Ethereum Staking Taking Off With Over 1 Million ETH Primed For 2.0
Ethereum prices may not be very positive at the moment but fundamentals are improving as the network gears up for proof of stake. Testnets indicate that up to a million ETH could be already staked in anticipation of Beacon Chain.
Ethereum has fallen back below $160 today as crypto markets continue their correction. Chinese New Year has been partially blamed for the selloff and the exit of over $10 billion from crypto markets this week.
In the short term none of this really matters for Ethereum which is still showing solid fundamentals and development progress.
How Would You Like Your Stake?
As reported yesterday by Bitcoinist, one of Ethereum’s most important smart contracts was successfully verified enabling deposits to be made in preparation of the migration to proof of stake.
It has been estimated that around a million ETH has already been staked by testnet clients. This equates to around $160 million at today’s prices.
The figure is based on the amount currently utilizing the single client ETH 2.0 testnet. Around 100,000 testnet ETH is currently being staked by 32,000 validators. The testnet is currently running on mainnet parameters but using a tenth of the 32 ETH required to run a full node.
From these initial tests it has been further projected that a million ETH could jump straight on to the Beacon Chain when it goes live later this year. More ETH is expected to be added with the Ethereum Foundation itself planning to stake. The report claims that the Foundation has around 600,000 ETH.
Major exchanges such as Coinbase are also likely to offer staking services or pools as they do with other PoS cryptocurrencies. This would encourage more Ethereum holders to buy and stake their tokens.
Rewards will vary depending on how much is staked, it is currently estimated at around 3.5% which still beats the majority of high street banks.
Trustnodes surmised that within a year there could be 30 million staked ETH, requiring a million validators in an astonishingly complex network.
Ethereum and DeFi
Those comfortable with day trading are likely to continue on that path rather than lock up their ETH for 180 days to gain lower returns.
What the platform will do though is provide more ways to earn. DeFi is already gaining a lot of traction and 6% is easily achievable by locking up ETH and converting it into DAI to get the DSR.
Additionally DAI is dollar pegged which makes it a far more stable investment if entering directly from fiat.
Ethereum 2.0 will make a big impact this year and it is only the beginning. The future of the project is bright and current prices are not reflective of that just yet.
Will ETH staking be good for market prices? Add your thoughts below.
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