What problems will Ethereum 2.0 face in the future?

As we all know, Ethereum 2.0 launched the Genesis Block on December 1 and has now entered the normal operation stage, but what everyone is most concerned about is the issue of funds. Some people think that the price of Ethereum is already very high, while others believe that a real bull market has not yet arrived.

In fact, I have written many articles about Ethereum 2.0 before. What is the significance of writing it again?

This time I will focus on the future and predict what may happen with Ethereum 2.0.

First of all, let's look at the current progress. The number of Ethereum 2.0 stakes has exceeded one million, with an annual interest rate of 15.7%. According to the current progress forecast, there may be another wave of large-scale stakes after the Ethereum 2.0 roadmap is updated. I think there may be four major events in the future of Ethereum 2.0, which is also what the official team needs to consider in advance. (This content only represents personal official, does not contain any ridicule or investment advice, just discuss the facts)

1. Assuming that Ethereum 2.0 reaches stage 1.5 in early 2022, investors who have participated in staking can withdraw their funds. However, if a large number of withdrawals occur at that time, the price of Ethereum will experience a wave of declines, and it will plummet after the withdrawals. Investors will definitely complain in the community.

Assuming that the price of Ethereum is $1,000 in 2022, if a large amount of withdrawals causes the price to drop to $900, and the sharding has not yet been fully formed, a large number of transactions will cause the Ethereum GAS fee to continue to rise to sky-high prices, and the number of pending transactions will increase, it will affect the entire Ethereum ecosystem.

2. When the transformation from PoW to PoS is complete, how should the interests of PoW mining machine manufacturers and PoW mining machine holders be determined? The existing PoW miners switching to PoS may lead to the loss of some miners, and a large number of new PoS miners may appear.

If the number of absenteeism decreases due to the reduction in absenteeism fees, will Ethereum face the situation where no one packages transactions and cause continued congestion? At this time, a group of opponents will emerge, and there may be a possibility of a fork when the Ethereum PoS mechanism is launched.

Image source: Coingecko (Ethereum price curve to date)

3. Currently, all Ethereum blocks are produced in the PoW mode, and are widely used in the DeFi ecosystem. In the 1.5 stage, will a new currency appear and be exchanged 1:1 with the existing ETH to achieve the gradual transformation from PoW to PoS, so that investors participating in the Ethereum 2.0 staking can continue to lock their positions for a period of time and obtain more benefits.

4. Ethereum 2.0 may usher in a short bear market for a period of time after the completion of phase 1.5, causing miners to sell off a large number of Ethereum. After everything stabilizes, after the team's strategy changes and Ethereum 2.0 is further promoted, the bull market switch will be turned on. This process may occur in the second year after the Ethereum 2.0 PoS mechanism is officially launched.

Image source: Feixiaohao (ETH2.0 pledge curve for the past 30 days)

We can now see that the staking work of Ethereum 2.0 has progressed smoothly. I am also very optimistic about the long-term value of Ethereum. It remains to be seen whether new types will emerge in the larger environment next year to attract investors to switch in.

Currently, ETH is the most widely used in DeFi, and the Polkadot ecosystem is also constantly innovating. Other domestic public chains are also eyeing Ethereum to compete for market share.

How it will develop in the future depends on constant changes. Although it is said that one should remain unchanged in the face of ever-changing circumstances, isn’t the world of blockchain groping in constant change? This is also the result of all blockchain practitioners working hard to combine on-chain and off-chain scenarios. Ethereum has successfully taken the first step, and the subsequent stories will be even more exciting.