As Ethereum’s transition to proof-of-stake (PoS) nears and network hashrate hits another all-time high, Ethereum 2.0 contract nears 13 million ether worth 22.6 billion dollars using today’s ether exchange rates. Additionally, according to a decentralized finance (defi) educator, the $22.6 billion of Ethereum that continues to grow will not be unlocked until another upgrade is applied after The Merge.
Ethereum 2.0 Contract Nears 13 Million Ether Locked – Defi Educator Says Merger Won’t Be a Negative Price Catalyst
On June 4, 2022, the etherscan.io webpage that hosts the Ethereum 2.0 contract, indicates that there are 12,785,941 ether locked in the contract. The Ethereum 2.0 contract holds the funds for a large number of ETH validators as it takes 32 ETH to become a validator. Every day a decent amount of validators lock funds into the contract and the current value locked into the contract is worth $22.6 billion using current Ether exchange rates. In the past 24 hours, more than two dozen deposits of 32 ether ($56,684) have been added to the contract.
The $22.6 billion in ETH is locked and illiquid and may not be for some time. This means that once the 32 ETH has been deposited, the funds will remain locked until plans are coordinated after the PoS transition. Most recently, the decentralized finance educator (defi) Korpi posted a thread about the assumption that the 12.7 million ether will be immediately unlocked and discarded after The Merge.
“I have noticed that some people view The Merge as a negative price catalyst due to a supposed huge [ethereum] unlock – This is wrong,” Korpi shared on Twitter. “Staked [ethereum] will not be unlocked at The Merge. The merger will not allow withdrawals. This is scheduled for another Ethereum upgrade that could take place 6-12 months after The Merge. In other words, the two staked [ethereum] and staking rewards won’t go into circulation for a long time,” Korpi added. The Challenge Educator continued:
Unblocked [ethereum] will be released slowly. Even when withdrawals are enabled, all milestones [ethereum] will not be immediately available. There will be an exit queue that can take over a year in the worst case or several months in a more realistic scenario. [The] release will be slow.
Korpi is of the opinion that “Ethereum Maxis” staking coins will not sell so easily
Most recently, on June 4, at a block height of 14,902,285, Ethereum’s hashrate hit an all-time high of 132 petahash per second (PH/s). In late May, ETH transaction fees hit a 10-month low as transaction costs fell below $3. At the recent Permissionless conference, Ethereum software developer Preston Van Loon said The merger could take place in August. Ethereum co-founder Vitalik Buterin confirmed that The Merge could be implemented by August, but he also escaped delays.
Amid recent network records, Ethereum’s Beacon Chain has seen a seven-block reorganization, and these types of issues can invoke a PoS transition delay. The Ethereum Beacon Chain is the parallel chain to the Ethereum proof-of-work (PoW) network. Ethereum developer Tim Beiko recently detailed that The Merge will likely go live by the third quarter of 2022. Beiko further pointed out that he “strongly suggests” that Ethereum (ETH) miners are not investing in more mining rigs in the future.
Challenge educator Korpi continued his Twitter thread by explaining that the Ethereum 2.0 withdrawal process will be slow. “Retract [ethereum], a validator must exit the set of active validators, but there is a limit to the number of validators that can exit per epoch. There are currently 395,000 validators (active + pending). If no new ones are put up (very unlikely), it will take 424 days for them all to come out. staked [ethereum] is often a battery never sold. Korpi added:
Who would voluntarily lock [ethereum] for several months, without knowing when withdrawals will even be possible? [Ethereum] max, no doubt. More [ethereum] bettors are long-term investors. They are not interested in selling, especially not at current prices.
What do you think of the Ethereum 2.0 contract which is approaching 13 million ether? What do you think of Korpi’s statements and the slow unfolding process he explained? Let us know what you think about this topic in the comments section below.
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Defi Educator Says $22 Billion in ETH 2.0 Funds Won’t Be Liquid Immediately After PoS Transition
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