After going live last week, the deposit contract for Ethereum’s 2.0 upgrade now holds over 50k ETH – 10% of the threshold needed to activate the watershed update.
This deposit contract is the cornerstone of the Ethereum 2.0 update and serves as a bridge for the migration Ethereum network away from proof-of-work (PoW) to a new technical infrastructure that supports proof-of-stake (PoS).
In order to become a transaction validator on the new network (those individuals who process transactions like miners in PoW), an Ethereum user must stake at least 32 ETH. There are currently 52,801 ETH locked up in the deposit contract worth $23.8 million, and it will need at least 524,288 ETH split between 16,384 stakers to trigger Eth 2.0’s “genesis event” and activate the upgrade.
Once Ethereum 2.0 goes live, these validators will begin earning block rewards on the new network at an estimated rate of 8-15% annually – a lucrative yield that is a necessary deal sweetener for what may be considered a risky upgrade.
A few days after the contract went live, Ethereum creator Vitalik Buterin sent 3,200 ETH worth roughly $1.4 million to the contract to claim 100 validators. Once the 16,384 validator threshold is reached, then the central nervous system of the new network, the Beacon chain, will go live.
Ethereum developers estimate that the Beacon chain will go live sometime in December. If and when it activates, the migration will move on to the second of four phases needed to complete the Eth 2.0 upgrade.