In an interesting analysis this morning, Prashant Jha at Cointelegraph is describing how the largest single Ethereum contract, held on a Beacon Chain sidechain, seems to be in limbo preceding a move to join it with the mainnet.
“The contract in question is an Ethereum 2.0 Beacon Chain staking contract launched in November 2020, and it cannot be spent without a hard fork,” Jha writes. “What makes this even more astonishing is the fact that the terms of the hard fork are yet to be decided, and people sending their ETH into the contract were well aware of the fact. The terms of the hard fork could be decided once the Beacon Chain merges with the Ethereum mainnet.”
The size of the contract, Jha says, is $33.5 billion, which will be unlocked with the mainnet merger which is supposed to happen the first half of this year.
But, as he points out, “supposed to” is not a guarantee.
The goal is a proof of stake mechanism for a new and improved ETH chain.
The Altair project in 2021 ‘tested the limits’ of this type of system, with a proposed merger this year.
“The Ethereum Beacon Chain was launched in December 2020 and ran parallel to the Ethereum Mainnet,” wrote an anonymous analyst at Huobi Learn in October of 2021. “The plan was to have the two chains merge in 2022 so that the Beacon Chain’s proof-of-stake mechanism and the Mainnet’s ability to handle smart contracts would form Eth2. Two major changes in the Altair upgrade are the introduction of support for light clients and what Ethereum developer Tim Beiko calls “inactivity+slashing penalties”. Light clients are nodes that are less cumbersome than full node software. Developers will now be able to introduce light client software to validate blocks on the Ethereum Beacon Chain.”
The workings of this elaborate cryptosystem are pretty inscrutable to anyone without a detailed knowledge of ETH itself.
It has to do with scaling horizontally with shards, shuffling validators, assessing attester rewards and penalties, and more of that fun stuff.
Suffice it to say that the mainnet merger is a necessary part of this process, and a hard fork will be required.
So will the merger be done in this first quarter or the second quarter of 2022, or will it be delayed until later? If you have ETH-related holdings, you’ll want to keep an eye on this.