Time for an update on Ethereum. The network appears to be moving towards a mature decentralized financial industry with nearly a quarter of all ethers locked in smart contracts.
History lesson about DAO
Step aside, anyone who has been delving into cryptocurrency for some time will probably remember the DAO hack. If not: in mid-2016 there was a smart contract with a lot of ethers locked into it. This contract was exploited and many ethers could be stolen.
Part of the Ethereum community felt that the blockchain needed to be rolled back so that the coins could be recovered. But another group totally disagreed and shouted: ‘code is code and it is sacred.’ The disagreement between these two groups caused a hard fork, the blockchain split into Ethereum and Ethereum Classic. The latter coin represents ‘code is sacred’.
DAO stands for decentralized autonomous organization and that is an organization that is run by the rules encoded in smart contracts. A DAO is therefore only as strong as the written code.
Just as much as in 2016
Anthony Sassano of ethhub says the amount of ether now locked in smart contracts is comparable to what was seen at the mid-2016 DAO event. 23% of all ETH).’
This chart is absolutely incredible.
The amount of ETH in smart contracts is now at a similar level to what it was during The DAO event (around 23% of all ETH).
In June of 2016, that was ~$230 million worth of ETH.
Today, it is ~$63 billion worth of ETH. pic.twitter.com/DGpeKvL3Hm
– Anthony Sassano Ξ ???????? (@ sassal0x) June 13, 2021
He added that it was worth $230 million at the time, the then Ethereum price was 13 dollars. Today, that amount is worth a whopping USD 63 billion.
The chart shows the first spike in 2016 when the ethers poured into the DAO. Sassano also said there are more than a million ethers tied up in the Binance Smart Chain bridge contract.
Beacon Chain is largest contract
Many of those ethers are locked into the Beacon Chain deposit contract. According to the ETH 2.0 Launchpad, there are currently 5.42 million ETH wagered on the blockchain.
At current prices, this is estimated to be about $13.5 billion. It also represents 4.65% of the total supply and about a quarter of all ETH locked in all smart contracts on DeFi platforms.
You don’t do it for nothing, you get a reward for that. But the more users lock in their ethers, the lower the reward gets. Currently, you get 6.7% through the Beacon Chain deposit contract. You must secure a minimum of 32 ethers to participate. At 6.7% you get more than 2 ethers paid out per year.
Source: https://launchpad.ethereum.org/en/
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The network has 165,000 active nodes, a figure that has increased by 250% since early 2021.
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