Ethereum 2.0 is largest staking project

Ethereum 2.0 is largest staking project after Polkadot and Cardano

The new record high pushes Ethereum 2.0 into third place among the largest staking projects. This is despite only having a small amount of Ether deposited in the Deposit Contract.

Ethereum is on a roll. In just one month, the market capitalisation of the second largest cryptocurrency has doubled from 88 to currently 174 billion US dollars (as of 3 February). At 1,565 US dollars, the Ether Profit Revolution price also reached a new all-time high only today, 3 February. In retrospect, the performance appears even more impressive: a year ago, the Ether price was just under 200 US dollars.

As a side-effect of the price increase, the total value of all Ether staked in Eth2 has also reached a new all-time high of 4.1 billion US dollars.

This places Ethereum as already the third largest staking project behind Polkadot (DOT) and Cardano (ADA). Polkadot’s staking capitalisation is currently around 9.9 billion US dollars.

Cardano is only just behind with 9.5 billion US dollars

There is still an apparently large gap between Ethereum and its staking competitors. However, Ethereum 2.0 is still in the testing phase. A comparatively small share of only 2.19 percent of the total Ether in circulation is deposited in the Deposit Contract. With Polkadot, on the other hand, 60 percent of the total supply is staked, according to the portal Staking Rewards. At Cardano, it is even 70 per cent.

These figures already indicate the immense potential that lies dormant in Ethereum 2.0. The current status of the network work is still a promise for the future. The Ether blocked by staking cannot be transferred until the next stage in phase 1. Despite this, Eth 2 is already meeting with strong demand, underlining the confidence in the possibilities of the new network architecture.

A decentralised crypto-centre

Originally, it took 16,384 validators to launch the Beacon Chain, the testnet environment that runs in parallel with the Ethereum mainchain and acts as a proof of concept for the proof of stake process. Currently, the Beacon Chain already has over 78,000 validators. In addition, more than 12,000 validators are still waiting to enter the next slots.

So it seems only a matter of time that Ethereum will cheat its way ahead of Polkadot and Cardano in terms of staking capitalisation. Ethereum 2.0 is without doubt potentially the biggest staking project. Yet the synergy effects can only be imagined at times. Besides futures, which according to Bitcoin Suisse could form in the future on the basis of the new asset Eth2, increased staking demand also has an impact on Ether returns in DeFi applications.

Furthermore, with the introduction of the sharding function in phase 1, the network will receive the much-needed scaling booster that will bring the possible transaction throughput to a new level. Time and again, Ethereum eventually reaches the limits of what is possible. The proof of work has served faithfully, but is not equipped for the demands of a decentralised world computer.

Nevertheless, 2021 will in all likelihood be a test of patience, which will ultimately also be felt by Ether investors through permanently rising transaction fees. According to Ethereum developer Danny Ryan, the transition to phase 1 is not expected until the third quarter. Even then, the network relief on several parallel shard chains should be noticeable. But until the mainnet docks with the beacon chain and smart contracts are also set up on the PoS-based ETH2 network, a few all-time highs are likely to pass.