12Million ETH now Locked In Ethereum’s Consensus layer Deposit Contract.

1. The ETH 2.0 as accumulated about 10% of its entire supply in the consensus layer smart contract.

2. The shift in the network from Ethereum mainnet to Beacon chain formed a proposed future merger which has been facilitated by 360,000 validators who have deposited at least 30ETH each.

3. The consensus layer deposit allows Ethereum to be moved from the Ethereum mainnet to the Beacon chain; a proof of stake version of The Ethereum Blockchain.

The ETH 2.0 has been a long-anticipated project in the Ethereum community. It is a major shift in addressing the limitations of the network’s current consensus mechanism; proof-of-work. The major features of these upgrades are the proof of stake consensus and the shard chains.

At the time of this writing, Over 10% of Ethereum in supply is deposited in the Ethereum consensus layer deposit contract which allows Ethereum to be moved from the Ethereum mainnet to the Beacon chain; a proof of stake version of The Ethereum Blockchain. To a large extent, this news comes with amazing possibilities for the future of Ethereum.

Keywords: Ethereum, ETH, smart contract, blockchain, merge, cryptocurrency, transaction, proof-of-stake, proof-of-work, consensus layer, validators.


ABOUT THE ETHEREUM “MERGE”
News on Etherscan as 10th of March validated that the Ethereum merger has not yet been finalized. The delay is due to prolonged legal security measures implemented to aid the complete transitioning of ETH 2.0 to a proof-of-stake network from a proof-of-work network. The project was presented to prospective validators who believe in the future of Ethereum.

So far, more than 12 million ETH have been deposited in the smart contract from investors.
From the records, over 360,000 investors each deposited more than 30 ETH to make this project possible. With this large volume of ETH in the deposit contract, Ethereum can be transferred easily from the Ethereum mainnet to the current Beacon chain.

The ETH 2.0 will use a Beacon chain that operates synonymously to the proof-of-stake network used on the Ethereum blockchain- launched around December 2020.
The next level of the Ethereum blockchain is almost here as the anticipated merger is now in its final stages. The new Ethereum project- ETH 2.0, will merge operations between the previous Ethereum mainnet with the Beacon chain, also referred to as the consensus layer. On a more detailed note, the merge finalizes the transition of ETH 2.0.
Previous news announced the merge to be in June, but there is a delay due to safety protocols that are disclosed to the public.

Consequently, since there is over $34 billion worth of ETH in the deposit contract, about 2.18 million ETH has been destroyed from the improvement proposal for Ethereum- 1559. The Ethereum improvement proposal-1559 was introduced in August 2021 in London. Reports proved that this loss is unavoidable and needed to stabilize the transaction fees required by the Ethereum network.

Why is the Proof-of-stake transition important?
There will be a merge between Ethereum Mainnet- which serves as the execution layer, and the Beacon chain- which serves as the consensus layer. This merge is crucial to the development of the ETH 2.0 project. It is imperative to state that the merge will cause the network to shift from a proof-of-work network to a proof-of-stake network.
The shift in the network is crucial because the proof-of-stake network executes transactions authorized by the investors in the network. Compared to the proof-of-work network that performs transactions only when validators solve mathematical equations designed by the AI, using computing hardware.
On a simpler note, investors with stakes in the new network can quickly transfer their funds by simple validations compared to the complicated mathematical algorithm-based system. In addition, ETH 2.0 is programmed with improved security measures that prevent an unauthorized third-party breach. More so, technical issues complained about in the previous network have been resolved.
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Differences Between Proof-Of-Work (Pow) And Proof-Of-Stake (Pos) Networks

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The Proof-of-stake is an improvement on the Proof-of-work algorithm. The consensus mechanism accepts data entry into a blockchain database and ensures its security. Safe to say that the consensus mechanism is a security measure for a blockchain.

A notable difference between the proof-of-stake and proof-of-work is that proof-of-stake minimizes the process involved in verifying a transaction in a blockchain. In contrast, the transaction process in proof-of-work consists of numerous algorithms to verify transactions on a blockchain.
Also, proof-of-stake offers more secure access than proof-of-work. Cyber threat or theft on POS is only possible when an individual owns more than 51% of the coin staked in the blockchain- which is very unlikely and practically impossible. In contrast, POW's security can be breached when an individual owns less or controls a coin token.

In addition, POS utilizes the expertise of crypto miners to complete a transaction. Unlike POW, where a computerized algorithm validates transactions on the blockchain.


Future of Ethereum

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Ethereum set the trademark for smart contracts by other blockchains, hence making it of high credibility. There are high expectations for an increase in demand for Ethereum in the future. Also, these smart contracts have made Ethereum a unit of transaction in the digital network- NFT. The exchange of Ethereum tokens only facilitates transactions of NFT assets, which is a big win for the Ethereum market.

The demand for Ethereum on several platforms in different areas of the economy proves the credibility of the coin and more extensive plans for the future. With Ethereum in high demand, there is massive traffic on the network, making it a viable unique currency for transactions.


Conclusion

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The merge between the beacon chain and Ethereum mainnet is an essential improvement for the Ethereum network; as it marks the beginning of the Proof-of-stake for Ethereum. Miners will no longer be assigned the validation of transactions, but rather to stakers. According to Ethereum’s Trent Van Epps, the merge is crucial as it would help stimulate a better transaction on the network, make the network more secured, and cut down the energy consumption by 99.95%.


Author: Gate.io Observer M. Olatunji
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