What to Expect From the Launch of the First Phase of Ethereum 2.0

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As the launch for the first phase of Ethereum 2.0 draws nearer, the cryptocurrency community has not failed to make clear their many expectations, particularly with regards to scalability. The first phase, known as Phase 0 (Beacon Chain), is scheduled for release on the 30th of June 2020, and the anticipation from Ethereans and the entire community at large is very visible.

Whether or not Ethereum can deliver in the many different areas it has promised development has been the most reoccurring question and analysts have dished out their numerous analyses on post-ETH-2.0 performance. Tyler Smith, the developer running Onyx testnets for Ethereum 2.0 believes that the launch of the first phase will be the most crucial phase of the entire development process, one that he believes will have a lasting impact on the entire Cryptocurrency community in the same manner that the launch of ETH 1.0 did.

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ETH2.0 Phase 0 mainnet launch will be the most pivotal event in all of crypto since the launch of ETH1.0. People talk about Bitcoin halving events…they are minor league compared to this. Devs feel a lot of pressure already, and we need to encourage them to be brave.

— Tyler.Smith.eth (@R_Tyler_Smith) July 7, 2020

Speaking on significant events that could precede the launch, or that could surface as a result of delay, Smith emphasizes on possible market gains and losses to expect.

“Phase 0 needs to launch mainnet in 2020 or the market will punish Ether prices severely.”

According to Smith, any delay in the launch of the first phase could directly affect Ethereum (ETH) prices and lead to a long-term bearish market for the world’s second-largest cryptocurrency. As we reported earlier, Ethereum fees have been on the rise, with fee charges going higher than Bitcoin’s fee charges and doubling previous Ethereum charges from last year. The bulls have also struggled to push prices up above previous resistance levels and ETH has continued to fluctuate in price movement between previous support and resistance. At the time of this writing, Ethereum trades at $245, a price that had previously traded above in June. Even though Ether seems to be on a path to recovery, and could possibly break previous resistance to test the $250 to $300 mark, many fundamental factors as Smith says, could lead to a massive decline in the coming months.

On the other hand, Smith believes that a successful release is bound to trigger institutional investors and long-term hodlers to go all in on Ether, thereby creating a bull run. Stakers will also not be left out as staking rewards are expected to come in large amounts.

With the leveraging of DeFi reward derivatives, the new wave is also expected to enhance and give DeFi products a boost, although this is largely expected to happen after the completion of phase one.

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ETH 2.0 will give DeFi superpowers. I’m cheating a little since the real superpowers won’t engage until after Phase 1 when transactions become possible. Projects will create superpowered DeFi products using staking reward derivatives.

— Tyler.Smith.eth (@R_Tyler_Smith) July 7, 2020

While the launch date for the next two phases is yet to be fully disclosed, Smith warns that its launch could warrant increased taxes from the United States government. With mining rewards being taxed as ordinary income, increased tax fees could hit the network. To prevent this, Smith can be quoted saying ; 

“Taxes during the ETH2.0 transition will be a nightmare. I’m begging the Ethereum Foundation to make an official statement saying that ETH2.0 Ether is the same as ETH1.0 Ether.”