Research company Glassnode reports on March 28 that no less than 3.6 million ether (ETH) is now tied up in the Ethereum 2.0 deposit contract:
That means that at current prices, $ 6.4 billion in ETH is already locked into ETH 2.0. The first phase of the highly anticipated Ethereum 2.0 launched on December 1. With this new blockchain, Ethereum wants to switch from a proof-of-work (PoW) to a proof-of-stake (PoS) protocol.
This introduces, among other things, staking on Ethereum, the locking of ETH in exchange for return and control, also known as validators. To succeed in the launch of Beacon chain, at least 524,888 ETH had to be secured by December 1st. To become a validator you must lock up at least 32 ETH.
So now almost 600% more ETH is in the contract than is necessary to run the new network. When at the beginning of January only half of this value was in the ETH 2.0, founder Vitalik Buterin already called it “the ultimate gamble.”
Ultimately, Ethereum 1.0 and 2.0 will merge into one network that will complete the transition to PoS. This is expected to solve Ethereum’s enormously high transaction costs, but it may take several years to complete.
The plan is to introduce sharding, a way of splitting the blockchain into different chains, this year, as a solution to this congestion problem. In the meantime, perhaps Layer-2 solutions such as ZK-Rollups and Optimism can solve the problem.
However, Optimism’s launch was recently delayed to summer. In addition, Ethereum Improvement Proposal 1559, or EIP-1559, could also help, but Coin Shares recently claimed that this update “probably won’t” solve the problem.
Visa announced today that the company will offer the ability to settle fiat currency transactions on Ethereum with USD Coin (USDC). Analyst John van Meer looked at the Ether price in his analysis this morning.