Once proof-of-stake is implemented later this year, ETH 2.0 deposit contract can be unblocked to increase Ethereum processing speed.
On Friday, the deposit contract for staking Ethereum (ETH) on the Beacon chain had a balance of 12 million ETH. The total value of Ether locked in the Eth2 contract is approximately $34.5 billion.
The deposit contract was launched in November 2020 and now accounts for approximately 10% of the total circulating supply of ETH.
The Beacon Chain represents the first significant step in Ethereum’s transition from a proof-of-work (PoW) consensus model to a proof-of-stake (PoS) consensus model. To become an ETH 2.0 validator, a trader must invest a minimum of 32 ETH. Thus, despite several delays over the past year, the largest Beacon Chain contract, valued at $34.5 billion, demonstrates the enormous demand and trust in the future ETH 2.0.
ETH developers began community testing of the PoS network in December, but the tentative merger date of June 2022 was postponed again, with no specific date offered.
Since its inception, Ethereum’s biggest upgrade has faced numerous challenges and constant delays. Despite this, the deposit contract has grown significantly in the last two months, with over 2 million ETH deposited.
The transition of Ethereum to PoS has elicited mixed reactions in the cryptocurrency market. On the one hand, the energy-conscious community applauded the move, claiming it would reduce the network’s consumption by 90%. On the other hand, Bitcoin proponents such as Jack Dorsey believe PoS mining consensus is more centralized and less secure than PoW mining consensus.
The integration of the Beacon chain into the Ethereum mainnet would complete the ETH 2.0 transition. The upcoming merger is expected to bring the Ethereum network up to speed with centralized payment processors, increasing payment processing speed by several orders of magnitude thanks to sharding (parallel processing).