Ethereum
Eth2 update
The very first beacon chain upgrade, Altair, is ready to go! Activation is set for ~October 27, 2021. All validators must upgrade in order to continue following the correct chain or risk downtime and slashing penalties. Altair includes many technical fixes that must be done prior to the ultimate Eth1/Eth2 Merge (~Q2 2022) including “light client support, minor patches to incentives, per-validator inactivity leak accounting, an increase in slashing severity and cleanups to validator rewards accounting for simplified state management.”
After starting Q3 with ~180,000 active network validators, the number of Beacon Chain validators has increased ~30%, nearing 240,000. Of those ~240,000 validators, Prysm is the overwhelming majority when it comes to Eth2 clients (chart below) at 61%. In September, a concentrated effort to embrace client diversity and achieve a more equitable distribution among the clients took place. Ethereum core developers would like no one client to have more than 40% majority prior to the Merge.
Source: Coindesk
The amount of ether locked into the Beacon chain has continued to increase, surpassing 7.8 million ETH locked in the deposit contract. The breakdown of staking services is below with long-awaited Rocket Pool, a decentralized staking service, launching October 6th. It is important that no one exchange or staking service controls too much of the stake, otherwise, it becomes a single point of failure and centralization risk.
Source: Bankless
Key on-chain data for ETH still looks bullish including transaction fees, ETH burnt by the addition of EIP-1559, and the resurgence of DeFi TVL (charts below). Transaction fees are still on the higher side, albeit fairly volatile. And daily interactions with smart contracts have stabilized at an elevated level. This is in stark contrast to Bitcoin, which is seeing its lowest daily fees in nearly two years. With EIP-1559 in place, these fees are now contributing towards ETH’s value accrual and scarcity, rather than all of it going into miners’ pockets. All in all, while the market looks to be in disarray right now, there are some signs creeping up that paint a positive picture.
Source: Delphi Digital
Source: Coindesk
Source: Coindesk
