Ethereum News
zkSync Announces Historic Milestone as Coinbase Bets on ETH Staking Rewards to Double Post-Merge
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The Ethereum Community will undoubtedly be pleased with the latest developments set to come to the network.
While the Ether market endured a tough week, Coinbase and zkSync shared positive news set to change the Ethereum landscape. The former suggested that Ethereum staking rewards will increase significantly after the scheduled Beacon chain merge. zkSync, on its end, announced the release of ‘the first EVM-compatible ZK Rollup on Ethereum's testnet.' Details below:
Ethereum staking rewards to grow two-fold after Beacon Chain merger
Coinbase, the largest crypto exchange in the US, has envisioned that staking rewards will gradually increase after the merge between Ethereum's mainnet and the Beacon Chain.
The exchange told its clients that the merger expected to happen around June would result in better rewards. Coinbase forecasts that the annual percentage rate (APR) will increase the current 4.3%-5.4% range to 9%-12% upon completion of the merger.
It is worth noting that other rival blockchains have higher staking rewards. Data from Staking Rewards shows that Ethereum currently has the second-lowest APR among the top ten crypto assets by staked value.
Top ten crypto assets by staked value. Source: Staking Rewards
The estimated almost double growth from current rates will result from revising the amount in rewards paid out to stakers to incorporate the fees that miners currently receive (with the exclusion of the base fee). An increase in the rewards that stakers (validators) receive would gradually scale the lucrativeness of the Ethereum staking contract.
Many users are already placing their bets on the Ethereum staking contract, as recent days have seen some large figures moving in. As markets see continued periods of correction, it is quite possible more investors will move into such havens.
Blockchain analytics platform Glassnode shared via Twitter on Wednesday that the total ETH deposited in the Ethereum 2.0 deposit contract had peaked at 9,574,866 ETH. As of *yesterday, this figure had closed in on 9.6 million ETH, translating to over $25.65 billion (at current prices) deposited to secure the network and get more exposure to Ether.
ETH total staked value. Source: Glassnode
As staking translates into locking periods for ETH tokens, increased deposits into the staking contract would cut down on the circulating supply of Ether. The selling pressure that token holders experience could taper off on this account.
*We couldn't fetch the Friday figures as Glassnode is lagging. A message on the site reads, “ETH / ERC20 metrics are currently lagging by 12 hours. We are working on a fix.”
zkSync successfully deploys zkSync 2.0 on the Ethereum testnet
Zero-knowledge blockchain protocol, zkSync, on Tuesday revealed that it had completed the deployment of its rollup protocol on the Ethereum test network. The permissionless, Turing-complete rollout could revolutionize the Ethereum scaling space. Its framework supports growth without security and decentralization trade-offs. Notably, it can run the full Ethereum environment – something that many zk rollups have, in the past failed, to achieve.
“The promise of a ZK Rollup capable of general computation has been predicted by many to be a key component in the endgame of blockchain scalability, but as little as one year ago, many of the top minds in the space believed we were years away. Today, we're launching one to the public on Ethereum's testnet,” a section of the announcement read.
The development is hyped to be a game-changer as it eliminates the need for validators by leveraging cryptography. The Matter Labs post detailed that the EVM-compatible scalability zk-Rollup will go a long way in improving the user experience.
“The current version of the zkSync 2.0 solves the needs of most applications on Ethereum, and with more features planned for release soon, zkSync 2.0 will provide developers with a design space to experiment with applications not possible on Ethereum today.”
The Ethereum community reacted positively to the development, with some touting it as the innovation that will solve Ethereum's scaling problems. zkSync 2.0 will further potentially address the high transaction fee challenge that Ethereum users have raised severally in the past. In the last few weeks, many financial institutions and industry experts have forecasted that Ethereum might lose out to other rivals such as Solana and Avalanche due to its high transactions speeds and low speeds. The latest rollout could potentially restore Ethereum's advantage, keeping it at the lead.
To learn more about Ethereum visit our Investing in Ethereum guide.
