Ethereum 2.0 (“Serenity”) is a considerable upgrade to the Ethereum network, which will increase the speed, performance and scalability of a decentralized network. These upgrades will take Ethereum to a new level as it can now significantly increase its number of transactions, reduce congestion and capitalize on the cost of the Ethereum network.
After reaching the final phase, called Phase 2 or 2.0, Ethereum will achieve its goal of becoming a crystal-clear open network for the decentralized finance (DeFi) industry.
Let’s take a look at a detailed roadmap for this update, including the expected economic changes with the launch of the new ETH 2.0 tokens.
Key Features of Ethereum 2.0
For Ethereum, sharding will reduce network congestion and increase transactions per second by creating new chains, known as “shards.” Ethereum will be divided into 18 shards that will work simultaneously to increase efficiency.
Ethereum will switch to ProofOfStake Consensus; this is a much more energy-efficient decentralized network, which maintains the trading methods.
Stages of Ethereum 2.0
Stage 0 – Beacon Chain
Stage 0 began with the authorized launch of Beacon Chain. The Beacon Chain is the coordination mechanism of the new network, responsible for creating new blocks, making sure those new blocks are valid and rewarding validators with ETH for keeping the network secure. The goal of stage 0 was to validate and randomize a block of segments in this chain. With the launch of Phase 0, a new ETH2 token appeared and Ethereum users were able to convert to ETH2 (1: 1 ratio) through a registration agreement, which effectively burns the ETH you used to store.
The crypto community was able to put 32 ETH2 on the validator nodes in that stage. Validators are node operators who each store a copy of the blockchain and must perform certain functions to keep the system secure. There are already more than 90,000 active validators, and only three months after the launch of Beacon Chain, there are thousands more on the waiting list preparing to join the Ethereum network. However, currently, only 900 validators are accepted every day to participate in the Ethereum staking program.
Stage 1 – The Chain of Shards
Stage 1 allows Ethereum to be scaled enormously with shards. The network divides into 64 fragments running simultaneously, i.e. all of them process transactions and calculations. Stage 1 also allows the traders to connect on decentralized networks via links.
Stage 2 – ETH 2.0 – Execution Engine
Phase 2 will lead to the final shape of Ethereum 2.0. At this point, the existing network of Ethereum will be interlinked. From this point on, ETH will be linked to ETH 2.0 and a new era will begin for Ethereum.
Will ETH 2.0 affect the price of Ethereum?
Many have speculated that there could be a variation in Ethereum price after updating Ethereum to the 2.0 version. This is mainly because Ethereum and its decentralized financial network will become much more practical for the average person, who may not have lots of funds at their disposal.
Ethereum trading prices are likely to drop to the point where users can move smaller amounts. Right now, only those with more funds are likely to deal with large transactions and the modern crypto banking system.
Of course, everything depends on the success of Ethereum 2.0.
Why Does It Matter?
Ethereum 2.0, which is the product of more than five years of development, is a very ambitious project. The update, with all its complexities, is likely to take many years to complete. However, Ethereum developers suggest that the biggest obstacle and arguably the most important milestone in the Ethereum 2.0 roadmap was its first launch.