Tag: Beacon Chain

Ethereum Beacon Chain Sees Over $2 Billion Worth of ETH Withdrawn in Four Days

by Blockchain News

Ethereum’s Beacon Chain has been making headlines as over 1 million ETH worth $2.1 billion has been withdrawn from it in the first four days of the Shapella hard fork. This has resulted in Ether’s price rising above $2,100 for the first time in 11 months. According to data from beaconcha.in, the withdrawals have come from 473,7000 withdrawal requests, with Saturday, April 15, marking the largest withdrawal day at 392,800 ETH.

As of now, nearly 87% or 469,000 out of 540,000 active validators are able to withdraw their staked Ether. The Shapella hard fork has been a topic of debate within the Ethereum community as many were uncertain about its impact on ETH’s price. However, the first four days have produced close to a 10% rise, indicating that the hard fork has been beneficial for Ether’s price.

According to experts, much of the stake that has been withdrawn over the last few days is actually going straight back into the Beacon Chain as validators are looking to compound their interest. So much so that net stake is currently increasing. This means that the withdrawn stake is being reinvested in the Beacon Chain to earn interest on it, rather than being sold off in the market.

The current macroeconomic climate has also played a role in the withdrawals. Many early stakers wanted to liquidate their stake after waiting nearly 30 months for some. The withdrawals have allowed them to finally reap the benefits of their investments. The reinvestment of the withdrawn stake in the Beacon Chain also indicates that investors are confident in the platform’s future and are looking to earn long-term returns.

The Beacon Chain is an important component of Ethereum’s transition to a Proof of Stake (PoS) consensus algorithm. It is currently running parallel to the existing Proof of Work (PoW) chain and will eventually replace it. The PoS algorithm is expected to reduce the energy consumption required for mining and increase the efficiency of the network. With the success of the Beacon Chain withdrawals, the transition to PoS is looking more promising than ever before.

In conclusion, the Beacon Chain’s recent success with over $2 billion worth of ETH withdrawn in just four days is a positive sign for Ethereum’s future. The reinvestment of the withdrawn stake in the platform is a strong indication of investor confidence in the long-term potential of the network. The transition to a PoS consensus algorithm is also looking more promising than ever before, and with the current macroeconomic climate, the future looks bright for Ethereum.

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Ethereum 2.0: Upcoming Upgrade Will Not Eradicate High Gas Fees

by Blockchain News

The growing anticipation of the Merge of the Ethereum network’s Beacon Chain with the current Proof-of-Work (PoW) mainnet to usher in the Proof-of-Stake (PoS) version of the protocol has generated a number of misconceptions from the public.

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The Ethereum Foundation (EF) has come out to debunk some of these misconceptions, one of which is relative to the issue of gas fees.

The EF said the emergence of Ethereum 2.0 will not be a panacea for lower gas fees as the upgrade is a change of consensus mechanism, not an expansion of network capacity, and will not result in lower gas fees. 

“Gas fees are a product of network demand relative to the network’s capacity. The Merge deprecates the use of proof-of-work, transitioning to proof-of-stake for consensus, but does not significantly change any parameters that directly influence network capacity or throughput,” the EF said.

The foundation said future rollup technology upgrades are projected to help taper down the high gas fees. Ethereum’s co-founder, Vitalik Buterin, has also supported the push of Layer-2 rollups in pushing down the higher gas fees to accepted levels.

Besides the clamour on gas fees, the misconception about the Merge ushering in faster transactions was also corrected. According to the Ethereum Foundation, while there is a slight change in the transaction speed on the Beacon Chain and the PoW network, the chances that the speed of transactions on the Layer-1 protocol will largely remain the same.

The Beacon Chain went live back in December 2020 and has been running parallel with the Ethereum mainnet since then. A lot of debugging has been done since the development of Ethereum 2.0 was made public. With so much work now being put into The Merge, the anticipation for the proposed launch is now being directed to September 15 – 19 – the tentative date.

Image source: Shutterstock

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Ethereum 2.0 Deposit Contract Hits ATH as Investments Heightens

by Blockchain News

More investments continue trickling into Ethereum 2.0 deposit contract, given that the number of staked ETH is scaling the heights.

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Market insight provider Glassnode explained:

”Total value in the ETH 2.0 deposit contract just reached an ATH of 12,777,045 ETH.”

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Source: Glassnode

 

Ethereum 2.0, or the Beacon Chain, which was recently renamed the consensus layer, was launched in December 2020 and was regarded as a game-changer that sought to transit the current Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) framework.

