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Summary of big events in Ethereum

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Take you from DeFi to ETH2.0

Original title: "The Grand Narrative of ETH 2.0 | BlockArk Viewpoint"

Original source: Block Ark Pro

Hongda The meaning of narrative

The famous psychologist Maslow summed up a hierarchy of human needs. Human needs are hierarchical, ranging from physiological needs, to safety needs, to social needs, to esteem needs, to self-actualization.

Everyone has the potential impulse to surpass themselves and achieve self-realization. It can be said that the ultimate goal of life is to pursue self-realization. All physiological needs, safety needs, social needs, and respect needs are all prepared for the highest goal of self-realization.

But it is very difficult to achieve self-realization. The vast majority of people in this world are doomed to be mediocre or ordinary people, and there is no possibility of self-realization. Therefore, there is a need for a grand narrative. Investing in grand narratives can satisfy people's need for self-actualization.

The same is true for the grand narrative of the capital market. And in the tedious investment career, it is even more comforting to have an inspiring grand narrative. You only need to immerse yourself in the story with everyone to get the achievement satisfaction of wealth and investment.

In the traditional capital market, Jia Yueting in A shares and Musk in US stocks It is a typical case of the two grand narratives. They both gave shareholders and currency prices a very large stimulus in a certain period of time. The difference is that one has no realization ability and the other has realization ability. Musk, a man who changed the electric car industry, privately formed a company to launch a rocket, and started a Mars colonization plan. Compared with Xiaopeng Motors and Weilai, Tesla's temperament is suddenly sexy and charming. Of course, the stock price is even sexier.

Well-known projects in the blockchain field still follow such rules.

BTC——digital gold

LTC——digital silver

FIL——a new generation of interstellar storage network

DOT/ATOM——web3.0/cross-chain duo< /p>

EOS—Blockchain 3.0

EOS, a strong competitor of ETH, the "real ETH 2.0" appointed by Vitalik, although it seems a bit ironic now, but this slogan had a lot of supporters back then.

And what is the grand narrative of ETH 2.0?

DeFi speculative wave review

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COMP's listing in June kicked off a huge wave of speculation in DeFi, and this activity lasted for nearly three months. It coincides with the retreat of the DeFi frenzy of speculation. Review the past to learn the new, let us review it. It can be said that in the wave of DeFi speculation and the previous wave of Dapp speculation in 2018 (mainly ETH/EOS/TRON), the public chains have proved with their strength and hard work that there are only competitors of ETH and ETH in the public chain sector We have 2 categories. A large amount of data is constantly supporting this fact to us.

COMP’s listing in June kicked off a huge wave of speculation in DeFi, which lasted for nearly three months. It coincides with the retreat of the DeFi frenzy of speculation. Review the past to learn the new, let us review it. It can be said that in the wave of DeFi speculation and the previous wave of Dapp speculation in 2018 (mainly ETH/EOS/TRON), the public chains have proved with their strength and hard work that there are only competitors of ETH and ETH in the public chain sector We have 2 categories. A large amount of data is constantly supporting this fact to us.

Dapp.review: public chain transaction volume 7-day statistics

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In terms of transaction volume, compared with ETH, the transaction volume of all other public chains is almost compressed into a horizon.

Justswap liquidity and trading volume (weekly)

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Even TRON, the public chain with the best performance except ETH in this round of DeFi, still has not escaped the fact of a sharp decline.

In contrast to ETH, the core application on it has precipitated user group. From the data, the DeFi lock-up amount of ETH has not decreased on a large scale as the speculative wave subsided.

Defipulse: Uniswap lockup amount

Defipulse: Compound Lockup Amount

Whether it is the head of the DEX application Uniswap, or the head of the loan With the application of Compound, the lock-up data is still rising steadily.

Uniswap.info: transaction volume (weekly)

*The third last red bar Abnormal transactions caused by the Harvest hacker attack

From the perspective of transaction volume, despite a significant attenuation, Uniswap is still Maintain a platform that far exceeds that before August 2020, and is accompanied by a continuous increase in the locked amount.

Uniswap has shown the same resilience as BTC. Silt" makes them better growing soil.

For the cryptocurrency market, DeFi speculation has ebbed, but DeFi has not ebbed, and ETH has not ebbed. History has proven that ETH has won. Blockchains such as Thunder and Algorand, which only have the advantage of being fast, are no longer sexy.

The Grand Narrative of ETH 2.0

For ETH, the only competitor now is itself. How to better meet the needs of the encrypted public is the top priority. A rather ironic fact about encryption culture: the core of the encryption world is currently a centralized exchange that does not use crypto at all. Exchanges are de facto centers of crypto power.

Then all this is quietly changing. Dapp and DeFi have given the encrypted masses the best preview of blockchain life, and opened up our vision. It turns out that using a wallet can carry out various operations such as transactions and loans while retaining the control of your own assets.

ETH is already standing at the door of the crypto center, ready to break in up.

Before it are two shackles of oneself: unable to cross chains and low throughput.

