In previous articles we explored the hurdles that the Ethereum network faces the original smart contract environment. The explosive expansion of defi initiatives surpassed the networks capabilities and resulted in unsustainable strain being placed on all elements of the network. As a result transaction fees (gas prices) for conducting business on Ethereum’s network became cost-prohibitive for many small value transactions.
Tier 2 network solutions have popped up all over the crypto space looking to resolve this issue. But tier 2 implies that there is a secondary network where transactions are handled parallel to the main blockchain. This structure makes these transactions less secure than those in the blockchain.
A more comprehensive solution was clearly needed, and that is why Ethereum embarked on a mayor revamping of its whole network.
The project called ETH2.0 amounts to a relaunching of the whole Ethereum system. Huge changes are being implemented in order to tackle all of Ethereum’s handicaps.
We have gone into ETH2.0 before, but what is new now is that phase 1 is finally upon us.
Ethereum 2.0 v1.0 has been released. On December 1, 2020 the Eth mainnet will start operating. There are some conditions that must be met. Mainly there must be enough ETH in validator deposits before the startup date for the genesis to trigger.
Will the required conditions be met before the due date for Eth2.0 release? It really doesn’t matter. In general terms it may not be December 1, that is not the case, the point is that Eth2.0 is a reality now. With Eth2.0 Ethereum becomes once more an unequaled vehicle for smart contracts. And the crypto market has shown great interest in this development, pushing Ethereum prices over the USD400 mark (USD 415 currently).
With Eth2.0 underway, the backing for other scaling solutions may falter. Let’s hope that is not the case, as a healthy defi development requires multiple scaling solutions to be applied.
