The long-anticipated Ethereum 2.0 launch could be closer than expected. The entity behind the project – the Ethereum Foundation (EF) – recently announced that the eth2 validator launchpad is live, and validators can deposit funds into Medalla. Its idea is to assist validators in grasping the aspects of the network upgrade.
ETH 2.0’s Developments Arise
Ethereum’s expected network upgrade dubbed ETH 2.0 will signify the transition from the current proof-of-work consensus algorithm towards proof-of-stake. By making this alternation, Ethereum aims to address several ongoing issues – including scalability and security. Yet, all the hype around the update has been cooled down multiple times after each delay.
One promising breakthrough came last week, as reported. According to a post from Ethereum’s Discord public server, the Foundation will release the eth2 validator launchpad on August 4th. However, the EF has accelerated its developments on the matter and started allowing deposits on the Medalla testnet as of yesterday.
Per the official statement, the idea is to allow validators (network participants) to “keep track of, and make deposits into, the upcoming Medalla multi-client testnet.” In other words, future validators will have the ability to learn all details related to the Ethereum 2.0 upgrade by utilizing the testnet.
The interest appears to be high – as of yesterday, 150,000 ETH were already sent to the Ethereum 2.0 testnet deposit contract. They came from nearly 5,000 depositors expressing their desire to become validators. The network will need a minimum of 16,384 validators (or 524,288 ETH).
It’s worth noting that Medalla is the final ETH 2.0 testnet version.
Potential Challenges and Rewards
Upon officially launching the testnet on August 4th, validators may face several challenges, and certain responsibilities which they should be aware of, the EF outlined. Those who act out of line with the pre-set specifications or those who are offline and don’t actively participate in the consensus can be penalized. Additionally, since this is not a staking pool, “running your own validator comes with the responsibility of managing your own keys.”
Validators on each PoS network can receive continuous payouts for staking and contributing to the security of the blockchain. However, the rewards with Ethereum 2.0 “are not fixed but dynamic.”
“If the total amount of ETH staked is low, the annual reward is high, but as the total stake rises, the reward received by each validator starts to fall,” – reads the announcement.
Lastly, the statement highlighted the (at least) three phases in which ETH 2.0 will be released, each focusing on different aspects. Following the testnet launch on August 4th, the first upcoming stage will be the so-called Phase 0, then comes Phase 1 and Phase 2.
- Phase 0 contains all the machinery behind eth2’s consensus; it tracks the validators and their balances.
- Phase 1 handles adding and storing the data associated with eth2.
- Phase 2 adds execution to eth2, which enables programs to be run on top of it.
While the legacy Ethereum platform will continue to exist for some time on its independent PoW chain, the post noted that the “transition towards PoS starts now.”
ETH’s Price Performance
Typically, a significant announcement such as this one impacts the price of the native cryptocurrency in a way. ETH, which has also been the underlying technology employed in the current DeFi boom, finally decided to act in the middle of July and broke out of its familiar trading range of about $220 to $240 where it was situated for a few weeks.
The asset began its decisive ascend on July 22nd and reached a yearly high yesterday of about $330. This represented a 40% surge in a week. ETH has retraced slightly, and it stands now at $316, but the anticipation of the Ethereum 2.0 launch could indeed push it upwards again.