protocols

eth2 update 013


We cover eth2’s traction, our expectations for the staking rate, and the latest news on the eth1<>eth2 merge.

eth2 update 013

By Viktor Bunin · Apr 9 2021

Today we’re covering eth2’s traction and providing an update on the eth1<>eth2 merge.


eth2’s traction

eth2 is continuing to grow! There is now:

  • 3.7m ETH deposited, equivalent to $7.8bn USD—roughly 3.2% of all ETH
  • 115k validators, all of which are active
  • An empty activation queue!
  • Last slashing: April 6th, 2021, for an attestation violation

I subscribe to the theory of eth2 staking as the Internet Bond (crypto’s equivalent of the risk free rate of return), proposed by Mara Schmiedt, BD Manager at Bison Trails, and Collin Myers. Only 5k ETH has been deposited to eth2 since our last update on March 18th, showing a slowing rate of deposits compared to prior months. In today’s bull market, many token holders are looking for higher risk activities, such as the 639k ETH locked up in Fei’s launch. We think there is still latent demand waiting to join eth2 and expect the staking rate to increase shortly, but anticipate that the staking rate may remain below 10% until the eth1<>eth2 merge.


eth1<>eth2 merge

Progress continues to accelerate on the merge, as researchers, client teams, and community members approach the work from several directions. Due to the nature of Ethereum development, there is no top-down, command-and-control-style roadmap by which things are done. Many efforts are in flight and the community works together to reconcile differences and reach consensus on important decisions before moving forward.

  • The first track of work is designing how the whole system will function together, with special focus placed on how the application layer (where all the dapps reside) and the consensus layer (PoW → PoS) will interact. This design is then translated to the merge spec. Danny, Protolambda, Dmitry, Mikhail, and others recently held the first Merge Implementers’ call, which is well worth a listen.
  • The second track of work is the upcoming Altair hard fork, which will introduce several changes to how eth2 functions. Altair must occur before the merge is possible. One dynamic emerging as a result of this requirement is that the teams working on the merge are operating off of the Phase 0 specification (how eth2 currently works), and will need to rebase to Altair once it has shipped.
  • The third track of work comprises efforts to create POCs and testnets that actually bring the eth2 vision to life.

    “[Last] week, protolambda and others released plans for Rayonism☀️, an ambitious month-long hack to create Merge devnets based on current specs with a stretch goal of adding sharding to these devnets along with L2 rollup integrations. The primary motivation is to unite development around a unified Merge spec to onboard all client teams firmly into the Merge design and process so that an informed decision on the Merge roadmap can be agreed upon in the coming months. That, and have a little bit of fun :)” - Danny Ryan’s Finalized no. 25
  • The last track of work will be for all of the eth1 and eth2 client teams to implement the spec required for the merge, conduct testnets, and otherwise prepare for the transition from PoW to PoS.

Incredibly, the initial merge spec for Rayonism is already available!

Rayonism takes place from April 16th to May 14th, which overlaps with the Scaling Ethereum hackathon (hosted by ETHGlobal) happening from April 16th to May 13th. There has never been a better time to get involved in advancing Ethereum. If you need any advice on where to start or who to talk to, slide into my DMs and I’ll be happy to help!

There are no official estimates at this time of when the merge will actually occur. Some folks are optimistic that a minimum viable merge will happen in 2021, but personally I think early- to mid-2022 is more likely. Altair happening in early summer leaves only ~5 months of the year to get everything implemented, tested, and launched.

Additionally, a lot of work will need to happen on the community governance side to make the merge possible, specifically around building consensus and queueing up support in the face of predictable FUD from folks that want Ethereum to stay on PoW as long as possible. With hundreds of billions of dollars in value on Ethereum, it’s important to get this right.


—Viktor Bunin, Protocol Specialist



About Bison Trails


Pioneering Blockchain Infrastructure®

Bison Trails is a blockchain infrastructure platform-as-a-service (PaaS) company based in New York City. We built a platform for anyone who wants to participate in 22 new chains effortlessly.

We also make it easy for anyone building Web 3.0 applications to connect to blockchain data from 30 protocols with Query & Transact (QT). Our goal is for the entire blockchain ecosystem to flourish by providing robust infrastructure for the pioneers of tomorrow.

In January, 2021, we announced Bison Trails joined Coinbase to accelerate our mission to provide easy-to-use blockchain infrastructure, now as a standalone product line. The Bison Trails platform will continue to support our customers. With Coinbase’s backing, we will enhance our infrastructure platform and make it even easier to participate in decentralized networks and build applications that connect to blockchain data.


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THIS DOCUMENT IS FOR INFORMATIONAL PURPOSES ONLY. PLEASE DO NOT CONSTRUE ANY SUCH INFORMATION OR OTHER MATERIAL CONTAINED IN THIS DOCUMENT AS LEGAL, TAX, INVESTMENT, FINANCIAL, OR OTHER ADVICE. THIS DOCUMENT AND THE INFORMATION CONTAINED HEREIN IS NOT A RECOMMENDATION OR ENDORSEMENT OF ANY DIGITAL ASSET, PROTOCOL, NETWORK OR PROJECT. HOWEVER, BISON TRAILS (INCLUDING ITS AFFILIATES AND/OR EMPLOYEES) MAY HAVE, OR MAY IN THE FUTURE HAVE, A SIGNIFICANT FINANCIAL INTEREST IN, AND MAY RECEIVE COMPENSATION FOR SERVICES RELATED TO, ONE OR MORE OF THE DIGITAL ASSETS, PROTOCOLS, NETWORKS, ENTITIES, PROJECTS AND/OR VENTURES DISCUSSED HEREIN.

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