A total of 852,288 ETH have been deposited into the Ethereum 2.0 deposit contract to trigger the activation of the most ambitious upgrade of the second-largest cryptocurrency by market cap. The upgrade is expected to improve its economic model, resource usage, and governance.
According to data from the Ethereum blockchain, the total amount of ether deposited into the smart contract is now over little over $488 million, at a rate of $573 per ether token. Over $400,000 worth of ERC-20 tokens have also been deposited into the address.
The Ethereum 2.0 deposit contract was released in early November and is now quite above the 524,288 ETH threshold necessary to ensure the launch of Ethereum 2.0 on December 1. It’s worth noting the Ethereum 2.0 network itself isn’t launching just yet.
Instead, a parallel proof-of-stake blockchain dubbed the “beacon chain” is going to launch, and will run alongside the existing Ethereum network. Its initial development will not impact Ethereum or its smart contracts and application, and will instead contribute to the launch of Ethereum 2.0. The activation of the beacon chain is the first of four phases on the migration to the upgraded network.
The primary stakeholders on the Ethereum 2.0 chain will be validators, which are essentially the equivalent to the miners on ETH’s current proof-of-stake network. Validators, just like miners, will earn rewards for processing transactions and finding new blocks.
To become an Ethereum 2.0 validator, a user has to stake at least 32 ETH into the network’s deposit contracts. At launch, validators are expected to earn an annualized reward of 20% on their staked funds, which could be attracting investment.
To analysts, however, the increasing amount being deposited shows confidence on the launch of Ethereum 2.0 from users. To Weiss Crypto Ratings, the growing number of deposits shows “everyone wants to get on board.”
Cryptocurrency exchanges and mining pools are expected to help users stake their ether, even if they are below the threshold amount of 32 ETH. Until those services launch, users are still learning rewards on their funds through decentralized finance (DeFi) or savings programs.
Both DeFi and savings programs are accessible from most top cryptoassets exchanges. OKEx, for example, has integrated into its platform top DeFi protocols like Compound and Curve. Apart from these integrations, the firm also has an Earn program that lets users earn interest on their cryptoassets.
Depending on which cryptoassets users want to earn interest from, they can either earn on flexible deposits, or by locking in their funds for a period of time that will give the user a higher rate of return. The biggest advantage these have is that they are all within OKEx’s platform, so no transaction or smart contract fees have to be paid. These often cut away investors’ profits.
Featured image via Pixabay.