 

The transition from a POW to a PoS consensus mechanism called the merge is speculated to be the biggest software upgrade in the Ethereum ecosystem and the proof-of-stake algorithm will allow the confirmation of blocks in a more energy-efficient way. 

 

Therefore, validators will stake Ether instead of solving a cryptographic puzzle. 

 

The number of validators is also edging closer to the 400k mark. Glassnode acknowledged:

“Over 12.764M ETH has been staked by 398k unique validators. This is 10.73% of the circulating supply. Since 1-May, 19.8k additional validators have come online and staked.”

Ethereum researcher Justin Drake recently disclosed that the merge was expected in August because testing was in the final stages. 

 

The merge is usually regarded as a game-changer that will give the Ethereum network a new face because it is expected to enhance scalability through upgrades like sharding.

 

Furthermore, it is anticipated to strengthen Ethereum’s quest as a deflationary asset because the second-largest cryptocurrency’s value is speculated to increase based on slashed supply. 

 

Meanwhile, Arthur Hayes, the ex-CEO of crypto exchange BitMEX, commented that Ethereum is on its way to $10,000 by the end of the year because the merge will be the tipping point, putting the second-largest currency ahead of the game.

 

Hayes pointed out that the proof-of-stake consensus mechanism will make Ethereum a “currency bond” or commodity-based compared to Bitcoin. 

Image source: Shutterstock

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Eth2 is no more after Ethereum Foundation ditches name in rebrand

by Cointelegraph

The Ethereum Foundation has removed all references to Eth1 and Eth2 in favor of calling the original blockchain the “execution layer” and the upgraded Proof of Stake chain the “consensus layer.”

Ethereum’s long-awaited transition from a Proof-of-work mining model to a Proof-of-Stake (PoS) consensus mechanism is expected to go live around in the second or third quarter of this year.

Announcing the change the foundation cited a number of rationales including a “broken mental model for new users,” scam prevention, inclusivity and staking clarity.

In a Jan.24 blog post, the Ethereum Foundation noted that the branding of Eth2 failed to concisely capture what was happening to the network via its series of upgrades:

“One major problem with the Eth2 branding is that it creates a broken mental model for new users of Ethereum. They intuitively think that Eth1 comes first and Eth2 comes after. Or that Eth1 ceases to exist once Eth2 exists.”

“Neither of these is true. By removing Eth2 terminology, we save all future users from navigating this confusing mental model,” the blog post added.

Under the new terminology, the combination of the execution layer (Eth1) and the consensus layer (Eth2) will be labeled as Ethereum, while individual features such as the beacon chain, merge and shared chains are now referred to as “upgrades.”

Eth2 rebrand: The Ethereum Foundation

The foundation also stated that its re-branding of Eth2 would help “bring clarity to eliminate” scams in which malicious actors dupe victims — unaware that their Ether (ETH) will automatically switch to Eth2 following the merge — into swapping Ether (ETH) for fake ETH2 tokens.

“Unfortunately, malicious actors have attempted to use the Eth2 misnomer to scam users by telling them to swap their ETH for ‘ETH2’ tokens or that they must somehow migrate their ETH before the Eth2 upgrade,” the post read.

The news saw a relatively apathetic response in the r/Ethereum subreddit, with most users joking about the change, or complaining about the length of time the merge was taking.

“Don’t care what you call it, just fucking ship it soon plsss” said Redditor ghfsgiwaa.

User Kristkind stated that the attempted rebrand has come “too late”, noting that the term Eth2 has already been widely adopted by the media and users:

“Everybody in the media, even the crypto-related one, runs with the term 2.0 or simply Eth2. And honestly, I think it is better that way, because [it’s] way easier to get for the (semi-)layperson, than ‘consensus layer’, which needs you to understand the architecture of the network.”

Relat Ethereum white paper predicted DeFi but missed NFTs: Vitalik Buterin

Following the merge and transition to PoS scheduled for later this year — for real this time — the remaining milestone of Ethereum’s current roadmap is the shard chains upgrade that is set to into effect in late 2022/early 2023.

The introduction of shard chains will see Ethereum’s network load spread across 64 new chains in order to enhance its scalability and capacity.

Despite 2022 gearing up to be a bullish year for Ethereum fundamentally, the price of Ether has taken a hefty hit amid the current downturn across stock and crypto markets, dropping 40% over the past 30 days to sit at around $2,437 at the time of writing.