Ethereum 2.0 Is Here – What Changed?

On Thursday, Ethereum, the second-largest cryptocurrency by volume and the most popular altcoin, concluded its long-awaited merge. So, what changed?

The much-discussed merge reflects (without getting too technical) the union of Ethereum’s current execution layer (the Mainnet) with its new proof-of-stake consensus layer, the Beacon Chain. It does away with the necessity for energy-intensive mining to secure the network using staked ETH. As a result, a more scalable and sustainable Ethereum network should develop in the future.

While the most well-known cryptocurrency, Bitcoin, is seen as a false story that consumes massive quantities of power, the merger will allow Ethereum to become green.

Sustainability

Following the transition from proof-of-work (PoW) to proof-of-stake, Ethereum’s energy usage will be lowered by around 99.95%. (PoS). Following the merger, Ethereum will produce much less carbon.

This indicates that the improvement should increase network adoption and growth while also benefiting the environment. Furthermore, since businesses won’t have to worry about following environmental and energy laws, they can build on the Ethereum network more confidently and quickly.

Yield

After the integration, staking Ethereum will return 4% to 6% annually. The proof-of-stake mechanism encourages honest validators while punishing dishonest validators and their delegators.

Ethereum smart contracts give a return in $ETH for utilizing the Ethereum protocol.

This may seem easy, but it signifies the first “internet bond”. Ethereum is the most extensive decentralized network that allows ownable smart contracts. The consequence is the creation of digital ownership over a network that produces yield.

This digital bond should attract institutional investors, family offices, and enterprises. All these investors with cash reserves have seen their reserves decrease over the last year. In addition, government bonds have almost negative yields, so investors have to hold on to their money and deal with inflation.

After the merger, these parties may invest some of their reserves in the world’s fastest-growing, sustainable technical asset.

This yield-generating asset will boost adoption. Ethereum is simpler to retain on the balance sheet than gold. The cost and difficulty of keeping them safe and the inability to receive income on actual gold made gold less desirable as a treasury asset, forcing firms to hunt for government bonds.

Now that inflation exceeds government bond rates, people with cash reserves may invest in Ethereum.

So, to conclude,

Ethereum 2.0 is finally here! Let us now observe how the merger would result in a boom phase for Ethereum as a result of various breakthroughs, decentralized applications, and use cases. The nicest aspect of the advancement is that everyone may own a portion of it, which was not previously feasible with the internet.