D(eposit)-Day - The Daily Gwei #111
Get your 32 ETH deposits ready.
It finally happened - the Ethereum 2.0 deposit contract went live on the Ethereum 1.0 mainnet which means users who want to stake in eth2 can now begin the process of doing so. Additionally (and probably more importantly), we finally got an eth2 phase 0 mainnet genesis date - December 1st, 2020 at 12pm UTC. Yes, that’s right, eth2 phase 0 will launch in 2020!
Can you believe it? After such a long time in the research and development phases we finally have a launch date for eth2 phase 0 - the critical bedrock of the entire eth2 system. The ‘deposit contract’ that was launched yesterday is also just as critical because it’s how ETH from eth1 will migrate to eth2 in order to participate in staking. The way it works is that each eth2 client will be reading the balances of the deposit contract to assign ETH on the eth2 chain to the correct validators/stakers - all of this is done trustlessly.
Interested stakers can head to the Ethereum.org Launchpad website in order to get their validator accounts ready to stake on December 1st. I do want to stress one thing though - if you do decide to stake, the ETH that you stake with will not be accessible again until eth2 phase 1.5 when eth1 is merged into eth2 (though you will earn rewards for staking that can be claimed after the merger as well). More details about the merger can be found here.
Okay so now that the deposit contract is live, ETH is starting to pour in with ~20,000 ETH deposited at time of writing. For the eth2 phase 0 network (the Beacon Chain) to actually begin producing blocks, a minimum of 16,375 validators will need to be online which means 524,000 ETH or ~$2.1mil (16,375 validators * 32 ETH) will need to be sent to the deposit contract. Some people in the community have expressed skepticism that that minimum will actually be reached for a few different reasons - a major reason being that yield farming is more lucrative than staking (profit wise) and a users ETH is not locked for an undetermined amount of time if they do yield farming. I discussed this in more detail here.
I think there is merit to this skepticism but I remain very confident that the minimum will be reached in time for genesis. You may think that ~20,000 ETH deposited is a low number considering the hype for eth2 but if I had to guess, it comes down to 3 things:
There’s not really any rush to send ETH in right away
The unknown lock-up time will dissuade a lot of people
Bigger players are going to be slow to move
I expect to see a gradual trickling in of ETH over the next few weeks rather than huge chunks of 100,000 ETH going in every day. I’m very curious to see how much the Ethereum Foundation decides to put into staking!
Alright so now that we have a phase 0 mainnet date and what’s looking to be a smooth launch on December 1st, what comes next and more importantly, when is it coming? Well phase 1 (the shard chains) comes next and this phase is optimistically expected to go live in late 2021 and then phase 1.5 (the eth1 <> eth2 merger) will hopefully go live in 2022 which would complete the rollup-centric roadmap outlined by Vitalik here. The final phase, phase 2, is still in active research so it’s difficult to give even an estimated timeline here.
I hope you’re as excited as I am for December 1st - it’s going to be an historic day!
Have a great day everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.