December 2020 marked the launch day of Ethereum 2.0 the Proof of Stake(POS) Beacon Chain. It is the long awaited upgrade that will be a game-changer for Ethereum. It will help solve issues of network scalability, security and stability. Is is also the upgrade that will mark the end of the Ethereum’s current Proof-of-Work (POW) mechanism. This upgrade will be rolled-out over time in multiple phases. Many Ethereum investors and cryptocurrency enthusiasts are waiting impatiently for the day to come when it is finally done.
According to EthHub “to launch the POS chain there is a 16,384 validator count requirement. While for the final phase where all shards crosslink (learn each other’s state) on every slot, for 64 shards that would be 262,144 validators and 8,388,608 total ETH staked.” https://docs.ethhub.io/ethereum-roadmap/ethereum-2.0/eth-2.0-economics/
As of today, March 27th 2022, over 10.36M Ether (ETH) or 32.8B USD is locked in the ETH 2.0 stacking smart contract spread across 323K validators; data from ethscan.org(https://ethscan.org/charts).
This is no doubt a massive over-achievement which demonstrates a huge interest and trust from the investors and community as a whole. Now, this is definitely a no small amount locked up money that is waiting for the day when it can be accessed ! And we have to keep in mind that this amount keeps only on growing !
The potential danger lies in the fact that the moment people finally gain access to their locked up ETH they will be keen to take the profits. This will no doubt send a massive downward selling pressure and cause a sharp drop in the price. Please don’t get me wrong, not everyone will sell all their staked ETH, but profit taking will surely take place.
If you wonder when will the ETH2.0 be unlocked and floodgates unleashed ? Well at the moment there is no precise date. However based on the current communication from the ETH dev team they are planning to merge the Proof-of Work (POW) and Proof-of-Stake (POS) chains in Q2 2022. Then they will wait for another 6 months before they unlock the staked ETH. This gives us a rough estimate of end of 2022 and beginning of 2023.
To conclude, I would like to caution anyone who has been holding ETH about a potential sharp drop price of Ethereum. Please do your own research on this matter and decide for yourself the best course of action.
