More Investors Are Holding Ethereum Ahead of the Ethereum 2.0 Staking Upgrade

  • The number of wallets holding 32 ETH in their wallets has increased significantly.
  • Investors need a minimum of 32 ETH to participate in the Proof-of-Stake mechanism to be launched in Phase 0 any time this year. 

Ethereum founder Vitalik Buterin has assured investors that Ethereum 2.0 is scheduled for a 2020 release. Although there is a contrary belief among the top brass of management, the number of wallets holding 32 ETH in their wallets has increased significantly. Investors need a minimum of 32 ETH to participate in the Proof-of-Stake mechanism to be launched in Phase 0 any time this year. 

Investors Frantically Accumulating ETH

The minimum amount required to participate in the staking process is floored at 32 ETH. Hence, keeping ETH 2.0 phase 0 in mind, investors are starting to accumulate Ethereum in their individual wallets. Moreover, it is proof that investors have placed their trust in the growth of Ethereum. The number of investors holding at least 32 ETH has so increased that it accounts for 78% of total ETH in supply. Furthermore, cryptocurrency exchanges have only 18.7 million of the remaining ETH in supply. 

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The individual wallets have the potential to become future validators on the Ethereum network. It will help increase participation and address the scaling issue as well. On the other hand, concerns are raised that a shortage of liquidity might lead to unpredictability and centralization with the investors of Ethereum. The investors should be sufficiently rewarded for investing in the blockchain as a report suggests that the security price for ETH 2.0 is much lower than its predecessor. 

A Unique Incentive model followed for Proof-of-Stake mechanism

The soon-to-be-adopted model for providing incentives to investors will be based on validating transactions that use new economic valuation tools. The amount of ETH staked will directly affect its security. Furthermore, the former is a function of yield within the Ethereum network. The revenue yield varies with investors and on average should hover around 3.3%. Under a bearish trend, the same number will increase to a staggering 11.6%. 

The other factors that might affect the security of ETH2.0 are the price and its subsequent volatility. Additionally, it has been found out that Proof-of-Stake is a much more complex and rigid mechanism than the current Proof-of-Work structure.

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Steve Anderrsonhttp://www.thecoinrepublic.com
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

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