4 Takeaways from Deposits into Eth2
Data used for this article is as at 30 Nov 2020 and taken from Etherscan and BeaconScan. This article analyzes the deposits made for the launch of Eth2 Phase 0. For a quick primer on Eth2, check out this Reddit post.
All eyes have been on the Eth2 Deposit Contract ever since it was announced on November 4th. As it launches today, we highlight 4 takeaways from the Eth2 deposits so far.
- 80% of required deposits came in the final 2 days
- Top 20 Addresses Make Up <50% of Deposits
- OPSEC Practices by the Community
- Almost $400,000 Tokens in the Deposit Contract
80% of Required Deposits Came in the Final 2 Days
After the announcement, the Ethereum community had until November 24th to deposit a minimum of 524,288 ETH to ensure that Eth2 would begin on its earliest possible date, December 1st.
Deposits trickled in slowly over the first two weeks. Anxiety grew within some parts of the community, as up to the 22nd of November only 54% of the required deposits had been made. Others were clear that many would-be depositors were holding out until the last possible minute to milk the most out of their DeFi yields.
True to the latter’s expectations, deposit volumes grew astronomically on the final 2 days. A total of 421,344 ETH or 80% of the required deposits flew in while 1,392 unique addresses deposited for the first time.
Vitalik’s celebratory post weirdly enough encapsulated the community’s feelings, with us finally breaking through the wall of 524,288 ETH in such an impactful way.
Interestingly, the run up in deposits was precipitated by a sharp rise in ETH price from $471 on November 20th to $608 on deadline day, November 24th. Whether it was a market highly confident of deposits coming in or depositors influenced by the market to finally make their deposits, the causal relationship is left for readers to debate.
Top 20 Addresses Make Up <50% of Deposits
A total of 3,053 addresses have deposited 865,696 ETH as at November 30th, 2020. Of these, the top 20 addresses make up 42.4% of the total.
Is this sufficiently decentralized? One way to benchmark this is to see how it stacks up with mining in Eth1. Looking at the last 14 days, we see that the top 5 miners alone mined approximately 70.5% of total blocks.
Note: some users may split up their deposits across various addresses (while others may combine their smaller portions into a single deposit). As time goes on, we will be able to better identify these collection of addresses.
Notable entities that have been identified or reported include:
- Vitalik with 6,976 ETH or 0.8%
- Staked with 104,224 ETH or 12.0%
- Stake Fish with 65,664 ETH or 7.6%
- Cream Finance with 16,000 ETH or 1.8%
- Bitcoin Suisse (reported to deposit a total of 71,891 ETH)
- CanETH (reported to deposit a total of 21,984 ETH)
OPSEC Practices by the Community
A couple data points point to good OPSEC (Operations Security) practices by the community.
Out of the 3,053 unique addresses that deposited into Eth2, only 168 or 5.5% of them recycled the same addresses they had used for Medalla. Given that Medalla had 5,198 Eth1 addresses depositing into it, we can assume that a large chunk of these Eth2 depositors were privacy-conscious users who used fresh addresses instead of gung-ho depositors who did so with no testing.
The Eth2 anonymous creator of the deposit contract themselves showed a high appreciation of privacy. Depositing into a fresh address via Tornado Cash, they then proceeded to donate the entire leftover amount after contract creation to Wikileaks.
The Tornado Cash deposit pattern was similarly applied by 3 of the first 4 addresses to interact with the Eth2 Deposit Contract.
Almost $400,000 of Tokens in the Deposit Contract
As the deposit contract is used purely for depositing into Eth2 and has no functions allowing withdrawal from it, logically we shouldn’t expect to see any tokens transferred to its address.
Keen observers, however, might have noticed this number on the contract address page. Almost $400,000 worth of tokens are inside!
Why would anybody do this? A simple reason is good ol’ marketing. From a token project’s point of view, the impressions you get from Ethereum users checking out this address page on Etherscan may well be worth the amounts locked up in it. As a point of reference, the address page received 100,000 views on November 24th alone!
This is doubly true if you were planning to burn a supply of tokens anyway. Since the contract doesn’t allow for withdrawals, it is a suitable candidate for token burning.
Looking down the list of tokens, STAKE clearly stands out. A whopping $386,000 worth of STAKE is held on the contract, done according to the project as a “symbolic show of support for Eth2.0”.
In total, 106 tokens were transferred to the contract address of which only 47 have value exceeding $0.
After 5 years of waiting, these are exciting days for Eth2! We’re excited to continue contributing to its growth across the various upcoming phases.
If you’re an Etherscan user looking to explore more of Eth2, we invite you over to BeaconScan. We will add in all the features you know and love from Etherscan to it over time. In the meantime, any feedback is welcome and appreciated as always!
