Sign In
Sign Up
DeFinda Logo
Find & Compare DeFi Products
usd logo USD
Home Blog Ethereum networks, Mainnet and Beacon chain merge
Article by Yunis
5 August 2022 (Updated 2 December 2022)

Ethereum foundation announced that Ethereum's long-awaited merge is expected to happen in the second half of September.

Ethereum network's energy consumption will decrease by almost 99%, and the native coin ETH will be deflationary.
Ethereum is in the spotlight!! What is ETH 2.0? logo
  • Ethereum price surged by more than %50 following merge news.
  • Ethereum network is shifting from PoW to PoS.
  • ETH2 will be more eco-friendly network with less energy demand.
  • ETH Options and merge-related altcoins promise good returns.

Ethereum price surged by more than %50 in July 2022. Ethereum's long-awaited merge date is finally set. The Ethereum Foundation announced that the merge might happen in September. Ethereum was facing the blockchain's trilemma for a while. The blockchain trilemma is that a blockchain network can not guarantee three of the essentials; decentralization, security, and scalability. Ethereum Network is decentralized and secure enough, but scalability was always a problem because of high network gas fees. The merge is believed to solve this problem.

Ethereum is the second biggest cryptocurrency with a Proof of Work Network. Ethereum was founded by crypto legends Vitalik Buterin, Charles Hoskinson, and Gavin Wood in 2014 and, since then, and was the major network in web3 developments in crypto. Computing power in the network doesn't only keep the records of the chain but also serves as a host for decentralized applications built as a smart contract on the blockchain.

What is ETH 2.0

Ethereum Network was natively built as a Proof of Work (POW) concept. Participant computing powers in the network constantly confirm blocks to earn rewards. You can read our Proof of Work Coins article to learn more about them.

Ethereum 2.0 is the new version of the Ethereum Network. Ethereum 2.0 is a blockchain network with a Proof of Stake (PoS) concept. You can read our Proof of Stake Coins article to learn more. The transformation from Pow to Pos enables Ethereum to scale for bigger transaction capacity with less energy need. The Ethereum Network consumes as much power as Finland now. The consumption will decrease almost up to 99% after the merge, and Ethereum will become more energy efficient, low carbon print, and green cryptocurrency.

 

ETH 2.0 as a Deflationary Cryptocurrency

Another big plus that the merge brings for Ethereum is deflationary character. Deflationary assets have either limited or decreasing supply that makes their price worth more in the long run. Scarce assets gain value over time. You can read our deflationary cryptocurrencies article to learn more about how you can benefit from deflationary cryptocurrencies in a high inflation environment.

Staking ETH

Ethereum Network with a PoS will enable its holders to benefit from staking their coins. Anyone can become a validator on Ethereum's new network Beacon Chain by holding and depositing at least 32 ETH. Validators are projected to earn between 4 and 10%. Becoming a validator is easy but requires capital. If you don't have such big capital, you can still become a part of a validator by using some platform's staking services and receive rewards depending on their portion.

There are some ETH staking service providers like Lido, Rocket Pool, and Coinbase. Those companies offer individuals to stake their ETH holdings to create a bundle of 32 ETH to become a validator. You don't have to hold 32 ETH. You can have 1 or 2, maybe less than 1 ETH, and stake your ETH coins.

Investing in $ETH options

You can invest in $ETH options without using leverage and facing liquidation risk. ETH options are like stock options, and they are contracts with an expiry date. If you buy an ETH option with a long expiry date, you will probably have a chance to see a break-even point more than once before the expiry date. ETH options are highly liquid assets and can be liquidated anytime. 

Investing in ETH 2.0 Related Altcoins

The platforms that provide staking pools have their native tokens. Those platforms already have invested a considerable amount on ETH2, and those platforms' native token prices are expected to go up as well as ETH. LIDO, RPL, and SWISE are among those native tokens for the platforms that will benefit from the merge.

Important Message Definda does not provide any financial advice. All information is provided for research purposes only. DeFi is a rapidly evolving industry. Most businesses in the sector are very young and it is possible that some of them could go out of business in the future. Such an event could result in the loss of your investment. You should do your own research or consult a financial advisor before investing any money. Please read and satisfy yourself with our terms before continuing to use our website. We offer a free impartial comparison service of savings, loans and other DeFi products. We may receive a small commission from some of the companies listed, but this never influences our rankings. If you spot any errors in the information listed then please contact us at info@definda.com.

Why Compare With Definda?

tick Completely Impartial

We always rank and compare products objectively and impartially.

tick Careful Research

We carefully research products for legitimacy before adding them to the platform.

tick We Never Sell Your Data

We never sell or disclose your data to anyone.

© DeFinda 2022