Valid Points: The Four Keys to Unlocking Ethereum 2.0, Explained

Three weeks into its launch, Ethereum 2.0 is close to tripling its initial deposit threshold of 524,288 ETH. These deposits made in increments of 32 ETH represent the stake of active or soon-to-be active validators on the network. 

In order for Eth 2.0 to progress to its next phase of development, the new, recommended minimum number of validators is 262,144, which multiplied by a stake of 32 ETH would also mean a minimum deposit threshold 8,388,608 ETH. As background, the next phase will initiate the creation of 64 mini-blockchains, also called “shards,” to boost transaction throughput and network scalability. 

Thereafter, in phase 1.5, developers are expected to activate ETH transfers on the network and seamlessly merge all Ethereum users and decentralized applications (dapps) to the new proof-of-stake blockchain. 

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There’s much work still to be done on Eth 2.0, but the highly anticipated launch of the network and the onboarding of hundreds of thousands of validators are thought to be the most difficult technical tasks in the entirety of this phased rollout. 

Danny Ryan told CoinDesk in an interview back in late September, “Phase 0 is much more complex than I believe phase 1.5 is. This merger … [phase 0] is essentially a bootstrapping phase where this new consensus mechanism and system is bootstrapped in parallel to the old system.”

As of Tuesday, Dec. 15, Eth 2.0 is 18% closer to successfully completing its bootstrapping phase. There are roughly 33,700 active validators on Eth 2.0, with close to 12,500 additional ones waiting in an activation queue for entry. 

Phase 0 is far from complete. While the first few weeks after launch have been promising, there’s still a long way to go before we can all breathe a sigh of relief at getting past the most difficult phase of the network’s live development unscathed.

New frontiers

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It’s important to remember not all Eth 2.0 staking options are equal.

Staking services come in two flavors: custodial and noncustodial. In practice that means the validator key is either held by the service provider or it’s created and held by the investor.

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