Ethereum 2.0 went live yesterday at 12pm UTC with its newest chain Beacon Chain, a faster, cheaper and more environmentally friendly system, which will help it reduce operating costs substantially. The launched has been backed by the ETH community with almost 900,000 staked ETH.
Beacon Chain allows Ethereum to enable a sharding system that distributes data to multiple, independent datasets, enabling faster transaction times and greater scalability as it eases the computational and storage workload required to record on-chain information. The new chain also enables staking on the Ethereum network. By staking ETH in smart contracts, users can then activate a validator software that enables them to take part in transaction processing and block creation.
Below are some expert insights from the crypto industry on the news.
Ahmed Al-Balaghi, Co-Founder and CEO at Biconomy, the platform that empowers blockchain developers to provide a simplified onboarding experience for their web3 projects, says:
“Network effects play a huge role not just going from zero to 1 but from 1-100. More projects being built on Ethereum will attract more users, which will in turn lead to more projects. With the imminent launch of ETH 2, it feels Ethereum is on this 1-100 mass adoption trajectory. ETH 2 will be more scalable and cheaper to use. However, we will not get mass adoption as long as new users need to deal with blockchain complexities such as paying gas, even if it is a really small amount. Enabling great UX, better scalability, and simpler interactions with the blockchain are critical to provide value that will create the Unicorn Dapps of tomorrow.”
Dermot O’Riordan, Partner at Eden Block, a research focused EU VC Fund focused on disruptive blockchain technology implementations:
“Holders of ETH have had it much worse than holders of BTC since the sell-off throughout 2018 and 2019 post-2017’s ICO boom. This has hardened Ethereans’ resolve, and the $300m now locked in the ETH2 beacon chain is an awe-inspiring demonstration of skin in the game.
“There are three areas to watch out for in terms of Ethereum’s roadmap over the coming years:
“- The move to Proof of Stake, meaning that ETH will become a yield generating asset for the first time. This has the potential to draw in real institutional interest for the first time. Just talk to any node infrastructure provider about how big they think this opportunity is.
“- The impact of EIP-1559, and how this will ameliorate much of the gas wars that plague UX for Ethereum users, while also ensuring that the success of Defi, or any other application that leverages Ethereum, will have a direct positive impact on Ethereum itself.
“- The rise of Ethereum as the world’s first global, open and transparent capital market platform, leveraging the opportunity that internet-native programmable capital assets (money, securities, and commodities and quasi-equities like tokens) bring to the digital world. We see this potential in Defi, but this is only the beginning. Further evidence stems from how every potential ‘Ethereum Killer” touts their interoperability with the Ethereum main chain and the assets that reside there. The future will contain many blockchains, but just like how great startups can be created anywhere, Ethereum, like Silicon Valley, will remain the home of the greatest concentration of talent, capital, and the most powerful protocols in crypto.”
Antonio Velasquez, Head of Communications at Hermez Network, a decentralized zk-rollup focused on scaling payments and decreasing the cost of transactions on the Ethereum network said:
“Due to its unregulated status, cryptocurrency is full of price manipulation, so it’s hard to guess how much the transition to proof-of-stake is impacting the price of Ethereum.
“A minimum of 500,000 ETH is required to bootstrap Phase 0 of ETH 2.0. That’s about 0.45% of the total ETH supply or $300 million in fiat terms at the time of writing.
“That amount of ETH being parked for staking might not be enough to drive the price up by itself, but it’s certainly generating hope in the progress of the Ethereum ecosystem.
“The 500,000 figure is the minimum required, but there’s no ceiling to it. If ETH 2.0 proves technically reliable and staking becomes a profitable activity, we could see millions of ETH being taken away from the open market and staked to secure the network. This liquidity reduction would likely send the price in an upward spiral.
“After years of talking about ETH 2.0, now it’s finally happening. ETH 2.0 launch comes the same year that a Bitcoin halving event occurred back in May.
“The combination of these technological changes in the two major cryptos is extremely powerful.”
Lucas Huang, Head of Growth at Tokenlon, a fast and secure decentralized exchange powered by 0x protocol using Request For Quote architecture to bring decentralized liquidity to the masses, said:
“We built Tokenlon on Ethereum and there is no other chain with more tokens, more decentralized finance, developer tooling and so on.
“However, when DeFi became really popular this summer, Ethereum reached its limits very quickly. Transaction fees skyrocketed to $10-100 dollars. Only after the DeFi craze ended and fees went back down, people went back to trading NFTs or playing Axie Infinity.
“We imagine that Ethereum will have way more users and interesting non-DeFi dApps if only the throughput would be higher (while keeping security).
“Now, how to solve this? New blockchains have the same challenges. Which leaves us with Layer 2 and Eth2 as solutions. Therefore, we are super excited to finally see Eth2 starting! Although transactions will only be enabled earliest some time next year. Let’s support, stake and see.”
Johannes Schweifer, CEO of CoreLedger, the team empowering businesses of all sizes to quickly and affordably access all the benefits of blockchain technology through end-to-end technical solution, said:
“Ethereum 2.0 is a great opportunity to see an infrastructure elevate to the next level. One of the major challenges with the status-quo is the limitation of transaction throughput and the transaction cost. Proof of Stake will bring us closer to a solution thereof. However as with all new technology it will need time to mature and prove itself. CoreLedger will be among the early adopters but not one of the pioneers on the new network.”
Soravis Srinawakoon, CEO and Co-Founder of Band Protocol, a leading cross-chain data oracle, said:
“If ETH 2.0 achieves what it is setting out to do, the key overall benefits will be increased scalability and reduced costs for both developers and users. It will also allow us to provide data more efficiently and at a reduced cost.
“With a network that is faster, and more efficient, we can expect to see a real increase in adoption rates, which is what we all crave to see as an industry.”
Pol Lanski, from the tech team at Hermez, a decentralized zk-rollup focused on scaling payments and decreasing the cost of transactions on the Ethereum network said:
“This is a crucial step for Ethereum. A cornerstone for the roadmap that was set from the beginning of Ethereum, pushing the boundaries of decentralized coordination mechanisms. A lot of Ethereum will be locked in the deposit contract for Eth2, reducing the circulating supply.
“Ethereum2 is the first truly decentralized Proof-of-Stake chain. it is the one that has the potential to include the most people, without needing the huge capital investment that PoW mining requires. Other attempts have resulted in DPoS, which have a limited number of validators and incentivize candidate validators to attack each other to replace each one in the validator set.
“Moreover, the sharding + rollups mechanism will transform Ethereum into a viable backbone for blockchain applications accessible to everyone.
“Layer 2 solutions are currently the closest thing to Ethereum2 that we have. They are the solution to scalability NOW. They are able to scale Ethereum to have cheap, fast transactions for everyone. With Ethereum2 the scalability will be even higher, orders of magnitude higher.
“Ethereum2 is a dream come true. Scalability is a big issue when our purpose is to enable accessibility for all – for everyone to be able to participate in decentralized networks. Ethereum2 gets us closer to this vision. What we are building is completely complementary and Ethereum2 is even a better platform than Ethereum1 to run a zk-rollup.”
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