After switching to PoS, Ethereum emissions will be reduced by 2 times

The co-founder of the network of the largest altcoin said that the annual release of tokens after the transition to Ethereum 2.0 will belimited to 2 million ETH per year, less than half of the current figure.

Ethereum blockchain chief Vitalik Buterin recently shared several important aspects of the plan for the transition to ETH 2.0 in his latest podcast interview with POV Crypto Internet Money.

Buterin said that the release of tokens inEthereum 2.0 will be limited to two million ETH per year — This is less than half of the annual token issuance for Ethereum, which now stands at 4.7 million per year — and will probably only cost hundreds of thousands.

Discussing some events, Vitalik Buterin also explained why they decided to switch to the Proof-of-Stake protocol. Speaking about this updated consensus mechanism, Vitalik said:

«One of the reasons we doProof-of-Stake is that we want to significantly reduce the issuance of [new tokens]. So in the specifications for ETH 2.0, I think we calculated that the theoretical maximum supply would be around 2 million per year if literally every [network user] participated.

Ethereum developers have been actively working to create the Ethereum 2.0 platform, which will undergo a major transition from the Proof-of-Work (PoW) consensus model to the Proof-of-Stake (PoS).

Two weeks ago, Ethereum developers alsoThe Ethereum 2.0 Topaz testnet was launched as planned. Moreover, immediately after mining the genesis block, the Ethereum test network soon reached 20,000 validators.

Additionally, current testnet participationinvolves adding 100’000 ETH per year. In addition, Buterin also said that the overall circulating supply may decline during times of high-volume transactions.

“There is this basic parameter of the fee charged by the protocol”, — Buterin explained.

The Ethereum 2.0 Stake Remuneration Calculator recently became available after switching to Proof-of-Stake.

Another major update for Ethereum 2.0

This will be another major update to the Ethereum 2.0 blockchain network. In response to network activity, the block size will be changed instead of the size of the commission.

Buterin notes that:

“Instead of transaction fee volatility, we will have block size volatility.”

It is reasonably expected that this approach will help.overcome some of the existing problems, such as accurately predicting the optimal amount of transaction fee with a relatively long transaction processing time.

Ethereum (ETH) is currently trading at 75%higher than the beginning of the year. At the time of publication, ETH sells for $ 197 with a market cap of $ 22 billion. During the correction of the cryptocurrency market in March 2020, the price of ETH fell about $ 100, but in the last 40 days it has shown steady growth.

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