The inventor of Ethereum, Vitalik Buterin, is sending USD 1.4 million or 3200 ETH in 100 transactions to the Eth2 Deposit Contract.
Buterin is trying to build trust with users to achieve a goal of 524,288 ETHs set for Eth2 launch.
Ethereum is in a bullish phase. On November 4th, the Ethereum Foundation confirmed the launch of the Ethereum 2.0 Deposit Contract. It also set December 1 as the tentative date for the Beacon Chain to start. The founder of Ethereum, Vitalik Buterin, supported the first stage of phase 0 to Ethereum 2.0.
Since the deposit contract was launched, investors can participate by paying 32 Ether (ETH) and sending the funds to the address of the deposit contract. A total of at least 16,384 deposits or 524,288 ETH are required, almost USD 200 million, before the beacon chain can be used.
Buterin has been one of the most important donors so far. The founder of Ethereum has proven his confidence in the project by making a down payment of 3200 ETH for over 1.4 million USD, divided into 100 transactions of 32 ETH each. Buterin still keeps about $ 2.5 million in the address he sent the funds from and $ 1 million in other assets based on Ethereum.
It is speculated that Buterin’s transactions are part of a strategy to build investor confidence and encourage them to participate in ETH to the extent required. As part of deploying the Beacon Chain, investors must keep the funds under lock and key for two years. Some users have raised concerns about why Buterin is sending out a message of trust. At the same time, the founder of Ethereum published a study in which he examined the advantages of the consensus protocol of Ethereum 2.0, Proof-of-Stake, compared to the consensus protocol of Bitcoin, Proof-of-Work.
Benefits mentioned by Buterin include energy savings and the elimination of special equipment in order to be rewarded for staking. Because of this, it is expected that more users will join the network. However, one user pointed out that with phase 0 of ETH2, users must maintain 100% uptime on their funds for the entire 2 years. Buterin said:
Nobody is expected to be able to maintain 100% uptime. You can be profitable with just 60% uptime. In case you’re afraid to speculate because you fear your computer may go offline for a day, the rules of reward and punishment are designed to be fairly lenient.
A quick post re-stating the case for proof of stake:https://t.co/viW2EYAXf3— vitalik.eth (@VitalikButerin) November 6, 2020
18 million for the Ethereum 2.0 deposit contract
At the time of writing, the deposit contract is estimated at 40,165 ETH in the amount of 18,656,250 USD, around 10% of the amount required to deploy the Beacon Chain in December. The question remains whether the goal will be achieved by the provisional date.
Experts like Adam Cochran have stated that the launch of Eth 2.0 will cause a supply shock in the market. Therefore, this will have a positive effect on the price of ETH. But it is also necessary that around 13% of the circulating supply of ETH be staked out in order to achieve the current level of security that Ethereum has with the PoW protocol.
In the community, a possible increase in the centralization of the network is also a concern of the users. Coupled with the uncertainty due to the volatility of the ETH price and the risk of losing a large amount of money. As a result, the developers of the Ethereum Core have reiterated several times that investors need to make sure they are sending the funds to the right address.