The upcoming “ETH 2.0”. How will it affect us—-Opportunity is always reserved for the prepared
After much delay, the exact release date for the Ethereum merge upgrade seems to be near.
The migration of ETH from Proof-of-Work (Pow) to Proof-of-Stake (PoS), also known as “merging,” is expected to arrive on September 19, 2022. This new date has been confirmed by Ethereum developer Tim Beiko. Tim estimated on the conference call that it might be September, but that time could change.
What is Ethereum 2.0?
The first version of Ethereum went live in 2015. Ethereum 2.0. ETH2 (aka Serenity) is an upgraded version of ETH. The main difference between the two versions is that ETH 2.0 uses different mechanisms, proof-of-stake, sharding, and second-layer solutions. The transition to ETH 2.0 is a very complex technical endeavor that requires time and rigorous testing.
ETH 2.0 is a multi-phase transition of the Ethereum network from a Proof of Work (PoW) to a Proof of Stake (PoS) consensus mechanism. Just as PoW blockchains rely on miners to verify transactions, the PoS consensus mechanism relies on “pledgers” to verify transactions by running nodes.
What is the future of Ethereum 2.0?
■ Increase staking income
■ Increased development activity on Ethereum (Dapp)
■ Lower carbon footprint
■ Reduced ETH supply
ETH price is up 36% in the past 30 days and 114% since its June low of $882.
Coupled with the L2 solution, Ethereum gas fees should also drop significantly and throughput should increase. Therefore, the demand for ETH will increase while the supply will decrease. This is bound to drive the price of ETH higher. Our forecast growth rate will be 2x or more.
Who will benefit?
- Investors who hold enough ETH.
- Higher staking yields will drive revenue growth for staking providers such as LIDO, MineXcoin, Curve, etc.
- Stakers and validators will receive higher APR.
- Increased users should benefit L2 providers such as Optimism, MineXcoin, Aztec Network.
Why is it difficult for retail investors to join?
After the upgrade of Ethereum 2.0, it is necessary to pledge ETH to participate in PoS mining, that is, staking. In short, we can get a certain amount of interest by staking ETH that has not been used for a long time for PoS.
However, the staking rules of Ethereum 2.0 emphasize decentralization, which brings certain barriers to entry for ordinary pledgers, as follows:
- At least 32 ETHs are required and can only be pledged in multiples of 32;
- The pledge cannot be delegated to other validators;
- Currently, ETH cannot be withdrawn from the beacon chain, even after the withdrawal is enabled, the unlock period is 27 hours;
- The current reward depends on the amount of ETH pledged on the network. The more ETH, the lower the income from the pledge ratio.
What can MineXcoin bring to our clients in the era of Ethereum 2.0?
Therefore, in order to provide users with a more convenient staking environment for participation. MXN bypasses the 32 ETH minimum requirement by pooling ETH together, and does not require each user to operate their own validator, the staking pool will handle the corresponding operations.
The staking pool will hold ETH reserves to meet the withdrawal needs of users, similar to a bank. And it can also provide users with corresponding pledge certificates to participate in other DeFi applications and improve capital utilization.
MineXcoin business mechanism
After MineXcoin collects the user’s ETH and stakes 32 ETH each time on an Ethereum smart contract, MineXcoin selects a new validator from a registry controlled by governance. The deposit contract is then called, 32 ETH is allocated to this validator, and the MineXcoin’s withdrawal certificate is generated.
The Ethereum 2.0 staking service provided by MineXcoin can solve three problems:
- Free ETH for pledge, no need for 32 (Ethereum 2.0 requires at least 32), and the income is not affected by the quantity;
- There is no need to build nodes, and MineXcoin will screen a batch of high-quality nodes to reduce the probability of users’ income being confiscated;
- ETH pledged in Ethereum 2.0 cannot flow and participate in value-added services, but generating xETH through MineXcoin can participate in the Defi ecosystem.
In MineXcoin, xETH holders can only get 90% of the Ethereum 2.0 pledge reward, and the rest needs to be allocated to MineXcoin’s node operators and vaults. The overall operating structure is as follows:
xETH represents a tokenized pledge deposit, xETH tokens can be held, traded, or sold, and the pledger’s xETH balance is based on the total amount of pledged ETH plus the total pledge reward, minus service fees. So the amount of xeth tokens is based on the amount of ETH stored in MineXcoin, and the associated total reward and minus penalties.
The specific implementation in the MineXcoin app
- MineXcoin customers need to purchase ETH products in the APP, and after the purchase, the equivalent is exchanged for ETH, and the pledge is in ETH2.0.
- MineXcoin generates the token xETH. The token ratio is based on the customer’s pledge time. The longer the pledge time, the higher the exchange ratio.
- Tokens are displayed in the customer APP in the form of vouchers.
- Tokens can be used to purchase BTC products in the APP to form secondary income.
The specific form is as follows:
MineXcoin’s technical team has made this feature on the APP. We will help customers simplify the investment process, set different investment amounts, investment time, and meet the diverse needs of customers as much as possible.
We expect to launch an Ethereum 2.0 product as soon as September.
Basic products will be set up in the early stage to facilitate customers to understand Ethereum 2.0 and the token mechanism. Our initial idea was to set up a basic product with a low amount and a short period of time. Because the amount is low and the time is short, the staking reward can only reach 40%-60%. In the later stage, as the market matures and customers’ awareness deepens, we will provide better pledge services, with a reward mechanism of up to 90%.
MineXcoin currently only runs BTC mining machines online. I believe that ETH 2.0 will also serve our customers in the near future.
MineXcoin has always been committed to making our customers simpler, safer and more rewarding. The arrival of Ethereum 2.0 has given the ETH currency price twice the growth space in the next year. The pledged token finance will undoubtedly give us more room for imagination. There will always be opportunities, but only for those who are prepared.
Are you ready?