Currently there is no systematic solution like DOT for cross-chain , but cross-chain bridge solutions like REN are not unavailable. After all, in the absence of revolutionary progress in other public chains, the strong user inertia makes ETH still the center of the Matthew effect.

Coingecko: market capitalization Ranking

Wrapped will be accepted as a trusted asset. WBTC has been able to occupy the top 15 positions in the market value, and Wrapped of other currencies is not difficult to achieve technically. In the third quarter, we also saw that currencies on other public chains such as TPT and FNX migrated to ETH in a centralized manner.

As for the speed limit. This limitation of ETH has made EOS and TRX, as higher-performance public chains (more centralized than ETH), gain more momentum when transaction mining Dapps rise. At the same time, products such as derivatives that rely on high-speed liquidation have not been popular on ETH.

Order book-style DEXs such as EtherDelta and IDEX have always been relatively niche among exchanges. The rise of Uniswap in this round has benefited from the alternative breakthrough of the AMM method.

Coingecko: spot CEX trading volume ranking

Coingecko: DEX trading volume ranking

Uniswap trading volume At present, it can reach 5.9% of Binance. However, there are generally centralized exchanges with brushing behavior. If we compare Coinbase without brushing, the proportion can reach 35%. In Coingecko's ranking, Uniswap's trading volume ranks 11th, excluding the exchanges that we know have obvious turnover.

In other words, after Uniswap, there is no second-tier exchange. And after ETH 2.0, it may be that there is no first-line centralized exchange after XXswap. With the current performance of ETH, Uniswap can even enter the historical arena as a challenger of first-line exchanges, let alone the expectations brought by the high performance of ETH 2.0. It can be said that when ETH 2.0 matures, the world's largest cryptocurrency exchange can only be a DEX.

Yesterday’s MTgox, today’s Okex. (Okex founder Xu Mingxing was investigated by the police for allegedly assisting money laundering, which paralyzed Okex asset withdrawals.) DEX and CEX are equal to hackers. But CEX can never give DEX real control over the assets that can be given to users.

The grand narrative of ETH 2.0 is that ETH is the blockchain. It will have a huge siphon in the crypto world outside of ETH. All public chains that cannot keep up with the rhythm will be siphoned by ETH, and all exchange tokens that cannot keep up with the rhythm will be siphoned by ETH. A high-performance public chain will give birth to more applications, and these applications will solidify the foundation of ETH. It can be said that ETH 2.0 represents that apart from BTC, I am the only one in heaven and earth.

Three phases of ETH 2.0 and low inflation

Ethereum 2.0, also known as Serenity, is the next major upgrade to the Ethereum blockchain.

Ethereum 2.0 is planned to be launched in at least three phases: phase 0, 1 and 2. Phase 0 is scheduled to launch in 2020, and Phases 1 and 2 will be released in the next few years.

Phase 0: Start the Beacon chain

Phase 0 is focused on getting validators on the Beacon chain up and running. Users can deposit 32 BETH (BeaconETH) on the chain to become a validator, but at this stage the validator only manages the Beacon chain, and there is no shard chain at this time.

Beacon chain will keep as simple and iterative design as possible in the early stage, the The stage does not support accounts, asset transfers, and smart contracts. BETH can only be used by verifiers, and cannot be transferred on the chain, nor can it be transferred to exchanges.

Beacon chain is a brand-new PoS blockchain, it is ether The core component of Fang 2.0, ETH 2.0 also includes three parts: shard chain and virtual machine layer.

The original ETH 1.0 will become one of the shards of ETH 2.0. And because there are two chains, there will be two tokens, ETH and BETH, during the operation process.

Phase 1: Start Shard Chain

Phase 1 will add shard chain components to realize Beacon chain + shard chain. But this stage is just a trial run of the sharding structure, not real expansion with sharding. The Beacon chain regards the block of the sharding chain as a simple collection of bits without structure or meaning. The shard chain still has no accounts, assets and smart contracts at this time.

Beacon chain will support 1024 shard chains, each chain There is a set of 128 validators that form a committee to validate. The Beacon chain randomly selects a shard verifier for each shard in each cycle, and the shard verifier proves the content and status of the shard through "cross-linking".

It needs to be pointed out that in phase 0 and phase 1, Ethereum 1.0 and There is no data circulation between Ethereum 2.0, and Ethereum still runs on the PoW chain.

Phase 2: Start the virtual machine layer

Phase 2 will add the virtual machine layer, which is the last important component of Ethereum 2.0. The Ethereum that implements the Beacon chain + shard chain + virtual machine layer is a complete public chain system that we are familiar with. The availability of Ethereum 2.0 will be officially realized at this stage.

At this point, smart contracts are introduced into the system, and assets can also be Free transfer on the Internet; the shard chain has changed from a simple data marker to a fully functional blockchain, and the cross-link operation supports cross-shard communication; some of the most commonly used development tools may also be ported to Ethereum 2.0 to support EVM2 . EVM2 is Ethereum's new virtual machine eWASM, which is based on Web Assembly and supports multiple programming languages to implement smart contracts.

