Barely two weeks after the launch of the Ethereum 2.0 Beacon Chain, the demand for staking contracts is already exceeding supply. ETH 2.0 is off to a very strong start as more investors flock to the platform.
One of the major highlights of ETH 2.0 is the network’s transition to a new consensus mechanism. Simply put, Ethereum is moving from its original Proof-of-Work (PoW) algorithm to Proof-of-Stake (PoS). This transition means that instead of relying on dedicated computer software mining for validation, users can now stake their cryptocurrency on the network as collateral to validate.
Prior to the launch of ETH 2.0, a little over 500,000 ETH needed to be staked on the network for the upgrade to commence. This threshold was hit in no time, and a few days later the staking contract had over one million staked ETH.
Ironically, even after the launch of ETH 2.0, the deposit contract is still receiving almost 40,000 ETH in deposits every day. As of press time, the balance of ETH in the deposit contract was nearly 1.3 million ETH.
According to Eric Conner, an Ethereum core developer, if the current rate of deposits persists, there will be over 15 million stake ether in the contract within the next year. Furthermore, there is currently a backlog due to increasing deposit levels. There is now a 13-day wait period before deposited ETH can be allocated a node status.
Ethereum has pegged the minimum deposit at 32 ETH. This means that users who own less than 32 ETH do not qualify to operate a node. However, an exchange like Kraken has launched a staking service for ETH 2.0. Interestingly, its staking service already has over 100,000 ETH staked on its exchange.