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The Potential Ripple Effects of Ethereum 2.0, Explained

The virtual event invest: ethereum economy takes place on Wednesday, Oct. 14. CoinDesk’s Christine Kim spoke to colleagues Michael J. Casey and Aaron Stanley about the most compelling and under-discussed topics about Ethereum 2.0 headlining next week’s conference.

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This episode is sponsored by, and Elliptic.

Related: It’s Time to Launch the Ethereum 2.0 Beacon Chain

From the dynamics of staking to the architecture of sharding, there haven’t been many topics Ethereum 2.0 core developers have shied away from discussing over the past five weeks on “Developer Perspectives: Ethereum 2.0.”

So see: 3 Things You Should Know Before Staking on Ethereum 2.0

Each discussion, however, has sparked new questions about the ramifications of Ethereum’s transition to proof-of-stake on the crypto markets and the broader blockchain industry.

“There’s a lot of unanswered questions about how the markets are going to behave,” said Casey, CoinDesk’s chief content officer. “Do we end up with a split, [with] two versions of ethereum or at least two tokens that trade differently in the marketplace?”

Related: Signal, Noise and the Coming Era of AI Curation

Casey added that financial engineers in the decentralized finance (DeFi) space will likely seek to unlock the liquidity of staked ETH on Ethereum 2.0 before token transfers are officially enabled on the network. What new DeFi products are created, their attributes and, most important, their impact on the value of ETH remain to be determined.

Along with lingering questions about how the markets will react to the launch of Ethereum 2.0, there’s also uncertainty about how the launch will affect the competitive landscape for dapp users and dapp developers in the crypto industry.

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“What does the multi-chain future look like?” asked Stanley, CoinDesk’s managing director of events content. “If Eth 2.0 succeeds, … what does that mean for all these other [smart contract] chains out there? Are they going to go away or just cease to exist? I don’t think that’s the case.”

With the recent popularity around yield farming and liquidity mining on Ethereum, Stanley also questioned what the real incentives are for users holding large amounts of ETH, upwards of $11,000 worth, to stake on Ethereum 2.0 when they could earn “100x returns farming ‘hotdog coin ‘ or whatever the meme coin of the day is.”

So see: Yearn, YAM and the Rise of Crypto’s ‘Weird DeFi’ moment

These questions are pertinent to the discussions happening next Wednesday at invest: ethereum economy. Keynote speakers headlining the virtual conference are founder of Ethereum Vitalik Buterin and US Commodity Futures Trading Commission Chairman Heath P. Tarbert. To register for the event, click here.

To download or stream the full podcast episode with Casey and Stanley you can go to Apple Podcasts, Spotify, Pocketcasts, Google Podcasts, Castbox, Stitcher, RadioPublica or RSS. For early access to future CoinDesk Research podcast episodes, be sure to click “subscribe” on these channels.
CoinDesk Research has recently published an updated report about the launch of Ethereum 2.0, as well as recent developments on the existing Ethereum blockchain. Download it for free on the CoinDesk Research Hub.

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