Editor's Note: This article comes fromBlockArk, reprinted by Odaily with authorization.
Editor's Note: This article comes from
, reprinted by Odaily with authorization.
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The meaning of the grand narrative
The famous psychologist Maslow summed up a hierarchy of human needs. Human needs are hierarchical, ranging from physiological needs, to safety needs, to social needs, to esteem needs, to self-actualization.
Everyone has the potential impulse to transcend themselves and achieve self-realization. It can be said that the ultimate goal of life is to pursue self-realization. All physiological needs, safety needs, social needs, and respect needs are all prepared for the highest goal of self-realization.
But it is very difficult to achieve self-realization. The vast majority of people in this world are doomed to be mediocre or ordinary people, and there is no possibility of self-realization. Therefore, there is a need for a grand narrative. Investing in grand narratives can satisfy people's need for self-actualization.
The same is true for the grand narrative of the capital market. There is nothing more comforting than the emergence of an inspiring grand narrative in the painful and tedious investment career. You only need to immerse yourself in the story with everyone to get the achievement satisfaction of wealth and investment.
In the traditional capital market, Jia Yueting of A-shares and Musk of the US stocks are two typical cases of grand narratives. They both gave investors and currency prices a very large stimulus in a certain period of time. The difference is that one has no realization ability and the other has realization ability. Musk, a man who changed the electric car industry, privately formed a company to launch a rocket, and started a Mars colonization plan. Compared with Xiaopeng Motors and Weilai, Tesla's temperament is suddenly sexy and charming. Of course, the stock price is even sexier.
Well-known projects in the blockchain field still follow such rules.
BTC - digital gold
LTC - digital silver
FIL - a new generation of interstellar storage network
EOS - Blockchain 3.0
EOS, a strong competitor of ETH, Vitalik's "real ETH 2.0", although it seems a bit ironic now, but this slogan was quite popular back then.
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The listing of COMP in June kicked off a huge wave of speculation in DeFi, which lasted for nearly three months. It coincides with the retreat of the DeFi frenzy of speculation. Review the past to learn the new, let us review it. It can be said that in the wave of DeFi speculation and the previous wave of Dapp speculation in 2018 (mainly ETH/EOS/TRON), the public chains have proved with their strength and hard work that there are only competitors of ETH and ETH in the public chain sector We have 2 categories. A large amount of data is constantly supporting this fact to us.
Dapp.review: 7-day statistics on public chain transaction volume
In terms of transaction volume, compared with ETH, the transaction volume of all other public chains is almost compressed into a horizon.
Justswap liquidity and trading volume (weekly)
Even TRON, the public chain with the best performance except ETH in this round of DeFi, still has not escaped the fact of a sharp decline.
Defipulse: Locked amount on the ETH chain
In contrast to ETH, the core applications on it have accumulated a user base. From the data, it can be seen that the DeFi lock-up amount of ETH has not decreased on a large scale as the speculative wave subsided.
Defipulse: Uniswap lockup amount
Defipulse: Compound lockup amount
Regardless of whether it is Uniswap, the top application of DEX, or Compound, the top application of lending, the lock-up data is still rising steadily.
Uniswap.info: Trading volume (weekly)
*The penultimate red column is the abnormal transaction caused by the Harvest hacking incident
From the perspective of transaction volume, despite the significant attenuation, Uniswap still maintains a platform that far exceeds that before August 2020, and is accompanied by a continuous increase in the amount locked.
Uniswap shows the same resilience as BTC, and the "silt" accumulated after the ebb tide makes them have better growth soil.
For the cryptocurrency market, DeFi speculation has ebbed, but DeFi has not ebbed, let alone ETH. History has proven that ETH has won out. Blockchains such as Thunder and Algorand, which only have the advantage of being fast, are no longer sexy.
The Grand Narrative of ETH 2.0
For ETH, the only competitor now is itself. How to better meet the needs of the encrypted public is the top priority. A rather ironic fact about encryption culture: the core of the encryption world is currently a centralized exchange that is completely crypto-free. Exchanges are de facto centers of crypto power.
Then all this is quietly changing. Dapp and DeFi have given the encrypted people the best preview of blockchain life, and opened up our vision. It turns out that with the wallet, you can conduct various operations such as transactions and loans while retaining the control of your own assets.
ETH is already standing at the door of the encryption center, ready to break in at any time.
And before it are two shackles of its own: unable to cross-chain and low throughput.
There is currently no systematic solution like DOT for cross-chain, but cross-chain bridge solutions like REN are not unavailable. After all, in the absence of revolutionary progress in other public chains, the strong user inertia makes ETH still the center of the Matthew effect.
