Ethereum and the US Presidential election are dominating the news today as the deployment of the ETH 2.0 deposit contract opens the doors to staking after months of testing.
After three months of testing on Medalla and various other testnets, the first stage of Phase 0 has been officially initiated with the deployment of the ETH 2.0 deposit contract on Nov 4. This means that ETH holders can now stake 32 ETH to become a validator on the new blockchain.
In order to ignite the genesis for the Beacon Chain ETH 2.0 blockchain, there needs to be 16,384 validators on the chain, which equates to 524,288 ETH locked. This amount is worth approximately $210 million at today’s prices.
This equals approximately 0.46% of the entire supply and is likely to be made up predominantly of whale accounts that already appear to be piling in;
The target date for the Beacon Chain genesis milestone is expected to occur on Dec 1.
According to the Ethereum 2.0 Launchpad, over 14,000 ETH has already been staked within the first 12 hours.
To Stake or Not to Stake
Diehard Ethereum proponents have no doubt made up a large portion of the initial stakes, however, it has sparked a debate within the community as to whether or not it is economically viable to lock up that amount of ETH for such a long time.
ETH staked on Beacon Chain needs to be locked up for a very long period, leading some to question whether the returns would justify it. The Ethereum 2.0 Launchpad explains that the funds need to be locked up because “validators will have to wait until phase 2 (around two years) to be able to withdraw to a specific shard.”
Additionally, the returns diminish very quickly as the amount of ETH staked on the network increases over time. Initially, returns can be as much as 20% which is what the early stakers will get, but this will rapidly decline to less than 5% once 10 million ETH has been staked.
Ethereum aficionados are unruffled and see this as one of the greatest economic opportunities of modern times:
ETH Price Update
Markets reacted to the news as expected with Ethereum seeing a 4% pump since yesterday’s open, bringing prices to the $405 mark. It’s likely that any major momentum won’t be seen until the actual Phase 0 lift off early next month.
Either way, Ethereum today is performing much better than the phalanxes of ‘toothless killers’ that have tried so hard to usurp it.
