I have some big ethereum 2.0 news which could bring about an end to ethereum as you know it. the end of proof of work mining for the ethereum network could be happening in 2021 there is a major update to the network being discussed by developers right now. which could change everything for eth.
Now let's get into this topic the ethereum supply crisis is continuing to intensify exchange balances for ethereum continuing to decline at a rapid rate.
you can see on this chart here that the general trend has been for the supply of ethereum on exchanges for the market in the last year just to be going down. To be fair there is a lot of ethereum still sitting on exchanges with a little less than 20 million ethereum on exchanges at the time of WRITING THIS ARTICLE but the trend has been a very steady one. people are gobbling up ethereum in fact this trend of ethereum exiting exchanges going to cold wallet and d5 and all this stuff has actually gained momentum ever since ethereum crossed over the one thousand dollar price level.
A huge amount of buyers came in and have been buying more than three million ethereum since the start of the year that's incredible. This chart in particular i find interesting as it shows the correlation between a supply squeeze on exchanges in previous all-time highs for ethereum. this really i guess should be unsurprising since of course the less available supply that there is on exchanges the higher the price is likely to go. Assuming of course that demand continues to stay relatively steady or to rise and of course demand is rising so the more ethereum we see getting taken off of exchanges and then locked into decentralized finance protocols, locked into the east 2.0 staking contract or just dumped into cold wallets . the more likely it is that the price will continue to move higher over the coming year.
We have also just hit a massive milestone for decentralized finance with d5 for the first time topping over 100 billion dollars in total value locked. Now these statistics come from defy lama a site which actually tracks all d5 protocols on all chains. currently ethereum accounts for around 80 percent of all the value across all the chains locked in decentralized finance. Although BINANCE smart chain has actually managed to attract around 15 percent of the total value locked which is incredible that happened really fast.
All the other chains combined account for just five percent showing that the likes of for example tara luna and they're very cool and profitable mere protocol and anchor protocol. the wider market hasn't really woken up yet to these cool products and the money hasn't flown there and the significant values we've seen it flowing to binance smart chain and of course that ethereum already has that 100 billion mark though that's massive and yet i feel like it's also so small considering the potential of what defI actually has to offer perhaps the learning curves the risks associated with defies ,smart contracts and all that jazz it's keeping a lot of users out right now but i think that the company that can make d5 so easy that your grandma can use it they're gonna make a killing.
But if you're here now and you understand how to use d5 you have a significant advantage on the market i also find it very interesting how quickly binance smart chain was able to capture 15% market share that's incredible it shows that users are not wedded to ethereum they're actively exploring their options and of course Binance smart chain right now is offering some of the best options for users
Finally, for today big ethereum 2.0 1.0 news for you, the news is that proof of stake may be shipping out for ethereum sooner than expected with proof of work mining potentially ending this year that's big that's really big. Developers have recently signaled their intentions to fast-track the merger of ethereum 2.0 and ethereum 1.0 meaning that we could see ethereum become a complete proof-of-stake blockchain by the end of this year that's very exciting. essentially meaning that mining could end no more proof of work for ethereum in 2021. that would be a dramatic shift for ethereum basically meaning the end of ethereum as we know it as we have known it our proof of work ethereum will be no more the start of a new era a better era for ethereum is coming.
This would move up phase 1.5 of ethereum 2.0 which was originally scheduled for 2022 by about a year so that's pretty cool would also mean that the transitioning ethereum 1.0 to proof of stake would happen before we get network sharding. also to note is that this will not be a full merger or transition to ethereum 2.0 it will be basically just ethereum 1.0 but running on proof of stake. there's still a lot of work to be done on ethereum 2.0 this just be a merger of the chains stakers and ethereum 2.0 will continue to reap rewards for securing the network but they will still be unable to transfer or redeem rewards until the entire ethereum 2.0 upgrade is complete or at least that's what developers are saying right now so it's definitely big news definitely something to get excited about but you have to understand too it's just another step on the road to ethereum 2.0 .
this is ethereum 1.0 on proof of stake which will be awesome but you know we're not looking at network sharding yet that's a massive improvement that we need to see this is a major scaling solution that ethereum must-have moving forward nor are we going to see web assembly integrated that's really important as well for applications but it will be big for the network to transition to proof of stake from proof of work since of course proof of work is a bad solution for smart contract platforms. developers have said have said that a minimum viable product will be ready by the end of the year for this transition so that'll be interesting to see but they said also that it's not going to come until after the London hard fork in July which will bring in eip1559 and fee burning to ethereum if ethereum developers managed to pull off a full transition to proof of stake in 2021 then it would be a major development victory for ethereum but as with all things, ethereum be ready for delays they happen frequently in the ethereum development ecosystem.
Anyway, your question for today do you think that developers will actually manage to push out these updates in 2021 or do you expect that it will be delayed like so many things in ethereum let me know down below in the comments sectiON.
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