As the crypto community looks forward to the launch of Ethereum 2.0. There are still speculations as to whether the upgrade can match the speed of DeFi in growth. Currently, the Ethereum ecosystem functions correctly on the proof-of-work, but this new upgrade will introduce proof-of-stake to the system.
To achieve this, the network has to first ship the latest blockchain, “The Beacon Chain,” to carry out these upgrades. This blockchain will pave the way for other upgrades on the network to exist successfully. For instance, it will make the network more secure, scalable, and sustainable.
It will also introduce staking to the network for the purpose of securing the network more. Once the Beacon Chain has successfully launched and operational, another upgrade, “Shard chains,” will follow suit.
Implications and effects of Ethereum 2.0
The decentralized finance sector recorded significant growth at the beginning of the year. Many players in the crypto space have speculated that the sector may soon collapse as fast as it grew. However, it seems that if Ethereum 2.0 launches successfully, there’s going to be lots of noticeable changes in the DeFi markets.
Even though some argue otherwise, some prominent figures believe that DeFi has come to stay and can only improve. These figures are hopeful that Ethereum 2.0 will improve the sector because many decentralized finance apps depend on the network to flourish.
But the realists wonder if the new upgrade will be fast enough to match the growth of DeFi. From what we could gather, Ethereum 2.0 will make the network more scalable to accommodate its blockchain’s expansion. This upgrade is good because the Ethereum blockchain has been having some slow processing speed due to network congestion from excessive use. But some prominent persons are still stating that the new platform will not sustain the continued growth of DeFi activities.
Vitalik Buterin, the co-founder of Ethereum, refutes such statements by saying that Ethereum 2.0 will grow as fast as DeFi grows. He believes that people will see the benefits of the upgraded network faster than they anticipate.
The issue at hand is that the launch of Ethereum 2.0 may not be as fast as necessary to match the growth in the DeFi market. Before the final launch, there must be many phases to cross. And each one requires lots of research to make it successful. So, it’s likely that it may take more than 2 years. before the community get to enjoy the benefits of Ethereum 2.0