Ethereum 2.0 upgrade
To alleviate the problems of high transaction costs and network congestion, the Ethereum team plans to increase the TPS figure to up to 100,000 as a part of the Ethereum 2.0 upgrade. In addition to facilitating a higher number of transactions, the upgrade will also see Ethereum transition from a power-hungry Proof-of-Work to an up to 99% more energy-efficient Proof-of-Stake consensus mechanism.
The transition from the PoW to PoS picked up steam in August 2021, with the launch of the London hard fork. The exact release date for a PoS-compatible Ethereum mainnet is currently not yet known. However, the team does have its sights set on the second half of 2022 and recently revealed that the PoW on Ethereum is in its “final chapter.”
It is worth noting that the Ethereum team has moved away from the “Eth2” terminology, citing clarity and correct representation of the Ethereum road map as the main reasons.
The new Ethereum upgrade will not only help make transactions cheaper and faster, but will also significantly increase the scalability of the platform and lay the groundwork for a Web3 future. The full rollout of Proof-of-Stake supporting Ethereum, called “The Merge”, will take place in the following phases:
- Phase 0: Started with the launch of the Beacon Chain in 2020.
- Phase 1: The launch of shard chains–proof-of-stake blockchains that use validators to confirm transactions–is expected in 2022. At this stage, shards won’t be supporting smart contracts.
- Phase 1.5: In this phase, the legacy Ethereum chain will transition to a Proof-of-Stake consensus and will be connected to the Ethereum 2 chain
- Phase 2: Shard chains will be able to communicate with one another and make use of smart contracts.
Ethereum 2.0 Staking
Instead of relying on miners to secure the network–as is currently the case–after the Merge is completed, transaction validation and the general upkeep of the network will be performed by network validators who will be able to earn ETH staking rewards.