The deposits in the Ethereum 2.0 smart contract are equivalent to USD 21 billion. These investments correspond to independent validator nodes and staking pools.
There is a total of 6,805,325 ETH in the Ethereum 2.0 smart contract, so its depositors are validators of this network. That amount is equivalent to USD 21 billion, which is larger than the reserves of around 120 countries.
According to data from the World Bank, those nations include several from Latin America, such as El Salvador, Cuba, Nicaragua, Bolivia, Ecuador, Costa Rica, Honduras, Paraguay, Panama, Venezuela, the Dominican Republic, Uruguay, and Guatemala. The reserves of these countries are between USD 3 billion (El Salvador) and USD 18 billion (Guatemala).
The deposit in Ethereum 2.0 also exceeds the reserves of other countries such as Somalia, Zimbabwe, San Marino, Fiji, Luxembourg, Madagascar, Iceland, and Jamaica. All of them have funds below USD 21 billion.
Almost 206 thousand addresses deposited those 6.8 million ETH, for which each of them had to lock 32 ETH in the smart contract. At least, they should keep the deposit until the merge between the current blockchain and version 2.0 of the network occurs.
According to data from CoinGecko, 32 ETH is equivalent to around USD 98,000. Those who deposit this amount in the Ethereum 2.0 smart contract receive interest in ETH as a reward that they can withdraw when the merger occurs.
The current annual return on investment is 6%, and many expect the figure to decline as new validators add their ETH. At the end of 2020, the yield in the first days of staking was 21.6% per year.
Investments in the Ethereum 2.0 Staking
The 206 thousand addresses depositing in Ethereum 2.0 include those corresponding to staking pools. Those platforms offer the possibility of benefiting from the return on investment to those who do not have 32 ETH or do not want to run an Ethereum 2.0 validator node.
According to blockchain explorer Etherscan, the dominant staking pools in the market are Kraken (12.3%), Lido (11.1%), and Binance (8.89%). Both the amounts that belong to exchanges and those dedicated exclusively to staking account for 46.9% of the activity. The remaining 53% correspond to independent validators, which may be individuals or institutions.
Time to Withdraw the Investment from Ethereum 2.0
Nobody knows yet the date of the merger between blockchains when Ethereum will fully become proof of stake (PoS). However, some people have dared to make some estimates.
Developer Justin Drake, who is a researcher at the Ethereum Foundation, conducted a survey. That consultation found that around 86% of the developers believe a minimal viable merger could occur by the end of 2021.
According to studies by the Gemini exchange, December 2023 is a tentative date for Ethereum 2.0 to work at its best. At that moment, investors could withdraw the amount of ETH locked along with the profits they have made.
Regarding the London hard fork, the community is witnessing an increase in the cost per transaction on the network. Although it only lasted a couple of hours, the fee burn rate has led to a deflationary supply.
By Willmen Blanco
