Rajarshi Mitra
Independent Analyst
- Ethereum is witnessing a surge in transaction activity due to the DeFi boom.
- Spartan Group co-founder Kelvin Koh said that ETH 2.0 will help in the improvement of the network.
- ETH 2.0 will significantly reduce network clogs as it drops Ethereum’s dependence on miners.
The anticipation of Ethereum 2.0 is continuing to rise as the activity on the network is surging. Kelvin Koh, the co-founder of venture capital firm Spartan Group, has recently said that ETH 2.0 will have play a key role in the growth of the network. According to Koh, every phase of ETH 2.0 over the next couple of years will bring Ethereum closer to its final stage and will be “catalysts for ETH.”
For many years, experts have considered scalability to be the main obstacle in adopting decentralized applications (DApps). These DApps, which include DeFi protocols, process all data on-chain, on the Ethereum blockchain. When a prominent number of transactions are unconfirmed, it causes the Ethereum network to clog.
Ethereum 2.0 is expected to significantly reduce network clogs as it drops Ethereum’s dependence on miners. Eventually, as ETH 2.0 gets launched, miners will get phased out from the network. Users will then process data by “staking” their ETH. In return, they will earn incentives based on ETH 2.0’s reward system.
According to Delphi Digital’s analyst Alex Gedevani, Ethereum still has room for growth. Gedevani said that as ETH 2.0 will shift Ethereum to the Proof of Stake (PoS) consensus model, it will support additional validators and users.
As a $36 billion asset compared to a growing DeFi ecosystem with $3.8 billion TVL, ETH PoS has potential for large materiality. The Beacon chain will have the capabilities to support 10s of thousands of validators, more than any other PoS protocol.
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