The Ethereum network is gradually transitioning its consensus mechanism from Proof of Work to Proof of Stake. According to the Ethereum Organization, said upgrade to the “consensus layer” [formerly known as Ethereum 2.0] is set to ‘ship’ by the second quarter of this year.

Along with a series of dynamic and technical transitions, the merger between the Ethereum main chain and the Beacon chain would help the Ethereum network to become even more scalable, secure and sustainable.

Source: Ethereum Organization

Now, after the merger of both networks, Coinbase expects an increase in betting income. As per the exchange, the numbers are set to double. In their recent note, they he said,

“Following the merger of the Ethereum mainnet with the Beacon Chain scheduled for June this year, we should see ETH staking yields increase as the rewards will incorporate the net transaction fees (ex-base) currently paid to miners.”

Specifically outlining the numbers, Coinbase noted,

“We estimate that staking yields could increase from 4.3–5.4% APR to over 9–12% APR.”

Currently, more than 9 million ETH [9,574,866, to be specific] are deposited in the Ethereum 2.0 deposit agreement. Said ATH level was reached a few hours ago, with blockchain data aggregation platform Glassnode bringing the same to light.

At today’s price, that’s nearly $22.625 billion in capital, looking to protect the proof-of-stake network and gain more exposure to Ethereum’s native asset.

Source: glassnode

According to data from StakingRewards, other networks offer much greater rewards to punters. Solana’s rewards, for example, hovered around 5.94% at the time of publication, while Cardano’s reflected a figure of 5.3%. The numbers for Earth, Avalanche, Polkadot and Cosmos were even higher and typically ranged between 8% and 14% each.

Source: StakingRewards

Now, if a two-fold increase in Ethereum rewards actually materializes, as Coinbase says, it would end up attracting more participants. As the number of stakers increases, the amount of Ethereum staked would also increase. In fact, as more and more tokens are blocked, a gradual reduction in supply forms. In addition, burned Ethereum tokens would also increase deflationary pressure and, in the long run, would likely positively affect the asset’s price.

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