As per Glassnode data, the total number of ETH 2.0 deposit contracts had reached an all-time high of 8,662,786 ETH as of December 15, 2021. The value of the deposit stands at $33 billion based on the price of Ethereum at press time, which was $3,864.
What is Ethereum 2.0?
Ethereum 2.0, also called Eth2 and Serenity, is the first upgrade to the existing Ethereum Classic blockchain to speed up, improve efficiency and scale the Ethereum network while enhancing security and making the network more sustainable.
Ethereum investors stake on the network by sending their ether to a deposit contract, and staking can result in rewards as high as 23 percent. Ethereum is undergoing a transition towards changing its network to a proof-of-stake network. The transition will make Ethereum’s ecosystem more energy-efficient.
It may be that investors are projecting gains in the future based on the current deposit figures. It is to be noted that both deposits and rewards can only be withdrawn after the completion of upgraded ETH 2.0 phase 1.5 in 2022.
Deposit figures may also indicate a positive view of the future. Despite high volatility across the entire market in 2021, Ethereum has made significant gains, increasing by over 400% year-to-date.
After Beacon Chain‘s launch in 2020, the deposit contract was launched, allowing investors to lock assets on the Ethereum network. The record deposit follows ongoing upgrades to the Ethereum network.
Beacon Chain aims to dock the current Ethereum main net onto Ethereum 2.0 to ensure the complete migration of the Ethereum network. It is a bridge between Ethereum 2.0 and the current Ethereum network.
Record deposits can also be attributed to platforms supporting ETH 2.0. For instance, exchanges like Kraken and Coinbase, along with wallets like MyEtherWallet, facilitate custodial staking for ETH 2.0 by running validator nodes. Kraken also allows investors to stake any amount, not just 32 ETH, as required by Ethereum 2.0’s guidelines.
