As Ethereum gets closer to PoW deactivation, more people decide to invest in Ethereum 2.0 deposit contract
- What is Ethereum 2.0?
- Why are people investing more in deposit contracts?
According to Glass knot Chain analysis service, the total value of the deposit in the Ethereum 2.0 deposit contract reached a new ATH of 8.8 million ETH, as the main asset’s retracement is still ongoing.
As the graph suggests, the value of the assets invested in the deposit contract has increased gradually with virtually no rise or fall. In general, traders can see the correlation between the value of funds invested in the contract and the price of Ethereum.
What is Ethereum 2.0?
Ethereum 2.0 is the next version of the well-known Ethereum network. Updating the system is a crucial part of the future of the entire blockchain ecosystem. The main objective of the update is to change the Proof of Work (PoW) validation protocol to Proof of Stake (PoS). Instead of miners confirming transactions, the same role will be transferred to validators who will include the transactions in the block.
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Rewards that were previously received by miners will now go to Ethereum Validators. The change of system will make the network “greener” by reducing the energy required to create new parts.
Why are people investing more in deposit contracts?
As mentioned earlier, the increase in the number of investment funds in the contract correlates with the performance of the Ethereum market. So, we can still see a small period of acceleration whenever the asset enters a corrective phase.
The increase in the investment rate during the correction of the underlying asset can be explained by the desire of investors to preserve funds and neutralize losses by earning interest (staking).