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Ethereum 2.0 struggles to find its starting capital

Photo of: Nathan VDH
by Nathan VDH

About 2 weeks before the launch, Ethereum 2.0 is far from hosting enough ETH in staking on its deposit contract. Only 10% of the required 524,588 ETHs are available. For the CEO of FTX, Ethereum 2 or not, DeFi has to find other networks to grow.

The launch schedule of Ethereum 2.0 is likely to undergo some changes. Developers could initially hope to move to phase 0 of the network early next month.

However, it is likely that the conditions will not be met. At least 16,384 validators are expected to participate in the form of the 32 ETH staking. ETH 2.0 will only truly launch once a total of 524,288 ETH has been reached, and this 7 days before December 1st.

The deposit contract is today far from reaching a sufficient amount of Ether. According to the ETH 2 Launchpad, only about 10% of the required funds are currently in escrow. There is still a shortfall of 471,295 ETH.

And the trend of the last few days is not encouraging. An analysis of the deposit history of the Ethereum contract shows that the majority of investors joined the blockchain in the very first days.

Altcoins and Bitcoin are now showing strong fluctuations. With an Ether at over $450, crypto holders may be tempted to hold on to their capital rather than invest in ETH 2.0.

Indeed, validators paying a minimum of 32 ETH will not be able to recover their stake before Ethereum’s phase 2. This phase is not expected before about two years. Staking therefore presents a risk. The evolution of cryptocurrencies prices is probably not favourable to the project.

But there could also be another reason. For the CEO and founder of the FTX exchange, Ethereum is simply not up to DeFi’s standards. The network is thus proving unable to support the growth of decentralized finance, says Sam Bankman-Fried.

The figure of the crypto-sphere even considers that the Ethereum blockchain hinders the development of DeFi. The only way to overcome these limitations, he continues, is to rely on other networks.

For his DeFi Serum project, Sam Bankman-Fried explains that he has tested more than 30 different blockchains, including Ethereum. He finally opted for the Solana network, which offered sufficient processing speeds.