Excitement is building over the upcoming Ethereum upgrade and a total of 6.1 million ether have so far been staked on the Ethereum 2.0 network, putting the value of the staked coins to $13.6 billion as of Monday according to Etherscan data. This represents a growth of more than 10 times since the Ethereum 2.0 beacon was launched by Ethereum developers in 2020.
There are now a total of 190,946 deposits made to the ETH 2.0 contract address.
This enthusiasm is likely to propel not only the Ethereum 2.0 network but also the entire crypto staking industry according to JPMorgan, which said that the staking industry could reach $40 billion by 2025 propelled by the growth of staking value in Ethereum.
Ethereum is moving from proof of work to proof of stake mining algorithm, such that people interested in mining will need to put coins into the network to get the right to earn more coins by confirming transactions on the network. However, Ethereum 2.0 comprises interconnected upgrades, most of which are still not completed and being worked on by developers.
One will need to stake a minimum of 32 ether to earn staking rewards by confirming transactions broadcasted on the network and securing the network, simply by running a staking node on their machine or via VPS. This way, a user could earn about 5% APR on any ETH staked on the network and the amount of total reward per user will depend on how much the user has staked on the platform.
Proof of stake form of mining does not require users to expend a lot of energy compared to the proof of work algorithm. This will make it more energy sustainable since it will take lesser computing power and energy to create new coins than it now is.
The upgrade to Ethereum 2.0 will also help improve the speed, efficiency, and scalability of the network. For instance, after upgrading fully to Ethereum 2.0, the network will be capable of handling thousands of transactions per second, hence can be used in faster and extensive applications more cost-effectively.
Currently, however, they still will need to use the same proof of work algorithm until about early 2022.