Eth 2.0, the next phase of the second largest cryptocurrency project has now received up to 5.6 million ETH in its deposit contract, currently valued at over $13.77 billion. According to the latest data shared by Etherscan, Eth 2.0 current contract address deposit represents the highest ever staked ETH on record.
The much-awaited Eth 2.o, which transitions the Ethereum network from its current proof-of-work consensus algorithm to proof-of-stake, was initiated in the first week of December 2020 with the Beacon Chain activation. That epoch signalled a new frontier, allowing people to deposit ETH into Eth 2.0 contract deposit in anticipation of becoming validators on the Ethereum network.
ETH built up in the staking contract, although it took off on a slow start and exploded a few weeks later, culminating in today’s contract deposit. ETH price reached a new all-time high on May 12, trading above $4,300 per ETH but had since crashed to over 45 per cent of its value since then. As of this report’s time, ETH is trading around $2,440 with a market cap of $280 billion and a market dominance of 17.5%, even with the growing presence of competitor smart contract chains like BSC, Solana, Avalanche etc.
With the surge in DeFi activities and Ethereum network unarguably the preferred base layer protocol for decentralised finance, it is not atypical to see that large non-exchange ETH wallets have been driving the increased activities on the Ethereum network. Santiment, a blockchain and cryptocurrency analytic firm, lends credence to a recent post. The firm, in a recent tweet, posted that
“The top 10 Ethereum non-exchange whale wallets are continuing to climb in terms of ETH held. Combined, the 19.67 million coins held by these addresses are the most combined ETH owned by the top 10 non-exchange addresses since July 2016.”
For context, some of these “non-exchange whale wallets” include some of the top DeFi protocols ranging from lending, AMM and others. DeFi enthusiasts continually stake their assets (commonly ETH) in smart contracts to earn incentives in the form of network fees, interest from loans generated or network tokens (yield farming). According to another recent data published by Glassnode, digital exchanges now hold less than 13 million ETH, representing the lowest level in more than two years. However, smart contract deposits continue to grow on the flip side, with more than 23% of the total supply of ETH now being held in several smart contract protocols.
Although Eth 2.0 staking contract continues to see a surge in deposit, there is, however, a delay in the full transition date from Eth 1.0 to Eth 2.0. Transitioning a large network like Ethereum from PoW to PoS with all the assets live on-chain comes with a huge risk. Ethereum Foundation developers are working hard to make this happen but must ensure adequate preventive measures are put in place.