Ethereum up 2.5%, what’s going on?

Last Updated: 23 August 2022

Every little bit helps. Ethereum’s price is up 2.5% today after a brutal week in which the cryptocurrency had to lose 12%. Time to take a look at the current state of the network and where ETH stands ahead of ETH 2.0, scheduled for September 15.

Ethereum price above 1600 euro again

At the time of writing, the price of Ethereum has risen by 2% and is now trading at 1635 euros. This is a welcome boost after the price was dragged down by the malaise of the crypto market last week. Despite the decline, Ethereum has doubled in value since its low point in mid-July.

This doubling is because the whole world has been waiting for years for Ethereum to move from proof of work to proof of stake. This transition is called The Merge and will mark the beginning of Ethereum 2.0. This can safely be called the most important event of the year in the crypto-ecosystem.

Ethereum strike since December 2020

Meanwhile, September 15 has been confirmed by Vitalik Buterin, the founder of Ethereum, as the date for the final transition. But actually, the transition unofficially began back in December of 2020.

That’s when the beacon chain was released, which is an Ethereum blockchain that runs entirely on proof of stake. On the beacon chain, users have been able to deposit ethers to stake since launch. At the same time, the normal blockchain of Ethereum was running parallel to the beacon chain. All activities such as transactions, defi, apps, and games still run on the normal blockchain.

On September 15, these blockchains will be merged or merged, hence the name The Merge.

Strikers are rewarded in ether

So far, more than 13 million ethers have been deposited on the ETH 2.0 deposit contract addresses of the beacon chain. Users do not do this lightly, they receive interest on it, and if you have a stake in the network you can vote on the direction of Ethereum.

The interest rate for Ethereum strikes is variable and changes based on the total amount of ETH wagered, with a maximum annual reward rate of 18.10%. Currently, that rate is 11.17%.

So far this month, 53,000 new ethers have been added for strike, with around 36,000 ETH being added to the deposit each week. The graph below comes from OKlink and shows the steady growth in the number of ETH.

Minimum 32 ether needed for strike

With the transition to proof of stake, transactions are verified by nodes, and added to existing blocks on the network. To become a node, users need to deposit at least 32 ethers at a strike address to activate the node software.

If you don’t have 32 ethers, you can always join a pool, a group that collectively deposits ethers on the beacon chain.

So far this month, the number of transactions depositing the required 32 ETH at the ETH 2.0 deposit address has grown, according to data from Glassnode. Indeed, 114 new deposit contract addresses were registered on 21 August. In total, there are now 5,083 addresses on the beacon chain.

But it is not all hosanna, if we zoom out, we see a decrease. Since March of this year, the weekly number of ethers deposited has been declining.

  • Steven Gray

    Steven Gray is an experienced cryptocurrency and blockchain journalist with over 7 years of reporting on the crypto industry across major publications. His proficiency in technical analysis provides him the skills to evaluate complex trading algorithms and AI systems. Steven leverages his extensive network of academics and finance professionals to incorporate expert opinions into his unbiased analyses.

    Known for his engaging yet objective writing style, Steven keeps readers informed without hype. His rare blend of crypto domain knowledge, trading acumen, impartiality, and communication skills makes him an ideal author for in-depth reviews of innovations across the cryptocurrency and financial technology sectors.

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