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2 million ETH ($1,2B) is now staked in Eth2.0 contract

Photo of: Nathan VDH
by Nathan VDH

Despite a difficult start, the Ethereum2.0 contract is full of Ether. The Ethereum 2.0 staking contract hosts more than 2 million ETH at the time of writing.

Ethereum 2.0 should eventually allow the blockchain applications to forget the bottleneck problem, synonymous with excessive trading costs (gas fees). However, the new network is not there yet.

Since the beginning of December, Ethereum 2.0 has entered a first phase, and even more precisely a phase 0. However, all was not won at that time, despite the predominant place of this blockchain in the ecosystem.

Now, ETH 2.0 seems to be on the right track. In its new version, Ethereum is based on a proof of stake consensus. In this model, users have the possibility to place Ether in escrow.

This is called staking. In return, they receive returns. Ethereum 2.0’s staking contract now represents more than 2 million tokens. This is equivalent to more than a billion dollars, at the current rate ($620).

It should be remembered that the second generation blockchain almost did not reach the 524,288 Ether threshold on the deposit contract. Otherwise, the Genesis block could not have been generated and a first delay would have occurred.

These doubts are now a thing of the past. With more than 2 million ETH, the starting threshold explodes by literally 380%, recalls Dune Analytics. However, 45,000 transactions would have been necessary to reach this figure.

Why this interest? On the one hand to allow the progress of the Ethereum 2.0 project. The blockchain is today an essential link in the field of decentralized finance. It even represents 96% of the transaction volume.

With version 2.0, Ethereum applications expect more scalability, i.e. a capacity to process more transactions. Version 1 does not benefit from such an asset. Consequence: during a peak of activity, a transaction on Ethereum cost an average of 14 dollars in September.

Investing in ETH 2.0 by feeding its staking contract is therefore to eventually participate in an improvement of the network. But it is also, in a crypto world, an opportunity to generate returns.

By blocking their ethers via staking, the stakers will receive rewards in the form of ETH. Indeed, in the Proof of Stake, the stakers (or bakers for Tezos) validate the blocks, like the miners in the Proof of Work.

But the release of Ethereum 2.0 with all its features is not for tomorrow however, not even 2021. The process should take several years. The blockchain congestion will remain, at least for the next two years even though sharding could help drastically.