Ethereum Foundation receive $1.5M to further ETH 2.0 development
Several DeFi companies are donating a total of $1.5 million to the Ethereum Foundation to advance the Ethereum 2.0 upgrade. Donors of the “Building Together: Execution-Layer Client Ecosystem Fundraise” included Kraken, Compound Grants, Lido, Synthetix, The Graph, and Uniswap Grants. Each of these crypto players donated $250,000 to support the open-source development teams of ETH 2.0.
Since most DeFi projects are built on the Ethereum network, its successful upgrade is significant to them, hence the donations. Kraken, for instance, claims that its clients have staked over 800,000 ETH ($2.6B) to secure the Beacon Chain. The Chain will usher in the much-awaited proof-of-stake consensus mechanism.
Additionally, since the exchange is a crypto industry player, it has donated to projects such as BTCPay Server and Bitcoin. These were “designed to promote education and development related to the cryptocurrencies traded on our global exchange,” Kraken said.
“We believe it’s our responsibility to give back to the open-source innovators who are building the next generation of cryptocurrency,” Jesse Powell, CEO and co-founder of Kraken remarked.
That’s why we’re excited to work with the Ethereum Foundation to ensure developers receive funding from an increasingly diverse range of stakeholders.
Ethereum Foundation on the donation
According to a blog by Ethereum Foundation (EF), developers working on clients that support Ethereum software will be awarded the funds. These are Best, Erigon, Geth, Nethermind, and Nimbus. Since January 2020, the Foundation has spent over $10 million on research and development (R&D) in the execution layer (formerly “Eth1”). Further support from leading entities in the crypto industry has also strengthened the innovative efforts of Ethereum.
Notably, the different groups of developers were necessary to mitigate the risk of depending on a single team. The Foundation will also develop more decentralized funding mechanisms to allow more participants to offer their support. Ethereum Foundation executive director Aya Miyaguchi in a prepared statement stated;
We strongly believe that collaborative efforts and support are the most sustainable way to benefit Ethereum in the long-term. This joint effort to support teams and builders that maintain a diverse set of Ethereum clients is not only impactful but sets a great example,
ETH 2.0 features
The much-hyped ETH 2.0 upgrade seeks to address security and scalability on the Ethereum network and still keep it decentralized. In preparation, EIP-1559, along with several other EIPs (Ethereum Improvement Proposals), were launched on Aug. 5. ETH 2.0 will allow higher transaction throughput and significantly reduced transaction costs.
Additionally, the upgrade will cut Ethereum’s issuance rate from 4 percent to 0.4 percent annually. Coupled with the EIP-1559 fee burn, this will make ETH more scarce, thereby reducing inflationary pressure.
According to the network’s lead developer, Vitalik Buterin, the upgrade could occur by the end of 2021 or in 2022. That said, Ethereum validators have grown to over 200,000 as the ETH 2.0 debut will come bearing rewards for them.