Coingecko: Market Cap Ranking
Ways like Wrapped will be accepted as trusted assets. WBTC has been able to occupy the top 15 positions in the market value, and Wrapped of other currencies is not difficult to achieve technically. In the third quarter, we also saw that currencies on other public chains such as TPT and FNX migrated to ETH in a centralized manner.
As for the speed limit. This limitation of ETH has made EOS and TRX, as higher-performance public chains (more centralized than ETH), gain more momentum when the transaction mining Dapp rises. At the same time, products such as derivatives that rely on high-speed liquidation have not been popular on ETH.
Order book-style DEXs such as EtherDelta and IDEX have always been relatively niche among exchanges. The rise of Uniswap in this round has benefited from the alternative breakthrough of the AMM method.
Coingecko: Spot CEX Trading Volume Ranking
Coingecko: DEX Trading Volume Ranking
Uniswap’s trading volume can currently reach 5.9% of Binance’s. However, there are generally centralized exchanges with brush volume behavior. If we compare Coinbase, which does not trade volume, the proportion can reach 35%. In Coingecko's ranking, Uniswap's trading volume ranks 11th, excluding the exchanges that we know have significant turnover.
In other words, after Uniswap, there are no second-tier exchanges. And after ETH 2.0, it may be that there is no first-line centralized exchange after XXswap. With the current performance of ETH, Uniswap can even enter the historical arena as a challenger of the first-tier exchanges, let alone the expectations brought by the high performance of ETH 2.0. It can be said that when ETH 2.0 matures, the world's largest cryptocurrency exchange can only be a DEX.
Yesterday's MTgox is today's Okex. (Okex founder Xu Mingxing was investigated by the police for allegedly assisting in money laundering, which paralyzed the withdrawal of Okex assets.) DEX and CEX are equal to hackers. But CEX will never be able to give real control over the assets that DEX can give users.
The grand narrative of ETH 2.0 is that ETH is the blockchain. It will have a huge siphon in the encrypted world outside of ETH. All public chains that cannot keep up with the rhythm will be siphoned by ETH, and all exchange tokens that cannot keep up with the rhythm will be siphoned by ETH. A high-performance public chain will give birth to more applications, and these applications will solidify the foundation of ETH. It can be said that ETH 2.0 represents that apart from BTC, I am the only one in heaven and earth.
The Three Phases of ETH 2.0 and Low Inflation
Ethereum 2.0, also known as Serenity, is the next major upgrade to the Ethereum blockchain.
Ethereum 2.0 is planned to roll out in at least three phases: phases 0, 1, and 2. Phase 0 is scheduled to start in 2020, and Phases 1 and 2 will be released in the next few years.
Phase 0: Start the Beacon chain
Phase 0 focuses on getting validators up and running on the Beacon chain. Users can deposit 32 BETH (BeaconETH) on the chain to become a verifier, but at this stage the verifier only manages the Beacon chain, and there is no shard chain at this time.
The Beacon chain will keep an iterative design as simple as possible in the early stage, and accounts, asset transfers, and smart contracts are not supported at this stage. BETH can only be used by verifiers, and cannot be transferred on the chain, nor can it be transferred to exchanges.
The Beacon chain is a brand-new PoS blockchain, which is the core component of Ethereum 2.0. ETH 2.0 also includes three parts: shard chain and virtual machine layer.
ETH 2.0 components
The original ETH 1.0 will become one of the shards of ETH 2.0. And because there are two chains, there will be two tokens, ETH and BETH, during the operation process.
Phase 1: Start the shard chain
Phase 1 will add the shard chain component to realize Beacon chain + shard chain. But this stage is just a trial run of the sharding structure, not real expansion with sharding. The Beacon chain regards the block of the sharding chain as a simple collection of bits without structure or meaning. The shard chain still has no accounts, assets and smart contracts at this time.
The Beacon chain will support 1024 shard chains, and each chain will be verified by a committee of 128 validators. The Beacon chain randomly selects a shard verifier for each shard in each cycle, and the shard verifier proves the content and status of the shard through "cross-linking".
It should be pointed out that in phase 0 and phase 1, there is no data circulation between Ethereum 1.0 and Ethereum 2.0, and Ethereum still runs on the PoW chain.
Phase 2: Start the virtual machine layer
Phase 2 will join the virtual machine layer, which is the last major component of Ethereum 2.0. The Ethereum that implements the Beacon chain + shard chain + virtual machine layer is a complete public chain system that we are familiar with. The availability of Ethereum 2.0 will be officially realized at this stage.
