The total value of Ethereum (ETH) locked in a deposit contract on Ethereum 2.0 already exceeds 4 million, worth more than $ 11 billion at current prices, according to the CryptoQuant platform.
Ethereum 2.0 is an ambitious upgrade plan that aims to change the Ethereum blockchain from its current proof of work consensus (PoW) algorithm to a proof of participation (PoS) algorithm. This will significantly reduce network power consumption and hardware requirements, potentially resulting in lower transaction rates (which are currently skyrocketing) and higher throughput.
Currently, ETH 2.0 is in the first stage of implementation, called “Phase 0”. To launch it initially in late 2020, the network required more than 16,000 validators – users running the software – and 500,000 ETH deposited. Initially, community members seemed reluctant to lock their coins; the minimum limit was exceeded almost at the last moment before the deadline.
Since then, however, ETH inflows to the Ethereum 2.0 deposit agreement have increased considerably. On December 4 of last year, users had closed a total of one million ETH in the 2.0 contract – double the amount needed to launch the beacon chain. That number doubled again just 20 days later, reaching two million ETH on December 24th.
The current price rally has given a significant boost to ETH's dollar stake value. In December, Ethereum was trading at around $ 600 per token, but has risen to more than $ 2,700 since then.
The recent influx of ETH in Ethereum 2.0 can be partially explained by a recent announcement by Coinbase. On April 16, the platform started removing customers from the waiting list for staking 2.0. In exchange for blocking part of their ETH, Coinbase users can now earn up to 6% in annual interest.