Just hours before the deadline, Ethereum (ETH) whales alongside smaller stakers have managed to send all the required ether to the ETH 2.0 deposit contract, allowing to launch Phase 0 on December 1 and extending the ETH rally. (Updated at 05:31 UTC: the last paragraph has been added).
At the time of writing (04:50 UTC), there are ETH 574,880 (USD 356m) sent to the contract, or almost 10% more than initially was required to start the phase that will bring the Beacon Chain.
ETH price extended its gains too, and is now trading at USD 620. It’s up by 7% in a day and 33% in a week.
— Thinking Crypto (@ThinkingCrypto1)
The deposit contract is one of the final steps towards the Phase 0 rollout, as it will enable ETH transactions between the original Ethereum and its second iteration. Phase 0, aka the beacon chain, is considered to be “the central control tower keeping track of the 32 shards on Ethereum 2.0.”
This phase brings with it the long-awaited proof-of-stake (PoS) consensus mechanism, and will enable users to earn rewards through staking ETH on the network and by acting as an active or passive validator. To earn these rewards, validators will have to lock up their ETH in the deposit contract. The minimum that can be staked is ETH 32.
However, the final switch from the current proof-of-work consensus mechanism, which involves mining and is also used by Bitcoin (BTC), to (PoS), is not expected in at least a year, as Ethereum co-founder Vitalik Buterin said last week.
“Ethereum needs to scale to become a global substrate of the clearing and settlement layer,” Andrew Keys, a managing member in Darma Capital and one of the first employees of the Ethereum application incubator ConsenSys, told Bloomberg. According to him, the current version of Ethereum proved that gold, currencies, music and other real-world items could successfully be digitized, but “now, it needs to be able to serve global volume.”
Learn more: Should I Stake or Should I Trade? Ethereum Phase 0 Face Tough Dilemma