The Beacon Chain launched today on December 1st, 12 PM UTC. On November 24th, the deposit contract reached its deposit threshold of 524,288 ether, making the Beacon Chain eligible for launch 7 days later. Additional ether has been deposited since this threshold was met: as of Dec 1st 8:12 AM UTC, 877,249 ETH (worth over 500,000,000 USD) is staked in the deposit contract. Validators are now finalizing data and receiving ether in compensation.
At the moment, validators are only finalizing empty Beacon Chain slots (similar to blocks) and epochs in order to test the stability of the network in mainnet conditions. The Beacon Chain is the heart of the ETH 2.0 system and will be responsible for coordinating the validation of 64 shards once ETH 2.0 is fully launched.
Understanding Phase 1
Now that the Beacon Chain is live, Phase 1 development will focus on launching 64 shard chains. Shards are individual blockchains that ultimately finalize their data and coordinate cross-shard economic activity through the Beacon Chain. One of the purposes of shards in ETH 2.0 is to divide the work of processing and storing transactions in order to scale transaction capacity.
Initially, all shards will validate empty blocks in order to test the stability of the network in mainnet conditions. Just as in Phase 0, there will be active testnets with clients running shards.
Transferring Economic Activity to ETH 2.0.
By the end of Phase 2, transactions will be conducted on all shards. Somewhere between Phase 1 and Phase 2, mainnet Ethereum is anticipated to abandon proof-of-work and become the first shard finalizing mainnet Ethereum transaction via proof-of-stake. When this change occurs, over 50 billion USD worth of digital assets will be validated via proof-of-stake. Once cross-chain transactions can be conducted by all shards, lower transaction fees on other shards will likely lead to the migration of some applications over to other shards.
It is too early to determine how composability will be impacted by a sharded network. One of the factors that makes Ethereum DeFi applications powerful is their ability to easily integrate with one another. Composability will look very different in the event that two DeFi applications published on different shards attempt to interoperate. Although it is too early to provide any definitive analysis concerning what composability on ETH 2.0 will eventually look like, it is worth paying attention to these developments as they happen.
When fully launched ETH 2.0?
According to the Ethereum Foundation, Phase 1 and the transition of mainnet Ethereum into a proof-of-stake shard is expected to take place by 2021. Considering that Phase 2 is still in the research phase, it is expected to be complete after 2021.
Although we have provided these dates, they should be treated as soft targets. If ETH 2.0 developers do not feel ready to launch by the end of 2021, expect delays.
Teamwork Makes the Dream Work
This moment is a culmination of years of work by a multitude of teams and individuals building and coordinating the development of ETH 2.0. Prysmatic Labs, the Teku team by ConsenSys, Sigma Prime, Status, the Ethereum Foundation, Danny Ryan, Justin Drake, Quantstamp, and countless others have contributed to reaching this milestone.
Quantstamp audited two separate ETH 2.0 clients, Teku by ConsenSys and Prysm by Prysmatic Labs. Quantstamp looks forward to continuing working with developers in order to secure Phase 1 and Phase 2 of Ethereum 2.0.