Quick take:
- 10.7% of Ethereum 2.0 validator deposits are from Kraken
- Coinbase and Bitfinex hold 5.8x more Ethereum than Kraken
- 2 crypto exchange could control 1/3 of the validators, 5 exchanges could control 1/2 of the validators
- 1.436 Million ETH is locked in the deposit contract with more being sent daily
10.7% of the current Ethereum 2.0 validator deposits are from the crypto exchange of Kraken. This is according to ETH2.0 researcher Justin Drake, who further pointed out that Coinbase and Bitfinex own 5.8 times more Ethereum than Kraken.
If the Ethereum owned by both Coinbase and Bitfinex was sent to the Ethereum 2.0 deposit contract, two exchanges could control one-third of the ETH2.0 validators. Mr. Drake went on to point out that five crypto exchanges could control half of the ETH2.0 validators based on the sum of their Ethereum holdings.
Stake from Home to Increase Decentralization of Ethereum 2.0
Justin shared his analysis via the following tweet that also pointed out that retail traders were better off staking from home than through the aforementioned crypto exchanges. Doing so would aid in the decentralization of the Ethereum 2.0 Network.
10.7% of validator deposits are from Kraken.
Coinbase and Bitfinex have 5.8x more ETH than Kraken. Two exchanges could control 1/3 of the validators. Five exchanges could control 1/2 of the validators.
Stake from home to avoid exchange fees and decentralise 🙂
— Justin Ðrake (@drakefjustin) December 13, 2020
1.436 Million Ethereum Locked in the ETH2.0 Contract
According to CryptoQuant, a total of 1.436 Million Ethereum has been sent to the ETH2.0 deposit contract. This is despite the minimum amount of 524,288 ETH being reached on November 24th.
Crypto Exchanges and Institutional Investors Will Stake More of Their Ethereum on ETH2.0
The deposits to the ETH2.0 contract will most likely continue with other crypto exchanges and institutional investors opting to utilize their idle Ethereum holdings via staking.
Annual staking rewards on the Ethereum 2.0 network have been estimated to be between 4.6% to 10.3%. This means that crypto exchanges and institutional investors will most likely ‘jump in with both feet’ at the possibility of earning such an attractive interest rate by ‘parking’ their Ethereum on ETH2.0.
Staking of Ethereum Will Benefit the Long Term Value of ETH
With the number of ETH staked continuing to increase, it can be forecasted that in the near future, a good percentage of Ethereum’s circulating supply will be locked on ETH2.0. This means that there will be fewer Ethereum left in the markets for trading, thus causing a supply shrinking. This fact, coupled with growing demand from Ethereum investors and DeFi users, the value of ETH will increase gradually over time.
