$22.5 million in staked ether within a week of the Ethereum 2.0 deposit contract opening may seem like a lot to those who aren't familiar with crypto. For those of us who have been here a while, this number is a warning sign. The crypto world has been waiting for the launch of Eth 2.0 perhaps to its own detriment. Instead of investing in solutions that are objectively better (NEAR, Nervos, Kadena, et al.), crypto seems intent on waiting on Ethereum to fly. Solutions such as Honeyswap bring immediate relief to fees and network congestion, but they remain virtual ghost towns.

Ethereum's Continued Failure

The $22.5 million staked is only 10% of the amount needed to bridge Ethereum into a stable proof of stake (PoS) network. With only 1% of eth wallets even populated with the 32 eth minimum to stake, achieving 500,000+ more ether into the staking protocol seems even more unlikely with the rising price of ether. Eth holders have many other options for higher profitability.

There is good news for Ethereum maximalists. There seems to be no time limit on the crypto world's ability to wait on the Ethereum network to get its shit together. Most of the projects that are treading water in the bear markets of September and October are Layer 2 solutions for Eth and Eth "expansion packs" like Polkadot. Even news of defi coming to the bitcoin blockchain has done little to move attention away from Eth 2.0.

Vitalik's Float

Vitalik Buterin, creator of Ethereum, had to kick off the 2.0 update personally once the staking contract went live. He claimed 100 validators by sending 3,200 ETH into the new protocol. Yes, it was good for the community to see that the founders of the network were willing to stake their own wealth in the upgrade. However, the fact that many baseless degen projects achieved higher adoption by percentage shows just how illogical and speculative the crypto market still is.

There are more than enough ether whales to fulfill the 500,000 eth requirement to ensure the proper decentralization of the Ethereum network. These whales, however, have no allegiance to the network — only to their own profits. Many of these entities represent aggressive institutional investors who found their way into the dark corners of defi. These are the guys pumping and dumping those shitcoins that show up on Dextools every day. They have an incentive to keep their capital freeflowing, because there are simply too many short term gains in crypto to even consider locking up millions of dollars in ether securing the network.

That leaves the chore to middle class investors who often get dumped on in the short term pump and dumps. There will certainly be a contingent of these investors who are more than willing to accept an 8% APY in return for safety (but actually, the technical risk may not be much different from degen projects). However, you can expect more than a few of these investors to find better solutions as they continue to pop up around Ethereum, especially if there are any hiccups in the rollout of Ethereum 2.0.

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