The current Ethereum network runs a Proof-of-Work (PoW) consensus algorithm, this is how it validates transactions and includes them in the blockchain. The plan was always to move to a Proof-of-Stake (PoS) consensus algorithm which would solve the scalability issue and is more eco-friendly as it requires much less electricity.
After years of development, the ETH 2.0 deposit contract was released on November 4th. This was the start and would initiate the birth of the beacon chain or Phase 0 of the Serenity upgrade. In order for that to happen, the requirements were:
- 525,288ETH deposited into the contract
- 16,384 Validators
The funds deposited into the contract are staked, and each participants is required to deposit no less than 32 ETH. The staking reward the validators are earning comes to around 20% APY on deposited funds. The other side of the coin is that it’s a one-way street; no funds can be withdrawn from the contract until Phase 2 which is the last development phase of Ethereum 2.0 and that could last a few years.
Long-term Ethereum believers did not disappoint and have staked close to 700,000 ETHs into the contract which right now is valued at over $400,000,000. In fact, a Dubai-based investment group staked $10,000,000 alone last week.
As the requirements were meant before the 24th of November, the beacon chain will be created on December 1st at 12:00UTC. This is called the Genesis event, where the first block will be produced for the novel chain.