Ethereum Fellow: ETH circulation may be reduced by 10 times in 2021.

According to Ethereum 2.0 researcher Justin Drake of the Ethereum Foundation (EF), the circulation of Ethereum may be reduced by 10 times within two years. He says:

“The following are the timelines for some important events (dates may not be accurate):

1. January 2020: Beacon chain online
2. June 2020: ETH 2.0 light client enters the production stage
3. November 2020: ETH 1.0 splits for the first time and enters the fork rule selection phase to confirm ETH 2.0 (conservative estimate is not reduced)
4. March 2021: ETH 1.0 second fork reduced 10 times circulation

Some non-technical events are harder to predict for me: for example, how fast will we get 2 million ETHs (65,000 validators) for the beacon chain online; how fast ETH 1.0 will be willing to go twice Bifurcation. ”

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Earlier, it was reported that once Ethereum's PoW chain was abandoned, Ethereum's circulation will be reduced by about 10 times. Therefore, according to the Staking ratio, the ETH circulation will be reduced from 2 to 0.22.

The PoW chain is unlikely to be abandoned in 2021 because there must be a transition period during which smart contracts and other related content will shift to a sharding-based beacon chain.

It is estimated that a comprehensive fragmentation technology will be launched in 2021, when the ecosystem may take several years to fully transition to a level that can switch the consensus mechanism.

The initial idea was to use a parallel transition between the two mechanisms, and the stokers ensured the security of the PoW chain through decentralized checkpoints.

Once this is achieved, PoW block production will be reduced to 0.6 ETH, but Drake said "conservative estimates, circulation will not decrease."

In addition, the PoW mining difficulty bomb may be put into use around March next year. But this will have to be postponed again, because it is still unclear whether it will reduce the circulation at the same time.

Since Ethereum does not have a pre-designed code for production reduction, the decision-making process is very complicated because the plan seems to change frequently and it is difficult to get clear information.

Therefore, Ethereum researchers seem to be less than happy to answer such questions, presumably because they have not yet determined the details.

That is to say, after the launch of Staking in January next year, how the supply of Ethereum will change, there are still many uncertainties.

The current plan seems to be before 2021 (before switching to PoS completely), Ethereum will not cut production, but unless there is a feasible solution, it is not clear how to complete the switch around 2021.

That is to say, any discussion of circulation should focus on how it affects the security of the PoW chain. This question is difficult to answer because it may depend on the price's response to the security of the current PoW blockchain.

Based on the current design, what is most likely to happen next year is that this new chain that allows users to pledge ETH may not be able to return to the current PoW chain, which raises many unknowns. In the process of entering the Sharding upgrade, Ethereum also entered a pilot phase.

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