Not to mention stage 2, even stage 1 takes time 1-2 years, which means that the current launch of ETH 2.0 is still a long way from the real application, which means that even if ETH 2.0 has a climax before December, it is only a climax of speculation. Don't expect too much from ETH 2.0 in the short term. At the same time, this also means that before the real 2.0 arrives, the contradiction between ETH's current low operating speed and more and more applications makes layer2 a direction worthy of attention.

Let us make a summary, the core upgrade of ETH 2.0 is POS+ Fragmentation, both of which exist to improve the scalability and throughput of ETH.

ETH 2.0 launch progress

Ethereum 2.0 is scheduled to be officially released on December 1, and the creation time is scheduled for January 3, 2021, which is the 12th anniversary of the birth of the Bitcoin network. A pledge of 524,288ETH is required to start.

ETH 2.0 launch progress can be checked in real time on this website

https://launchpad. e th e r e um.org/

The current progress is about 9.6%. This progress has been advancing, but there is a high probability that the start conditions will not be met on December 1st.

When the pledge start condition of 524,288ETH is reached, the rate of return is 21.6 %, you can continue to mortgage at this time. When it reaches 10M ETH, the rate of return is 4.9%, which means that the final inflation rate is about 0.43%. That’s not high, and the collateralization ratio at this point is around 8.8%. The inflation rate of ETH based on PoW is about 11.20% per year.

It is well known in the crypto community that Bitcoin currently has an inflation rate of approximately 1.8%, which is better than the inflation rate of a basket of global fiat currencies, which is about 2.99%. That is, when ETH 2.0 starts, the inflation rate of ETH will be better than that of BTC .

And with the introduction of ETH 2.0 proposal EIP 1559, large transaction fees will be burned instead of being paid directly to miners. This means that if more transaction fees are burned than new ETH is issued, the net inflation rate could even be negative

ETH miners capture all fees associated with transactions on the Ethereum network. Over the past year, miners have earned around 259,823 ETH ($59.7 million) in fees. However, the huge excess income of miners does not help the ETH network itself too much.

It can be seen that the characteristic of scarcity will change in ETH 2.0 more prominently. As we all know, the 21 million bitcoins will never be issued, and it has always been talked about, and has been plagiarized as quotations by various project parties. The deflationary ETH is obviously larger in the imagination of a single value.

ETH 2.0 Participation Guide

The threshold for building an ETH node is not high. Hold 32 ETH, and follow the official guidelines and hardware standards to build it. There are three ways to participate

build by yourself

It is not recommended for retail investors to participate, you have to make sure your node is always online, because there will be a margin penalty if you continue to be offline.

If you want to build your own, you can refer to the following articles.

https://www .< a href="https://www.chainnews.com/articles/602578542483.htm" target="_blank" rel="noopener noreferrer nofollow">chainnews.com/articles/60 2578542483.htm

Trading platform

In the past 2 years, centralized Stake solutions like Binance (Earn Bibao) have been very Mature and facing full competition. Ordinary users do not need to adopt self-built solutions at all.

Of course, the innovative power of mainstream trading platforms is not as fast as that of small exchanges , so the rollout may be slower. Small exchanges will launch products faster, but retail investors are not recommended to participate. Because second-tier exchanges face a more difficult competitive environment after DEX becomes more mature.

On-chain service provider

For example, Ankr, Blox, Rocket Protocol, etc. provide non-custodial "one-click staking" methods, and all provide "single pool" services to satisfy users who do not have enough 32ETH. For example, Ankr and Rocket Protocol will also provide bonded ETH to ensure that the pledged ETH can still be circulated in the market, which also eliminates the fear of most players about the loss of pledge liquidity.

It is worth mentioning. At present, the process of ETH of Ethereum 1.0 entering the 2.0 deposit contract is one-way, and it is impossible to go back and forth at this stage. According to the official documentation, after the first stage of Ethereum 2.0, verifiers may transfer funds, and after the second stage, verifiers can extract this part of assets to a specific shard. The entire development process may require 2 years.

And this may become a window period for speculation. During this window period, part of ETH has become BETH and locked up, but more and more applications of ETH still use ETH, which will make the real circulation of ETH less and less.

There is not much time left for other public chains, no matter you Yes or no, ETH 2.0 is on the way.

Summary

As mentioned at the beginning, investing in a grand narrative can satisfy people’s needs for self-realization. We know that this is not everyone's pursuit, so you can also directly read the conclusions about ETH 2.0:

1. The grand narrative of ETH 2.0 is that ETH Block chain

2. ETH 2.0 is a one-way channel, which will reduce short-term circulation and provide room for speculation.

3. Investing in second-tier exchanges has a very poor profit-loss ratio.

4. Investing in a public chain without a unique selling point has a very poor profit-loss ratio.

5. ETH 2.0 is still in the hype period. The realization of the real ETH 2.0 will take a long period. Before that, Layer is a direction worthy of attention. One piece of project has Near/Skale.

6. On-chain service providers include Ankr, Blox, and RPL (issued coins), and there is a very obvious linkage when ETH rises on November 5. But please note that their real Staking service is not launched so soon.