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Trust in ETH 2.0: Ether worth 33.5 billion dollars is in this staking contract

 


$ 33.5 billion worth of ethers is in lockup. They can only become free in the course of the hard fork on Ethereum 2.0. Someone has patience, right?

Twitter user and crypto enthusiast Tomer Strolight points to a contract that is equipped with over 8.6 million ethers, which corresponds to the equivalent of around 33.5 billion US dollars. The special thing about this contract is that those who put the money into it cannot take it out again for the time being.

Investors commit over $ 33 billion in staking contract

Because the contract is a staking contract on the beacon chain, the so-called consensus layer. No transactions are processed on it yet. The entire live operation takes place on the Ethereum blockchain, the so-called execution layer. The so-called merge is planned for the first half of 2022. Behind this is the merging of the execution and consensus layer as well as the switch from the consensus model from proof-of-work to proof-of-stake.

This merge is necessary in order to be able to liquidate the huge contract later and under conditions to be determined. The contract has been in place since November 2020, which is more than a year. However, there is nothing disreputable about investing in a contract that cannot be terminated. All investors knew what they were doing and under what conditions.

Therefore, the high amount deposited in the staking contract can also be seen as a vote of confidence in the prospects of the next generation of the Ethereum network - it was also at least partially demanded by the network. The staking of Ether allows the staker to act as a validator on the beacon chain, support the upgrade to Ethereum 2.0 and entitle them to so-called staking rewards - a kind of interest.

The Beacon Chain has been using proof-of-stake since October 2021. The new consensus model was introduced with the Altair upgrade. This means that validators instead of miners now confirm the transactions. They were asked to convert their nodes as early as October.

At the beginning of December, the Ethereum developers then called on community members to test the merge. The test phase was divided into three phases. There is one for non-technical users, one for developers with limited experience in the blockchain, and one for experienced blockchain developers.

Merge in the spring, sharding later

Judging by the current development, the merge is more likely to take place in the first rather than the second quarter of the coming year. The mere changeover to proof-of-stake can be recognized as a significant advance but does not yet mean Ethereum 2.0. That will only have happened with the introduction of the so-called shard chains.

This is a concept in which not every transaction involves the entire blockchain, but only individual “shards”, i.e. fractions of the chain. In this way, significantly more transactions can be processed at the same time, which makes the capacity of the Ethereum network almost freely scalable. The introduction of this module is unlikely to be expected before mid-2022.

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