Vitalik Buterin, co-founder of Ethereum, sent 3,200 ETH to invest in Ethereum 2.0. The blockchain network’s next version is expected to start on Dec 1, but only if a minimum volume is deposited.
About 3,200 ETH, worth $1.5 million, were sent by Vitalik Buterin, co-founder of Ethereum, to the newly formed deposit contract of the network in preparation for staking.
Buterin’s “VB2” address sent 100 transactions for 32 ether each, all in totaling 3,200 units of the cryptocurrency, as reported by TrustedNodes. The amount is worth around $1.4 million at press time.
Staking on Eth 2.0
The deposit contract acts as a bridge between the current proof-of-work (PoW) blockchain of Ethereum and its much-anticipated vision of proof-of-stake (PoS) update, dubbed Ethereum 2.0, which is scheduled to be released on December 1.
In order to stake on Ethereum 2.0, a minimum deposit of 32 ETH (currently worth about $14,000) is needed. Buterin’s deposit is considered on the high end. In addition, such a large sum has to be bottled away for a minimum of two years.
That may be why, so far, out of the estimated 524,000 (some $1.3 million) required for the Eth 2.0 Genesis block to begin, only around 39,000 ETH have been deposited. If the 524,000 ETH does not materialize upon the Genesis block, it will postpone the launch of Eth 2.0 by another seven days, and so on, until the funds are fully collected.
Those happy to invest will start earning interest annually on their stake as soon as the beacon chain of the platform launches on or after December 1, as the first step forward for the network.
Staking will begin to overtake mining incentives, which will become the new way to compensate for contributing to the validation of the network.
Eth 2.0 in a Nutshell
Ethereum 2.0 is a long-planned upgrade to the global ETH network that focuses on scalability and performance.
Phase 0 continues to be set for operation in 2020, as the first phase of Eth2. With the rise of the DeFi movement and trading on DEXes, it is imperative that Ethereum is able to scale with growing demand.
The latest update further enhances Ethereum against denial-of-service attacks, enforces the genesis delay, and a temporary quadrupling of penalty fees, according to Edgington.
The last testnet, entitled Medella, is admittedly plagued by low participation. Higher user participation would lead to a more successful launch eventually.
Ethereum 2.0 decreases resource usage, allows the network to accommodate more transactions, and improves security. Ethereum will become a proof of stake blockchain and will add network sharding. This shifts the way Ethereum operates tremendously.
Thanks to the ETH 2.0 bounty program, however, developers are incentivized with $50,000 to help identify critical issues, payable in ETH or DAI.