1.5 Projections


As of 14 July 2021, there is 6,284,546 ether staked in the Eth 2.0 deposit contract which accounts for just over 5.25% of all Ether. This Ether cannot be withdrawn until phase 1.5, which is when the merge is complete. This could take another year and a half. With an expected increase in Ether being staked, the circulating supply will be limited, causing a supply side crisis, which could increase the price. There are well over 16,000 unique depositors in the staking contract which ensures the decentralization aspect of the network is protected.

Reading List

Learning Objectives

  • Understand the differences between POS and POW

  • Know the timeline for the rollout of phase 1.5 and beyond for the Ethereum ecosystem

  • Understand what happens to the interest rate of staked Ether as more or less gets staked

  • Determine if the future upgrades for Eth would be beneficial for the community

Key Points

The London hardfork is expected on July 15th and the Altair hardfork is planned for the middle of July as well. After these two hardforks are completed, the core Ethereum team can focus all of their time towards the merge. The merge is phase 1.5 and will switch the consensus program to POS. After this is completed, the staked Eth in the 2.0 contact can be withdrawn which will impact the interest rates of staked Ether.

Price and interest rate projections -

As phase 1.5 goes live, many users that staked Eth throughout the last year may want to withdraw their eth and sell it, which would drop the market price of Eth. This would also increase interest rates for the users that kept their eth staked, which would in turn encourage new users to buy eth and stake it.

Review Questions

  • What happens to interest rates as more users stake?

  • When will the staked Eth be withdrawable?

  • When can the merge be focused on?

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