The ethereum 2.0 full Proof of Stake (PoS) merger is speculated to arrive sometime later this year or early next year, but as it stands it still has a long to do list before getting there.
In the projects’ Github page developers say only three of the seven requirements have been met for the consensus layer.
The proportion is the same for the execution layer where two out of five have been finished so far.
On the Consensus API just one out of five requirements has been met, with work not yet began on any testing as clearly the base is not finished.
A progress bar thus would give this 30% work completed without including any testing, and so based on these facts we’d give an optimistic estimate for end of 2022 before this goes live.
Just the base itself may well take until the end of this year to complete. The early half of 2022 then for testing, and then a public testnet maybe next summer. Three months for that brings us to autumn 2022.
We can be more optimistic and suggest all this is finished by the end of the year, including the testing setup, but you’d still need three months of public testing, bringing us to spring and realistically to summer for actual launch even under this very optimistic timeline.
That few months doesn’t make much difference, but if we’re pessimistic in our timeline to account for potential sabotage by miners, we’d have to send it off to early 2023 and even then optimistically.
So our timeline is more a range of six months to two years, with the earlier part of the range being unlikely, but as it progresses to the higher end of the range, chances of a launch near 100%.
A Massive ‘Airdrop’ Coming?
This monumental milestone might come with some fun because it probably will create two networks and thus two coins as the Proof of Work (PoW) ethereum network will probably be kept running at least by some, and maybe everyone if difficulty goes to CPU level, which is probably why GPU will still be needed.
Miners themselves will of course have the incentive to at least try and keep the PoW network running, although the bigger ones have probably accumulated eth for staking so their ‘loyalties’ would be a bit complex.
From a high level perspective, a PoW backup would be beneficial just in case, not least because PoS eth makes different tradeoffs between liveness and security.
However, if PoW eth ever became a real challenge to PoS eth in an artificial way, the Ethereum Foundation does have the trademark of eth, so they can force it to rename.
But if there’s a split, you’d think it would be in the interest of all for it to be amicable, with both networks having their own advantage from an investment perspective.
Where PoS eth is concerned, inflation would be far lower at between 0.22% to 1% a year. However in the short term the staking eth unlock would make inflation a one off of probably at least 10% of total supply.
For PoW, inflation is running at 4% a year, but it gets a one off drop in total supply of probably at least 10% and by that point it might even reach 20%.
It’s not clear what happens to the current deposit contract once there is a merger, with that probably only reading and writing when instructed by the PoS network and eth.
Thus you’d get a hard split and you’d miss on yield from staking, with it unclear whether the PoW network would want to compete on that front by reducing block rewards to 1% of total supply.
The Ethereum Foundation devs moreover would probably focus on only the PoS network, something that may in turn make defi devs improve only on PoS.
But if that means the PoW network is kind of frozen in stone, that may have its own appeal as investors won’t have to account for pesky devs anymore subtly changing things like uncle rates or block times.
Yet so far minority coins have tended to go a bit whacko, with them usually becoming even more experimental rather than supper conservative.
So ultimately all depends on execution and how events unfold, but ethereum has a lot to look forward to in the coming months and years as it bids to become the dominant network.