Valid Points: Ethereum 2.0 Soars Past 1M ETH Staked – CoinDesk

by crypto journalist

We’ll soon be incorporating data directly from CoinDesk’s own Eth 2.0 validator node by staking our own funds to the newly launched network. To be clear, this isn’t the start of a day-trading division at CoinDesk. All profits from running the validator will be donated to a charity of our choosing once transfers are enabled on the network. For the full overview of CoinDesk’s first-ever staking venture, click here. 

Since the epic launch of Eth 2.0 last Tuesday, there have been tons of data about its activity to decipher and analyze. Early statistics shared after the first day of launch in our previous newsletter revealed how Eth 2.0 was inundated with 66% more funds than the minimum required to secure network operations. We were also able to view in real time the progression of over 100 epochs, in which more than 3,000 blocks were processed by validators. 

Heading into the network’s second week of live development, we’re seeing the total amount of staked ether continue to rise for the network from 66% to 141% above the original threshold of 524,288 ETH. We’re also seeing a higher number of blocks and epochs finalized on the network, which is positively impacting the amount of rewards validators accrue daily. 

We’ll take a deeper look at some of these Ethereum 2.0 metrics in our weekly Pulse Check. Then, for the New Frontiers essay, we’ll explore some of the scaling solutions to Ethereum that are being developed alongside the Eth 2.0 upgrade. 

For now, users who have deposited the minimum amount of 32 ETH to Eth 2.0 can do little else with their funds except validate. Validating on Eth 2.0 primarily consists of proposing new blocks and attesting to blocks that other validators have proposed. With each proposal and attestation, validators earn rewards that are automatically added to their staked ETH. 

The first day of Eth 2.0 brought an average earning of 0.00569 ETH. This is slightly higher than what we reported in our previous issue of Valid Points, which was 0.00403 ETH. (Our calculations counted the rewards earned from the first 100 epochs rather than the full 112 epochs initiated on that day.)

This chart illustrates what percentage of eligible validators on Eth 2.0, on average, are attesting and proposing blocks. A figure as high as 99% indicates nearly all users who have staked on Eth 2.0 and passed the activation queue for entry into the network are participating in consensus. 

A high participation rate among Eth 2.0 validators comes as no surprise, given there is little else for users to do on the network. However, as network functionality broadens and the pool of validators continues to increase, we’re likely to see variations from this near-perfect figure. 

Called BASEFEE, the burnt fee creates a lower bound on how much it costs to transact on Ethereum. The tip allows urgent transactions to jump the queue to be processed into a block and settled on the Ethereum blockchain. Of the two, BASEFEE has garnered more attention due to the game theoretical implications of imposing a consistent fee burn over the more traditional first auction model Ethereum currently uses.

Better fee estimation will make the dapp experience more slick and will lower fee variance, he said. Moreover, a new deflationary pressure on ETH through transaction burns is thought to be a positive for the long-run price implications of the digital asset. 

This content was originally published here.

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