Ethereum (ETH) surged more than 10% on Monday, May 30, to trade above $2,000 for the first time since hitting a 14-month low last week. The decline came after a 7-block deep reorg on the ETH Beacon chain raised concerns over the stability of the network’s upcoming shift to proof-of-stake (PoS) mechanism. Nevertheless, ETH buyers have returned to the market as some of those concerns were addressed by the system’s developers.
Additionally, it seems that staking and DeFi interest in ETH has remained strong. This is likely due to ETH 2.0- which is seen as being more supportive of DeFi than Ether’s current proof-of-work (PoW) consensus layer. Traders are hopeful that this will help to prevent another crash like the one seen with Terra last month. With ETH’s price remaining relatively stable, it looks like there is still plenty of confidence in the altcoin and its ability to support DeFi in the future.
Meanwhile, as Ethereum 2.0 inches closer to “The Merge” – the long-awaited switch from PoW to PoS – more and more ETH is being locked up in staking deposits. In fact, according to recent data, the total value of ETH locked up in staking deposits has now surpassed 12.7 million ETH, with roughly 10.7% of ETH’s total supply now in ETH 2.0. This is a significant milestone for the Ethereum network, which is currently the second largest cryptocurrency by market capitalization.
On May 30th, the number of staking ETH 2.0 deposit contract addresses has reached 12,711,363, and the staking rate has reached 10.72%, which means more than 10.72% of the Eth currently in circulation has been deposited in ETH2. https://t.co/X0iZNI20FI
— Wu Blockchain (@WuBlockchain) May 30, 2022
The move to a proof-of-stake consensus layer, which as per Ethereum co-founder Vitalik Buterik- could happen as soon as August 2022, is expected to improve the scalability and security of the Ethereum network, and could help to further increase its adoption by institutional investors and individuals alike.
With the merge fast approaching, it will be interesting to see how much ETH is ultimately staked on the Ethereum network.
Price Action
ETH is currently changing hands at $2,004, representing a 10.49% gain on the day. The altcoin printed a V-shaped recovery on the weekly chart after bottoming out near the $1,700 level on May 27. The move higher gathered pace on Monday, May 30, and took ETH towards an intraday high of $2,0005 – the highest level since May 25.
ETH’s rally broadened out into other major cryptocurrencies, with Bitcoin (BTC) jumping more than 8%, Ripple (XRP) gaining 7% and Cardano (ADA) rallying close to 19%. Cryptocurrencies have been under pressure in recent weeks following Terra’s spectacular collapse.
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