Ethereum 2.0 Countdown Begins With Release of Deposit Contract

Ethereum 2.0’s deposit contract is now live, heralding the imminent unveiling of the “world computer’s” second act.

Released at 15:00 UTC, according to developer Afri Schoedon, the deposit contract is the first physical implementation of Eth 2.0 for everyday users. The deposit contract acts as a bridge between the forthcoming proof-of-stake (PoS) blockchain and the current proof-of-work (PoW) mainchain, valued at some $40 billion by market capitalization. 

The genesis time for Eth 2.0 was first set for Jan. 3, the 12th anniversary of the launch of the Bitcoin network. The date has been moved, the GitHub file shows, to Dec. 1. After publication of this article, the deposit contract file was confirmed by an Ethereum Foundation blog.

“We’re all excited,” Ethereum 2.0 researcher Danny Ryan told CoinDesk in an October email. “This has been a long time coming, and countless researchers, engineers, and community members have put blood, sweat, and tears into this project. Feels good to finally bootstrap Ethereum’s long-awaited proof-of-stake consensus.” 

On a practical level, Ethereum stakers can now begin depositing the 32 ether (ETH) required to stake on Eth 2.0. Once 16,384 validators have deposited funds equivalent to a total of 524,288 ETH into the contract, the Beacon chain – the spine of Ethereum 2.0’s multiple blockchain design – will kick into action in what is called the “genesis” event of Ethereum 2.0. That event is expected within the next few weeks.

Stakers will begin earning inflation rewards after the genesis event by placing their ether as collateral on Eth 2.0. Staking rewards are reasonably high compared to other investments coming in between 8%–15% annually. And that’s for a good reason: Not only is there software risk, but the deposit contract to Eth 2.0 is a one-way bridge – at least for now.

Ethereum 2.0’s deposit contract launch: The next stage

On a larger level, the deposit contract and soon-to-launch Beacon chain represent a critical step toward a future that Ethereum co-founder Vitalik Buterin foresaw some seven years ago: the creation of and need for a generalized, Turing-complete blockchain.

That vision has rolled out in stages, not to mention fits and starts. Buterin and other developers executed a four-part release of Eth 2.0: Frontier, Homestead, Metropolis and Serenity. 

Each successive phase added new features for the current mainchain and future PoS blockchain through what are called hard forks, or backwards-incompatible code alterations. 

For example, the latest Istanbul hard fork in January 2020 created a bridge for the Eth1.x blockchain to speak with equihash-based blockchains such as Zcash.

Serenity, the more formal name for Eth 2.0, is the most ambitious and contentious of the four hard forks. In fact, it’s being tackled in multiple parts: Phase 0 with the Beacon chain, phase 1 with sharding, Phase 1.5 with scaling improvements; and, if necessary, a final phase 2 (Although the latter two phases have yet to be entirely worked out).

Developers have conducted limited dry runs of phase 0 over the last year with single-client and multi-client testnets in an effort to nail the final launch, venture studio ConsenSys CEO Joe Lubin told CoinDesk in an email. The final testnet, Medalla, launched in September and has remained relatively stable.

“We’ve hardened Ethereum 2.0 as much as we can with simulated test environments, formal verifications, and audits. We are incredibly excited to see the community galvanize around the first phase of Eth2, now with real value at stake,” Lubin said.

But now all eyes rest on the mainnet deposit contract and Beacon chain, ConsenSys Eth 2.0 developer Ben Edgington told CoinDesk in a message.

“Deployment of the deposit contract is the point of no return for Eth2. We have no choice now but to see this thing through right to the end. After 2.5 years working on this, I am incredibly excited about where we are, and what’s yet to come,” Edgington said.