As the Ethereum network accelerates the shift towards ETH 2.0, investors are already gearing up for the staking functionality by continuing to deposit ether.
As of December 15, 2021, the total ETH 2.0 deposit contracts had attained a new all-time high of 8,662,786 ETH, data provided by Glassnode indicates.
Based on Ethereum’s price of $3,864 at press time, the deposit value stands at $33 billion.
The deposit contract is where Ethereum investors are sending their ether if they want to stake on the network, and the staking attracts rewards of up to 23%. The upgrades are in line with Ethereum’s ongoing transition towards changing the network to a proof-of-stake. The shift is expected to make Ethereum an energy-efficient ecosystem.
Drivers for high ETH 2.0 deposits
The current deposit figures could also indicate that investors are projecting gains in the future. Notably, both the deposits and the rewards can only be withdrawn upon completing the phase 1.5 ETH 2.0 upgrade, scheduled for 2022.
The deposit figures also highlight the impact of the Ethereum price movement which has acted as a critical contributor. Although the second-ranked cryptocurrency has encountered heightened volatility alongside the entire market, Ethereum has managed to make significant gains in 2021, surging over 400% on a year-to-date basis.
The record deposit follows the ongoing upgrades on the Ethereum network that allows investors to lock assets. The deposit contract was launched following the Beacon Chain’s launch in 2020.
The Beacon Chain is a bridge between the current Ethereum network and Ethereum 2.0. Generally, the Beacon Chain aims to help dock the current mainnet onto ETH 2.0 to ensure the network’s complete migration.
The record deposits have also been aided by the emergence of platforms supporting ETH 2.0. For instance, exchanges like Kraken and Coinbase, alongside wallets like MyEtherWallet, facilitate custodial staking for ETH 2.0 by running a validator node on their behalf.
Furthermore, Kraken also enables investors to stake any amount, not just the 32 ETH required by Ethereum 2.0’s guidelines.