Ethereum Only 18% Ready for ETH 2.0 With One Week to Go

In brief

  • Ethereum’s long-awaited 2.0 upgrade is contingent on users pouring a large amount of ETH into its deposit contract.
  • The upgrade is set to be released December 1, but only about 18% of the required amount has been staked.
  • If the full amount isn’t deposited in time, the project will face delays. Again.

The team of developers behind the next iteration of Ethereum has remained optimistic that Ethereum 2.0 will arrive on December 1, but as of now, that doesn’t seem particularly realistic. 

According to Dune Analytics, only 95,648 ETH has been committed to Ethereum 2.0’s deposit contract, of the requisite 524,288 ETH—that’s just over 18%. What’s more, in order to launch on December 1 as planned, all that ETH must be deposited to the contract seven days prior, according to Ethereum Foundation core researcher Danny Ryan.

The first phase of the Ethereum 2.0 upgrade, which has already been delayed almost a year, will see the network begin its shift from a proof-of-work consensus protocol to a proof-of-stake one. Proof-of-work, which is how the Bitcoin blockchain operates, asks “miners” to solve complex puzzles in order to verify new transactions, and the first computing rig to solve a given puzzle is rewarded with native tokens.

This poses a scalability problem, in that people who want an advantage can simply buy more computing power, enabling them to solve the puzzles more quickly; investors have built entire data centers that exist purely to solve puzzles, giving them a better shot at valuable tokens at the cost of huge amounts of electricity.

Ethereum 2.0 aims to do away with this puzzle process altogether. On a proof-of-stake blockchain, the network validates new transactions by choosing a “staker,” and the person chosen is determined by how many tokens they hold. This system requires a certain amount of total tokens in order to begin operating, which is why Ethereum 2.0 needs 524,000 ETH. (That’s roughly $243 million worth of Ethereum, at today’s prices.)

Most of the investments so far have come in large chunks, with Ethereum cofounder Vitalik Buterin himself committing 3,200 ETH ($1.4 million) to Ethereum 2.0. One address, bb84d966c09264ce9a2104a4a20bb378369986db, has committed a whopping 17,088 ETH (about $8 million).

According to a blog post from Danny Ryan, the project’s “genesis” will only be triggered if the necessary amount of ETH is in the contract seven days ahead of the launch. “If not,” he wrote, “genesis will be triggered 7 days after this threshold has been met (whenever that may be).”

Another complication is that the December 1 launch (should it happen) only marks the beginning of the first phase of the Ethereum 2.0 upgrade, and won’t actually switch everything over to a proof-of-stake model. 

“Phase 0” of ETH 2.0 will lay the groundwork for Ethereum’s proof-of-stake future while keeping the existing proof-of-work model intact, at least for now. And if people don’t keep staking ETH into the deposit contract and quick, that future could be a decent way off.