What Are Ethereum Upgrades
Ethereum upgrades (formly ETH 2.0 or Serenity) refers to a set of interconnected upgrades that will make Ethereum more scalable, more secure, and more sustainable.
Why Does the Upgrades Matter
With the upgrades, Ethereum can move from PoW to PoS, and introduce sharding. The Ethereum network will significantly reduce energy requirements, allow more transactions to be processed simultaneously, and improve network security.
The Ethereum mainnet (Layer 1) can only process about 15 transactions per second, while more than 1,000,000 transactions occur on the chain every day, leading to clogged networks and increased gas fees. By introducing sharding, Ethereum spreads data storage requirements across the network. Validators will no longer need to store all data, allowing the Layer2 scaling solution based on Rollup technology to be most effective and achieve exponential improvements in TPS.
After the shift from PoW to PoS, validators who maintain the security of the network are required to stake a large amount of ETH to the protocol. If they maliciously attack the network, their staked ETH will be automatically destroyed by the protocol. With this penalty mechanism, Ethereum could reduce the threats of coordinated attacks, such as the 51% attack, thus improving security.
The energy consumption of Ethereum secured by PoW is about 112 TWh/year, and the annual CO2 emission is comparable to that of Singapore. Based on the estimate of the current beacon chain, the total energy consumption of Ethereum could be reduced by 99.95% after switching to PoS.
Three Phases of the Ethereum Upgrades
The Ethereum upgrades are divided into three phases: The Beacon Chain, The Merge and Sharding.
The Beacon Chain
Launch date: December 1, 2020
As the consensus layer, the Beacon Chain provides a consensus foundation for the entire Ethereum network and paves the way for subsequent sharding upgrades.
Users can stake ETH now. However, it should be noted that staking ETH in the deposit contract of the beacon chain is one-way. Once deposited, the staked ETH and accumulated rewards can only be retrieved after the beacon chain enables the withdrawal function in Shanghai upgrade, the next major upgrade following The Merge, which means your staked ETH will remain locked for at least 6-12 months following The Merge.
Launch date: September 15, 2022
On September 15, 2022 the Ethereum mainnet merged with the Beacon Chain, becoming its own shard which uses proof-of-stake instead of proof-of-work.
This signals the end of proof-of-work for Ethereum and starts the era of a more sustainable, eco-friendly Ethereum.
Shard chains spread the network's load across 64 new chains. Sharding will reduce network congestion and increase transactions per second by creating new chains, known as “shards”.
imToken & ETH Staking
The following are the 4 common staking solutions currently available to participate in ETH staking:
Self-run node: You run and manage clients of the executive layer (formerly Eth1) and the consensus layer (formerly Eth2) by yourself
Full custody: A trusted custodian controls your funds, but allows you to stake less than 32 ETH.
Custodial staking pool: Based on the solution of full custody, it offers tokens which represent your staked ETH and allows you to redeem ETH anytime
Staking-as-a-Service custody: You keep control over your staked ETH and staking rewards, and co-manage nodes with service providers through 2 sets of keys.
Having At Least 32 ETH
If you have at least 32 ETH and excellent technical skills, a self-run node will fit you.
However, running your own node can be difficult and you don’t always need to run your own instance. So if you don’t want to be bogged down in endless technical manuals, you can use the imToken ETH staking service.
imToken 2.9.1 now has full support for ETH staking and staking-as-a-service custody with InfStones, which guarantees the ownership and control of your assets through transparent node information. Meanwhile, you can rest assured about node operation, node validation and maintenance services.
Alternatives in imToken ETH Staking category
Having Less Than 32 ETH
It is recommended to choose a staking pool if you have less than 32 ETH, or aren’t willing to stake that much. Factors such as the service provider's brand, token mechanism and ETH discount should all be taken into account when choosing.
Recommended Readings: How to stake ETH on imToken
Staking Rewards Calculator
1. What are the benefits and risks of staking on the Beacon Chain?
Benefits: You can earn around 4% APR. After the Merge, APR is estimated to reach 7%.
Risks: The staked ETH may be slashed due to the misbehavior of the validator.
Meanwhile, the deposited 32 ETH and accumulated rewards will not be transferable until the beacon chain enables the withdrawal function in Shanghai upgrade, the next major upgrade following The Merge, which means your staked ETH will remain locked for at least 6-12 months following The Merge.
Some staking pools may provide a solution for illiquidity, then the safety of the assets will depend on the trustworthiness of the staking pool.
2. Why don't we use ETH 2.0 or Eth2 anymore?
The term Eth1 and Eth2 can easily confuse ordinary users into thinking that Eth1 comes before Eth2 or that Eth1 disappears when Eth2 exists. In addition, some scammers trick users into swapping their ETH for so-called ETH 2 tokens before the Merge, stealing their assets.
Therefore, the Ethereum community decided to stop using the terms Eth1, Eth2 and ETH 2.0, and renamed Eth1 as the execution layer, Eth2 as the consensus layer and ETH 2.0 as the Ethereum upgrades.
3. How do I prepare for the Ethereum upgrades?
imToken will support the following Ethereum upgrades. You certainly don't need to do anything. Your ETH will not need changing or upgrading. There's almost certain to be scams telling you otherwise, so be careful.
If you have any questions, you can contact us by sending an email to email@example.com.
What Will Happen After The Merge
Ethereum is just “55% complete after The Merge”, said Vitalik Buterin. And in December 2021, he discussed that the upgrades of Ethereum would consist of five phases: The Merge, The Surge, The Verge, The Purge, and The Splurge.
The Merge: The integration of the Ethereum mainnet with the Beacon Chain. It starts the era of a more sustainable, eco-friendly Ethereum.
The Surge: Introduce sharding to improve the scalability of the network
The Verge: Optimize the storage situation of Ethereum and reduce the node size.
The Purge: Reduce the amount of hard disk space required by validators, simplify storage, and reduce network congestion.
The Splurge: Ensure that the Ethereum network remains stable after achieving the other four goals.
Are you ready? Click here to go to Learn and Earn.