There are 25 days left to the launch of Ethereum 2.0. Will the beacon chain be delayed again?

25 days left to launch Ethereum 2.0, will the beacon chain be delayed again ?

The Ethereum 2.0 upgrade is a highly anticipated industry event in the blockchain industry in 2020. According to the latest news, version 1.0 of the Ethereum 2.0 specification has been released. If everything goes according to plan, the Ethereum blockchain 2.0 upgrade will take place in early December.

The countdown to the launch of ETH2.0 has begun. What role will Phase 0 play? What changes will the market usher in? Will Phase 0 be delayed again?

1. Deposit contract release

On the evening of November 4, according to a blog post from the Ethereum Foundation, the ETH2.0 technical specification v1.0 was officially released, and the mainnet deposit contract was also released. The contract address is: 0x00000000219ab540356cBB839Cbe05303d7705Fa.

It states in the article that users can register in LaunchPad to become Ethereum 2.0 validators (people who stake ETH on the network) and the main Ethereum contract address (where funds will be deposited). If users want to run their own verification program on Ethereum 2.0, they need to ensure that they have the necessary hardware requirements, technical expertise, and follow the step-by-step instructions using the Ethereum official LaunchPad.

However, ConsenSys reminded users on Twitter that funds should not be sent directly to the deposit contract, but rather should be staked using the staking mechanism (via Launchpad).

“Remember: Do not send ETH to the deposit contract! Sending ETH to this contract address will cause the transaction to fail and does not mean you are staked on ETH2.”

The release and activation of the deposit contract of Ethereum 2.0 means that the Phase 0 of Ethereum 2.0 is about to be officially launched. According to the official news released by the Ethereum Foundation, the creation time of Ethereum 2.0 is set at a block height greater than 1,606,824,000, which is around 12 noon on December 1st, UTC time.

However, there are certain prerequisites for the network to be enabled. The most critical and important one is that the number of validators participating in the staking on the network must reach 16,384. Each validator needs to stake 32 Ethereum, which means that there must be 524,288 ETH in the deposit contract, which is more than $200 million (calculated at $400). As long as this condition is met, the Ethereum 2.0 Phase 0 network will be officially launched on December 1.

2. The role of Phase 0 startup

Influenced by this news, the price of Ethereum soared from US$383 and once again broke through the US$400 mark, an increase of 5%.

Ethereum 2.0 will be divided into at least three phases, namely Phase 0, Phase 1, and Phase 2. Phase 0, as the core of Ethereum 2.0, will launch the "beacon chain" as the random number generator for the entire 2.0 network. In the subsequent Phases 1 and 2, functions such as sharding and smart contracts will be gradually enabled, and validators will provide transaction verification services for the corresponding shards based on the random allocation of the beacon chain.

At the same time, Phase 0 will officially turn the Ethereum blockchain to the PoS consensus mechanism , and transactions will be verified by people who hold a large amount of ETH. Ethereum 2.0 allows ETH holders to participate in running the network, instead of proof of work like now.

It’s worth noting that Phase 0 won’t have any actual functionality. When it goes live around December, all the Phase 0 ETH 2.0 blockchain can do is verify blocks. “What you think of as the core functionality of Ethereum is not part of Phase 0,” said Tim Ogilvie, CEO of Staked, a company that handles servers and infrastructure on behalf of stakers. “You can’t transfer ETH, you can’t participate in DeFi or other smart contract activities.”

He said that what Phase 0 does is to establish a consensus mechanism to protect the security of the network, and there is enough money to protect all the assets of ETH. After that, Phase 1 will allow users to enter and exit ETH in smart contracts and introduce sharding, a technology that speeds up the blockchain. Phase 2 will reintroduce the full smart contract functionality we use for ETH1. Ogilvie said that the most optimistic estimate for Phase 1 is that it will take 6 months, and it will take about two years to reach Phase 2. "More conservative estimates are much longer than this. Therefore, it will take several years for Ethereum 1.0 to fully transition to 2.0." That is to say, only after a few years will the ETH2.0 network be able to function like today's ETH1.0 mainnet.

3. Will Ethereum 2.0 be delayed again?

Ethereum has faced many challenges in the past period of time. The 2.0 upgrade was not so smooth, and it can even be said to be difficult.

First, DeFi (decentralized finance) has burdened Ethereum. This year, DeFi has been hot for a hot summer, and users have invested billions of dollars in DeFi financial products. This boom has led to a surge in Ethereum network activity, and the availability of the Ethereum network has been greatly tested. By then, people have shifted their hopes to the upgrade of ETH2.0, expecting it to significantly increase throughput as promised. Subsequently, as the popularity of DeFi declined, the usage of the Ethereum network continued to decline.

Secondly, there is a need to continuously solve problems that arise on the test network. According to Ogilvie, there may be hundreds or thousands of bugs in Ethereum's various test networks over the past year or so. Even if the developers and testers eliminate these bugs, there may be many other bugs, most of which may be minor. "Perhaps only when real tokens are used on the real network will more serious problems be discovered."

Regarding the question of whether Phase 0 will be delayed further, Richard Ma, CEO of blockchain insurance company Quantstamp, said that there are many test networks now, including two test networks created specifically for testing the beacon chain genesis block, and there are also many bonuses to be paid to users who find client problems. "At this point, there won't be too many problems."

The key to whether there is a delay is whether users are willing to serve as validators on Ethereum. If the staked funds do not reach $200 million worth of ETH, this grand network upgrade will not be launched. Ogilvy said that the problem may be that the staking yields provided by ETH2.0 clients are very low compared to the newer DeFi protocols based on ETH1.0. Moreover, it will take a long time for stakers to withdraw the staked ETH from the ETH2.0 client.

However, he believes that “the smartest money may wait and see for a while to find out what ETH2.0 really looks like. Even if funds are short, ETH’s loyal users and the Ethereum Foundation will provide financial support for the project.”

So far, nearly 19,000 ETH have been deposited into the ETH2.0 contract address, reaching 3.6% of the funds needed to launch the network. Users can check how far away Phase 0 is from launching in depositcontract.eth (Ethereum deposit contract), and can also check the amount and value of ETH staked in the contract on Etherscan.

Brantly Millegan, director of operations at Ethereum Name Service, said that ETH2.0 is just "a piece of the puzzle" to solve Ethereum's bottleneck problem. Other expansion solutions, such as layer 2 protocols and side chains, can also play a role.

Regardless, even if Phase 0 doesn’t have much functional impact, it’s a momentum shift worth celebrating for Ethereum investors and could be good news for ETH prices.