Disclaimer: This article aims to convey more market information and does not constitute any investment advice. The article only represents the author's viewpoint and does not represent the official stance of MarsBit
Disclaimer: This article aims to convey more market information and does not constitute any investment advice. The article only represents the author's viewpoint and does not represent the official stance of MarsBit.
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Source: Blockchain Outlook
Original Title: Shanghai Upgrades Ethereum to Release New Investment Signals, and Huobi ETH Special Wealth Management is Highly favored
On April 13, the high-profile upgrade of Ethereum Shanghai was finally officially completed in Epoch194048, which was the closing link of Ethereum's transformation from proof-of-work to PoS.
As early as about two and a half years ago, Ethereum started the beacon chain using the PoS mechanism, and users can become validators by pledging at least 32ETH, but it does not support pledge withdrawals. According to incomplete statistics, before the upgrade in Shanghai, there were over 560000 validators and 18 million ETHs locked in on the chain. Therefore, some experts and investors believe that after Shanghai upgrades its opening up of pledge withdrawals, it is likely to trigger a "selling trend".
Now, the upgrade in Shanghai has been completed for about a month, and the expected sell-off and sharp drop have not occurred. ETH prices even exceeded $2100 at one point. How does this data reflect market and technological trends? What new signals have been brought to investment? This article will discuss one by one.
At the market level, the "selling off trend" has not yet arrived, and the PoS consensus value is gradually recognized
The most direct reason for the absence of a "sell off trend" is due to the limited network performance of Ethereum, which requires a queue for withdrawals and cannot be received immediately. According to the evaluation of relevant research institutions, with the current number of active verification nodes in Ethereum, the number of ETHs that can be extracted per day is approximately 57600. At this rate, it will take approximately 300 days for all pledgers to withdraw their ETH.
According to real-time data from TokenUnlock, during the week from the completion of the upgrade in Shanghai to 4 pm on April 20th, a total of 1.33 million ETH applications were filed, and during this period, there were still 655600 ETH deposits, with a net outflow of approximately 674400.
*Image taken from CoinMarketCap official website for ETH related transaction data
*Image taken from the TokenUnlock official website as ETH pledge and withdrawal data
As of the time of publication, according to the latest data from CoinMarketCap and TokenUnlock, the total pledge amount of ETH is currently 18.7 million, far greater than the total withdrawal amount queued of 154200, indicating that the current market is extremely stable and there is no significant outflow of ETH. Meanwhile, the total supply of ETH is approximately 120 million, with a 24-hour trading volume of approximately 3.67 million, which is much greater than the total daily withdrawal volume of 70000. This once again proves that the withdrawal did not have an impact on the market after one month of upgrading.
As JPMorgan Chase has written in its latest report, the launch of Ethereum 2.0 will unveil the PoS consensus mechanism, making pledged earnings a more attractive and stable source of income for institutional and retail investors. From the above data, it can be seen that the market is rapidly developing in this direction, and the "selling trend" has not yet arrived. The PoS consensus value is gradually recognized, and the long-term returns of the secondary market behind it are even more promising.
Technical aspect: Shanghai upgrade and Layer2 complement each other, while Cancun upgrade is expected
After Ethereum is converted into Proof of Rights (PoS), its running process will become more efficient, and the improvement of its own efficiency will bring a cost reducing and efficiency increasing effect to the parallel development of Layer2 expansion. At the same time, it will also bring a higher quality experience to Layer2 users and developers, creating favorable prerequisites for subsequent upgrades.
Moreover, compared to PoW, which is prone to restructuring attacks, PoS has the potential to enhance the security of Ethereum networks against collaborative attacks, as attackers must burn two-thirds of their ETH supply in order to complete similar attacks. The reduction of security costs will optimize the mechanism of the entire ETH, making the development of Layer2 more sustainable.
With the improvement of the Shanghai upgrade, EIP-4844, which has been postponed this time, will also serve as the center and be implemented in the next critical upgrade - the Cancun upgrade, which will expand Ethereum through a modular architecture. It is reported that EIP-4844 or prototype dark sharding will introduce temporary data storage or storage blocks. These storage blocks will allow Rollups to settle transactions and publish data on the underlying layer without competing with other Ethereum transactions, which may reduce Rollups' costs by 10-100 times. Therefore, the transaction cost of Layer2 may be comparable to other first layer networks, and there will be more possibilities for its performance improvement, application expansion, and ecological construction.
Based on the above analysis, the upgrading of Shanghai and the development of Layer2 can be said to complement each other. On this basis, the Cancun upgrade will greatly promote the construction of Layer2 and push the expansion of Ethereum to new heights. From the perspective of technological upgrading, the long-term investment returns of Ethereum are also very considerable.
New opportunity: Focus on long-term investments in Ethereum, and Huobi ETH special financial management is highly favored
Through the above market and technical analysis, it is not difficult to see that Shanghai's upgrade not only did not cause Ethereum to "crash", but also created new opportunities for its long-term development. For crypto investors, choosing a suitable ETH wealth management product to obtain stable and substantial interest income during the long-term holding of Ethereum is a better choice.
According to industry insiders, the ETH special financial management launched by Huobi will be more favored by the market due to its rich product selection, stable and high returns, and flexible redemption methods.
For users who wish to continue pledging ETH, Huobi ETH2.0 provides a minimum pledge threshold for interest bearing wealth management products. With only 0.1 ETH, they can obtain BETH participation in mining by pledging in a 1:1 ratio, with a recent maximum annualized return of 12.56%. The platform will take a daily snapshot of BETH positions, and distribute the proceeds on T+1 day. Users can also exit and redeem ETH at any time. In addition, users who receive BETH can continue to enjoy a maximum of 10% stable annual income through BETH current financial products.
For users who do not want to pledge ETH and hope for more flexible asset allocation, Huobi also provides ETH current financial products. This product sets a tiered deposit threshold and provides the highest demand interest rate for products of the same type across the entire network, with a basic interest rate of 2% and a maximum entitlement of 6%.
Not only that, Huobi also provides 100% secure redemption protection for wealth management users' assets, using the MerkleTree mechanism as a "100% reserve proof", and launching the reserve status check function. Users can view ETH/BETH data at any time through the asset audit page, including asset reserve ratio, Huobi Wallet assets, Huobi user assets, and other data, ensuring transparent and authentic asset security.
This upgrade in Shanghai has brought a new round of long-term positive opportunities for the encryption industry. We hope that investors can seize the opportunity, choose the best asset allocation method, and leverage the advantages of platform products to achieve maximum returns.
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