH coins will earn the investors a staking reward which is pegged somewhere around 8-15% per annum once the Ethereum 2.0 migration fully goes live.
While this incentive has been largely tagged as risky, it serves the purpose of enticing participants, as learned from the failure of the Spadina Testnet which saw low participation due to lack of incentives.
The race to launch the Beacon Chain which is described as the heart of the proposed Ethereum 2.0 is significant. This is so as it is needed for the other three phases of Ethereum 2.0 to be launched. These other expected rollouts of the proposed Proof of Stake network include; Shard, eWASM, and Cross-link, the deployment of which will signal the full running of the Ethereum 2.0 PoS network.