At this time, smart contracts are introduced into the system, and assets can be freely transferred on the chain; the shard chain has changed from a simple data marker to a fully functional blockchain, and cross-link operations support cross-shard communication; some of the most commonly used Development tools may also be ported to Ethereum 2.0 to support EVM2. EVM2 is Ethereum's new virtual machine eWASM, which is based on Web Assembly and supports multiple programming languages to implement smart contracts.
Not to mention phase 2, even phase 1 will take 1-2 years, which means that the current launch of ETH 2.0 is still a long way from the real application, which means that even if ETH 2.0 has a climax before December , It is only the climax of speculative hype. Don't have too many expectations for ETH 2.0 in the short term. At the same time, this also means that before the real 2.0 arrives, the contradiction between ETH's current low operating speed and more and more applications makes layer2 a direction worthy of attention.
Let's make a summary. The core upgrade of ETH 2.0 is POS + sharding, both of which exist to improve the scalability and throughput of ETH.
ETH 2.0 launch progress
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https://launchpad.ethereum.org/
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The current progress is about 9.6%. This progress has been advancing, but there is a high probability that the start-up conditions will not be met on December 1.
When the staking start condition of 524,288 ETH is reached, the rate of return is 21.6%. At this time, you can continue to mortgage. When it reaches 10M ETH, the rate of return is 4.9%, which means that the final inflation rate is about 0.43%. That’s not high, and the collateralization ratio at this point is around 8.8%. The inflation rate of ETH based on PoW is about 11.20% per year.
It is well known in the crypto community that Bitcoin currently has an inflation rate of about 1.8%, which is better than the inflation rate of a basket of global fiat currencies, which is about 2.99%. That is, when ETH 2.0 starts, the inflation rate of ETH will be better than that of BTC.
And with the introduction of ETH 2.0 proposal EIP 1559, a large amount of transaction fees will be burned instead of being paid directly to miners. This means that if more transaction fees are burned than new ETH is issued, the net inflation rate could even be negative.
ETH miners capture all fees associated with transactions on the Ethereum network. Over the past year, miners have earned around 259,823 ETH ($59.7 million) in fees. However, the extra huge income of miners does not help the ETH network itself too much.
It can be seen that the characteristic of scarcity will become more prominent in ETH 2.0. As we all know, the 21 million bitcoins will never be issued, which has always been talked about, and has been plagiarized as quotations by various project parties. The deflationary ETH is obviously larger in the imagination of a single value.
ETH 2.0 Participation Guide
The threshold for building an ETH node is not high. Hold 32 ETH and build it according to the official guidelines and hardware standards. There are three ways to participate
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https://www.chainnews.com/articles/602578542483.htm
trading platform
trading platform
In the past 2 years, centralized Staking solutions like Binance (Earning Bibao) have been very mature and faced full competition. Ordinary users do not need to adopt self-built solutions at all.
Of course, the innovation drive of mainstream trading platforms is not as fast as that of small exchanges, so the launch speed may be slower. Small exchanges will launch products faster, but retail investors are not recommended to participate. Because second-tier exchanges face a more difficult competitive environment after DEX becomes more mature.
On-chain service provider
For example, Ankr, Blox, Rocket Protocol, etc. provide non-custodial "one-click staking" methods, and all provide "single pool" services to satisfy users who do not have enough 32ETH. For example, Ankr and Rocket Protocol will also provide bonded ETH to ensure that the pledged ETH can still be circulated in the market, which also eliminates the fear of most players about the loss of liquidity of the pledge.
It is worth mentioning that. At present, the process of ETH of Ethereum 1.0 entering the 2.0 deposit contract is one-way, and it is impossible to go back and forth at this stage. According to the official documentation, after the first stage of Ethereum 2.0, verifiers may transfer funds, and after the second stage, verifiers can extract this part of assets to a specific shard. The entire development process may require 2 years.
There is not much time left for other public chains. Whether you can do it or not, ETH 2.0 is on the way.
Summarize
Summarize
As mentioned at the beginning, investing in a grand narrative can satisfy people's needs for self-actualization. We know that this is not everyone's pursuit, so you can also directly read the conclusions about ETH 2.0:
1. The grand narrative of ETH 2.0 is that ETH is the blockchain
2. ETH 2.0 is a one-way channel, which will reduce short-term circulation and provide room for speculation.
3. Investing in second-tier exchanges has a very poor profit-loss ratio.
4. Investing in a public chain without a unique selling point has a very poor profit-to-loss ratio.
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