Ethereum: Staking income doubled?

Ethereum staking could soon be twice as profitable. Coinbase estimates that returns on ETH holdings will double after the Ethereum network merge in January.

Growth expectations

Assuming that the estimates from cryptocurrency exchange Coinbase are accurate, in this case, ETH’s stake could double after the network merges with the current Ethereum network’s proof-of-stake chain, or beacon chain.

Current estimates suggest that the potential annual yield from deploying Ethereum (ETH) tokens is twice the expected annual yield from Coinbase Custody.

Ethereum’s next major upgrade will include many improvements, including the release of a full proof-of-stake consensus model.

Maybe up to 12%?

Ethereum is about to switch to proof-of-stake, which will increase ETH’s yield because transaction fees will cover the cost of staking in addition to base transaction fees. This process is expected to take place in June 2022.

The statement seemed to suggest that deployment rewards could increase as the Ethereum ecosystem evolves toward a more miner-friendly model, in which transaction fees go exclusively to block miners, while ETH holders are rewarded the longer they hold onto their cryptocurrency.

Coinbase expects a return of 9% to 12% on investing in ETH, which is 4% to 5% higher than the initial expected return.

The latest iteration of Ethereum

The Beacon Chain is the proof-of-stake ledger for Ethereum 2.0, the latest version of the original Ethereum network. It is the first step towards a brand new network where all legacy ETH will be converted into 256 Beacon Chain tokens (ERC20).

The merger of the Ethereum network will take place after the leading Ethereum network merges with Beacon, which will mark the end of Ethereum's proof-of-work and fully transition to proof-of-stake. The merger is expected to take place before the launch of the shard chain.

Once enabled, the mainnet’s proof-of-stake consensus protocol will seamlessly transition to a fully sharded state, preserving transaction finality while maximizing throughput and minimizing gas costs.

Strong trend in digital assets

As CryptoGlobe recently reported, a massive Ethereum whale finally moved millions of dollars from a dormant wallet, sending those funds to an unknown address. The funds were then moved to prepare for the upcoming release of the Ethereum 2.0 upgrade.

Ethereum Whale is the name given to the person who sent 1947 ETH in 2015. At the time, 1947 ETH was worth $2336. Today, these funds are likely worth more than $5 million - a staggering 22,000% change.

Ethereum is slowly making its platform more valuable. On August 5, more than $4.6 billion in funds were wiped out in a hard fork, which has prompted the platform to continue to grow and become more valuable.

After the London hard fork, the network was upgraded to allow users to transact without paying exorbitant transaction fees. Users can pay a small fee to complete transactions three times faster. It is also more difficult for miners to manipulate the system on a large scale, as they are not responsible for processing transactions.