Reports & Analysis

Ethereum 2.0 Sharing: Risks and Rewards

These days we are celebrating the launch of Ethereum 2.0. An event that marks the beginning of Ethereum turning into a stock-based Blockchainchain. The new blockchain is claimed to be many times more efficient, scalable and secure than the current decentralized network.

Also read: Ethereum 2.0 Sharing Tutorial

While the full launch of Ethereum 2.0 will take months, the first phase of its development, phase zero, is now officially underway. With the activation of phase zero, a new use is made for ether, which is Ethereum’s proprietary digital currency, called Staking.

What is equity? how it works? What are the risks and benefits of using ether for Ethereum 2.0 shares? These are just some of the goal setting shareware that you can use an essay Answer them. The implications of Ethereum 2.0 development on the growing decentralized finance (DIFA) ecosystem as well as the competitive landscape of Blockchain platforms are also examined.

Powerful start

Currently, 1,068,256 Ethereums (approximately $ 623 million at the time of this writing) are listed on Ethereum 2.0, which is about twice as much as the initial target for network launch.

The first step in launching Ethereum 2.0 was successfully taken with the amount of Ether shares exceeding the required amount and also with the participation of the users who are in charge of securing the network operations. In other words, the first cycle for creating and processing new blocks worked well.

Ethereum 2.0 Sharing: Risks and Rewards
Cumulative abundance of Ethereum deposited over time

A total of 100 time periods (epoch) were finalized from 22:58 to UTC on December 1 with the participation of 21,291 validators. epoch is the period when the request for transactions is registered and their token deposits are validated. Validators can be considered equivalent to the miners in Ethereum 1.0 who are responsible for maintaining the security of the network and its data.

At the time of writing, active Ethereum 2.0 creditors receive an average of $ 0.00403 per day, or $ 2.35, for network participation. This value is likely to decrease as the number of validators in the network increases.

Ethereum 2.0 Sharing: Risks and Rewards
Background performance of the last 365 days in the fortieth period

Up to 900 new validators can be placed on the Ethereum 2.0 network every day. There are currently thousands of validators waiting to be activated and waiting to enter the network.

Drawing new boundaries

If someone had invested in ether on January 1 (January 11), today the return on this investment had reached more than 360 percent. Although this is a significant return, this year the assets built on the Ethereum Blockchain have brought in more profits. For example, according to Messari statistics, the YFI token, the sovereign token that did not exist a year ago, has grown by 2,300 percent. Overall, Difai’s asset class against the dollar has risen 456 percent since the beginning of the year.

But not everyone was lucky; Component Lending Protocol (COMP) token prices have been declining by 55% since the beginning of the year after a busy summer.

Rising and falling Ethereum Token prices, and Defy in general, may lead some investors to seek more stable returns. Especially those with lower software risk. This leads us to Ethereum 2.0, also known as Serenity. A stock-based Blockchain that promises stable returns on ether deposits.


The DeFi Summer temporal affinity with the launch of Ethereum 2.0 links the two events directly: If you have a Quinn Defy, you are more likely to have some ether. Fortunately for Diffie traders, a digital currency market industry, the industry’s first bear market was launched at the same time as Ethereum 2.0 and its subsequent bonuses were distributed.

Ethereum 2.0 Network Rewards, a stock proof network, is awarded with Ether and adheres to a distribution curve that depends on the participation and average percentage of shareholders. Many Ethereum developers are interested in comparing it to bonds; However, its expiration date relies more on code review requests at GitHub to be merged in a timely manner, unlike traditional bonds, where an in-house accountant sends checks by mail.

Epoch prizes, if calculated on an annual basis, can compete with the prizes of some DIFA projects.

In fact, Ethereum 2.0 shareholding rewards for early shareholders start at around 20 percent and will gradually decrease to 7 to 4.5 percent as more credentials enter the network.

A quick look at the returns of the more reliable Defy projects shows that their returns are around 5 to 7 percent. This does not mean that you can not get higher returns, but you must accept the risk; The risk that determined the fate of many Diffie projects this year.

Ethereum 2.0; Risk and reward

Sharing, in turn, carries risks that are complemented by the various debts that exist in the realm of defenses. Not only is it possible to reduce users’ initial deposit due to not being connected to the network, but there are also hidden software risks.

Each Ethereum 2.0 validator must select the specifications of its computer system, taking into account the 5 different teams that have provided software for this update in different programming languages. These specifications can have significant drawbacks, regardless of whether the tests performed well in the second half of 2020. This is one of the reasons why developers have set so many stock prizes.

In addition, some clients joined the deposit agreement late, causing investors to miss out on early high-yield opportunities. Prysmatic Labs, for example, had to make major changes to the final implementation of Ethereum 2.0. Unfortunately, the client could not prepare until the capacity was full.

Sharing Ethereum 2.0 also means that your ethers will be locked for months and years. You can see them, but you cannot touch them.

Secondary markets can allay concerns about this time period. For example, Surojit Chatterjee, Coin Base’s senior product manager, announced in a blog post that he intends to create a market for deposited ethers known as Beacon Chain ETH. It will be interesting to see how much such a market can be liquid compared to other tokens, given the inherent risk associated with equity.


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