ETH 2.0 will see the network transition from an energy-draining, expensive proof-of-work (PoW) consensus mechanism to proof-of-stake (PoS). This will effectively make miners obsolete, as blocks will instead be verified by validators who stake 32 ETH in order to run a node.
Bison Trails said it has unveiled a suite of enterprise products that will make it easier for users to stake ether, manage validators, and interact with the “Beacon Chain,” the name that’s being given to the first iteration of the ETH 2.0 mainnet.
Focused on proof-of-stake blockchains, Bison Trails builds and manages nodes for other blockchain platforms including Cosmos, Decred, Tezos, Dfinity, Filecoin and Orchid. Last November, it raised $25.5 million to expand its business of providing the digital infrastructure on which blockchains rely.
In an email to Modern Consensus, Bison Trails co-founder Aaron Henshaw said the company believes “Phase 0” of Ethereum’s new blockchain is on track to launch this year. ETH 2.0’s debut had been slated for January, but it has been pushed back several times because of code vulnerabilities.
‘No easy feat’
Bison Trails CEO Joe Lallouz has said that his company is “excited” to help early adopters join ETH 2.0, but warned many challenges lie ahead.
“With millions of users, tens of thousands of dApps and companies, and billions of dollars of value involved with the protocol, the transition to ETH 2.0 will be no easy feat,” he explained in a July 1 news release.
Bison Trails has claimed that those who start using its infrastructure to stake ETH will be able to earn rewards until Phase 2 of the new network is launched, which will see transactions enabled for the first time. According to the platform, the reward rate of 23% on their ETH is substantially higher than most alternative options—and users won’t have to go through the hassle of manually managing their participation.
But the company predicted that Phase 1.5 will be “one of the most anticipated moments of the transition process,” as this will see the merging of Ethereum 1.0 and 2.0 into a single chain.
“Unlike other proof-of-stake protocols that are trying to start from nothing and build and scale a new protocol, Ethereum is already a protocol that has tokens in the hands of millions of people with tens of thousands of dApps,” Lallouz added. “It’s starting from a very different place. This is important for the ecosystem as a whole as well.”
When asked by Modern Consensus to detail the most compelling advantages of ETH 2.0, Henshaw said that the PoS consensus mechanism could lower barriers to entry for individuals who want to secure the chain.
He explained: “The costs of acquiring 32 ETH are significantly less than those associated with operating a PoW mining operation. A big advantage of PoS is that the asset also is used to secure the chain. The investment is in something that will be held for a long time. PoW, by contrast, necessitates buying mining hardware—an asset that offers diminishing returns and needs to be replaced regularly.”
Henshaw added that the transition to PoS will pave the way for sharding, a partitioning technique set to increase Ethereum’s capacity considerably. “Partitioning the ETH 2.0 blockchain into 64 shards, with each shard capable of processing transactions and blocks simultaneously, increases throughput capacity at least 64x that of what is currently possible on just one shard of ETH 2.0, which is already significantly more throughput than the Ethereum network today.”