ETH 2.0 will be officially launched on December 1, and the 524,288 ETH staking initiation conditions have been 100% completed.
With the deposit of the first fund worth 1 ETH in the Ethereum Deposit Contract on November 4, 2020, ETH 2.0 has officially entered the warm-up stage of Phase 0. ETH 2.0 will be launched in a total of three phases, Phase 0 Beacon Chain, Phase 1 Shard Chain and Phase 2 State Execution. There are still 7 days left for the Phase 0 Beacon Chain to start. The ETH 2.0 Beacon Chain phase will be launched on December 1 when the ETH deposit contract (contract address: 0xec1d6163e05b3f5d0fb8f354881f6c8b793ad612) has reached the staking initiation condition of 524,288 ETH. There will be 16,384 nodes for block validation of ETH 2.0 Beacon Chain during this phase, with an annualized yield of 21.6% on the staking. At this point, staking can continue to be made and the annualized yield of ETH 2.0 Staking will remain around 10% up to a total staking volume of 3 million, and when 10 million ETH are staked, the annualized yield of the staking will be around 4.9%.
ETH Staking Annualized Earnings and Inflation Relationship
As the total collateral volume of Validator ETH increases, the annualized yield of ETH 2.0 Staking will decline considerably. Users who stake ETH 2.0 first will receive a higher “risk-free” yield (safe nodes, no slash), which is a very attractive option for Holders who want to hold ETH for the long term. However, the problem is that the process of entering a 2.0 deposit contract from ETH 1.0 is unidirectional and there is no way to reverse the process at this phase. According to the ETH 2.0 documentation, the funds staked to the ETH 2.0 Validator are redeemable when ETH 2.0 enters Phase 1 Shard Chain, which can take more than one year to develop from Phase 0 to Phase 1. This is a difficult decision for those who want to reap the benefits of ETH 2.0 Staking but don’t want to miss the “bull market”.
Bifrost Finance, as the base protocol of the Polkadot ecology to provide liquidity for staked assets, will provide staking liquidity for ETH 2.0. Using the Bifrost protocol will be very simple, just convert ETH to vETH (Voucher Ethereum) and become a user served by the protocol. By holding vETH, you can earn staking reward and sell vETH without waiting for the lock-up period of ETH 2.0 Phase 0 to Phase 1 for up to one year to sell vETH to recoup funds. As a dual-protocol asset of ERC20 and Substrate Base, vETH not only enjoys the staking liquidity brought by vETH, but also allows vETH to cross-chain into the Polkadot parachain ecosystem through Ethereum <-> Polkadot transfer bridge and experience parachain ecosystem applications such as DeFi and Dapp in Polkadot.
vETH will be separated into four phases to go online
Phase 0 Mint Drop (Current Phase)
Bifrost launches vETH mint drop, mint vETH and share BNC incentives.
Support ETH 1:1 mint or redeem vETH
The ETHs will not be involved in ETH 2.0 deposit contract at this phase.
Not support vETH transaction, only available “minting” or “redemption” for vETH and ETH.
Phase 1 ETH 2.0 Staking (Estimated time: Dec 3rd)
ETHs minted by vETHs will be deposit into deposit contract of ETH 2.0.
Release ETH APR revenues, which will be distributed through an increase in the exchange price of vETH and ETH.
Validator will be selected automatically via the node self-collateralisation quantity and Slash security score.
vETH ERC20 transaction will be launched, users can get vETH via “minting” or “purchasing”, but not support vETH “redemption”, which means only “Sell” can redeem ETH.
Phase 2 Bifrost main-net online
Bifrost conducts Polkadot parachain slot auction and completes mainet online.
vETH will cross-chain into the Polkadot parachain ecosystem via the Ethereum <-> Polkadot transfer bridge as a Bifrost Substrate Base asset.
Node Decentralised Selection and Staking Revenue Generation for ETH 2.0 can be achieved via Bifrost parachain vote bidding mechanism.
vETH is available as an ERC 20 Token and Substrate Base asset for use in both Ethereum and Polkadot networks.
Phase 3 ETH 2.0 shards complete
ETH 2.0 completes shards at phase 1, vETH can be destroyed and retrieved ETH 2.0 withdrawal credentials.
Users can get BETH by ETH 2.0 withdrawal credentials.
Users have two ways of obtaining vETH, “minting” and “purchasing”, as well as two ways of getting ETH back, “destroying” and “selling”.
Bifrost vETH Mint Drop
Towards vETH Phase 0 & Phase 1, Bifrost will contribute 1.25% of the Foundation for a total of 100,000 BNC for the vETH Mint Incentive. vETH Mint Drops will take place over a total of 32 days with a linear release of 3,125 BNC per day, divided according to vETH holding shares and time. Phase 0 is expected to last 7 days (Nov 27th–Dec 3rd), vETH and ETH are free to be minted and destroyed at this phase. Phase 1 is expected to open on Dec 3rd, those ETHs from vETH mint will be officially entered into ETH 2.0 deposit contract for staking, so vETH will not be able to be destroyed and redeem ETH.
vETH Mint Drop revenue formula
The difference in end results between two users, Alice and Bob, receiving BNCs at different frequencies is simulated here.
According to this chart, vETH(max age)=8 Days is a constant and the formula implements the vETH(age) calculation by playing the market in a way that makes the distribution of BNC revenue more equitable. If Alice and Bob cast an equal number of vETHs, the closer to vETH(max age) the user who receives a claim, the higher the revenue will be, so that claiming every 8 days is the best strategy if all else being equal.
The Mint Drop and vETH contracts have now been deployed in the Ethereum Rinkeby test network, are being audited for smart contracts and will be officially released on Dec 27th, the 100,000 BNC Mint Drop will be switched on simultaneously. Liebi Pool is now integrated with Bifrost vETH mint contracts and allows users to participate in ETH 2.0 Staking and Bifrost Mint Drops either by calling vETH mint contracts directly or by using Liebi Pool to mint vETH.
Bifrost Mint Drop event page: https://vtoken.io/drop
vETH Mint Drop Tutorial: https://bifrost-finance.medium.com/veth-mint-drop-tutorial-53455dfc81e7
MintDrop Contract: https://etherscan.io/address/0xec1d6163e05b3f5d0fb8f354881f6c8b793ad612#code
What is Bifrost ?
Bifrost is a Polkadot Ecosystem DeFi infrastructure protocol that aims to become an infrastructure for providing Staking liquidity, and currently offers a derivative vToken for Staking and Polkadot Lease Offering (PLO). It is also a member of the Substrate Builders Program and Web3 Bootcamp. vToken can optimise transactions in multiple scenarios such as DeFi, DApp, DEX and CEX.
vToken can optimise transactions in multiple scenarios such as DeFi, DApp, DEX and CEX. vToken can be used to realise the transfer channel of governance right such as Staking and PLO to hedge the risk of Staking assets. In extended scenarios such as when vToken is used as collateral for lending, the staking proceeds can offset part of the interest and realise low-interest lending.