It has been almost five months since the genesis block of the Beacon Chain, the first step of what will be Ethereum 2.0, was mined. The project to migrate the consensus type from Proof of Work (PoW) to Proof of Stake (PoS) is gaining more and more momentum among smart contract network enthusiasts.
The push has been such that more than 4.12 million ethers (ETH) are currently blocked or staking, which represents about 11.4 billion dollars. The figure is striking if one takes into account that, on December 1, the activation date of the Beacon Chain, the amount of cryptocurrencies committed was 878,000.
In total, there are already 125,635 validator nodes that are giving life to phase 0 of the “Serenity” project, as this stage of migration to Ethereum 2.0 is also known. According to figures from the Ethereum launchpad, the validators that join at this point, committing 32 ETH, will get an equivalent annual rate of 7.7%.
It must be remembered that for the activation of the Beacon Chain, at least 524,288 ethers were necessary, a figure that was reached in weeks, as reported by CriptoNoticias. Those who blocked funds in this phase of the call would obtain an annual return of 21.6%.
The increase in the number of validating nodes and committed funds is occurring just as ETH, the network’s native cryptocurrency, is reaching new historical peaks in its price. According to CoinGecko records, this Thursday, April 29, each crypto asset was traded on exchanges at $ 2,797 per unit.
Another fact that draws attention is that by exceeding 4.12 million blocked ethers, the validator nodes keep 3.5% of the total supply of ETH safe. According to CoinMarketCap metrics, the total circulation of ethers is 115 million units.
Validating on Ethereum is not the same as mining
For years, Ethereum enthusiasts and developers have paved the way for changing the consensus mechanism on the web, a task that will take time. Going from a PoW algorithm to another PoS is a task that requires new proposals to integrate the current network with the nascent Beacon Chain.
The work is greater if it is taken into account that the PoW system is based on computing power (miners) and electrical energy. The PoS scheme, for its part, is based on capital and software. That is, those who provide the required funds are those who will have access as guarantors of the network.
“Validating on Ethereum is not the same as mining. The results are similar: the work you do will extend and secure the chain. But the process is completely different because they use different consensus mechanisms, ”the programmers explained on the launchpad.
One point to take into account is that operators who commit funds by staking Ethereum 2.0 will have the funds blocked, and with the accumulated incentives, until phase 1.5 is reached, something that could happen at some point in 2022.