DeFi and Ethereum 2.0 Milestones
Today, Ethereum is the second largest blockchain by market cap, yet the most widely used by number of transactions per day. Despite its broad usage and rapid maturation over the past five years, the Ethereum network of today is a prototype for the global world computer of tomorrow.
This new network architecture provides a novel opportunity for a broad category of ETH holders to create a continuous revenue-generating capability for providing public infrastructure to the Ethereum community.
Ethereum 2.0 is an upgrade from Ethereum 1.0’s current Proof of Work consensus model to Proof of Stake (PoS), which allows for improved scalability, throughput, and security of the public mainnet. It includes a variety of new features aimed to address the “Scalability Trilemma,” a concept in distributed system architecture that currently prevents blockchains from achieving the scalability required for mass adoption. For Ethereum and many other blockchains today, the scalability trilemma is the result of consensus designs that require every node to verify and execute every transaction.
This consecutive verification renders the network unable to process more transactions than any single network node is capable of, limiting the scalability potential of the whole (particularly as the data burden grows over time).
Ethereum 2.0 is a pure Proof of Stake system, on which participating validators are required to stake their ether in addition to providing compute resources to secure the network by proposing and attesting blocks. In return for their contributions, validators will earn periodic payouts if they follow the rules of the protocol. Alternatively, validators will be penalized if they act maliciously or are offline.
Source: Ethereum 2.0 Staking Ecosystem Report