On June 30, Ethereum developers delayed the network’s difficulty bomb via the Gray Glacier update, which means The Merge won’t happen at least until September 2022. Meanwhile, there’s now more than 13 million ethereum locked into the Beacon Chain worth $15.8 billion using today’s prices.
Over 13 Million Ethers Worth $15.8 Billion Deposited in Ethereum 2.0 Contract
This week, the ETH 2.0 contract saw a total of over 13 million ETH deposited and there are now 406,640 validators. Over time, the Ethereum (ETH) blockchain is expected to transition to a proof-of-stake (PoS) chain. Currently, the network has a hybrid proof-of-work (PoW) system for the main chain and PoS for the Beacon chain. At the time of writing, the 13,012,469 ethers locked up in the ETH 2.0 contract are worth over $15.8 billion using current ETH exchange rates.
The 13 million in ETH stems from 76,506 depositor addresses and the aggregate represents 10.88% of the entire ETH supply today, according to Dune Analytics statistics. 31.73% of the share is staked via the liquid staking application Lido. Besides Lido, other large staking services include companies like Kraken, Staked.us, Stakefish, Bitcoin Suisse, and Figment. While many thought the PoS transition, otherwise known as The Merge, would possibly happen in August, the difficulty bomb update has pushed The Merge further away.
Ethereum developers aim to avoid network degradation due to premature difficulty bomb activation
On June 30, the Ethereum network was updated to Gray Glacier at a block height of 15,050,000, pushing the difficulty bomb back by 100 days. “The Gray Glacier network upgrade changes the Ice Age/Difficulty Bomb settings, pushing it back by 700,000 blocks, or roughly 100 days,” Ethereum developer Tim Beiko revealed on June 16, 2022.” With Ropsten now moving to proof-of-stake, the difficulty bomb only affects the Ethereum mainnet, meaning Gray Glacier will not be deployed to any testnet,” he added.
In addition to the delay, Ethereum network fees have remained low and at the time of writing, the average network fee is 0.0018 ETH or $2.16 per transaction. Today, a median-sized Ethereum network fee is 0.00078 ETH or $0.955 per data transfer. Furthermore, since August 5, 2021, or since the implementation of EIP 1559, approximately 2,523,831 ETH worth $8.4 billion has been destroyed.
Essentially, the difficulty bomb is a “planned exponential increase in the proof-of-work difficulty setting designed to incentivize the transition to proof-of-stake, thereby reducing the chances of a fork.” The EIP 5133 notes explain that the motivation behind the delay is “to avoid network degradation due to premature activation of the difficulty bomb”.
