Arguably the largest event since the creation of Bitcoin, Ethereum successfully merged its beacon chain to become fully proof of stake less than a month ago. Not only was this huge for the Ethereum community, but The Merge was the largest decarbonization event in history, reducing the world’s energy consumption by 0.2%. Since The Merge occurred, however, Ethereum has fallen in price. Investors are starting to ask: Now What??
Benzinga sat down with Jaydeep Korde, founder and CEO of launchnodes, to gain insight into Ethereum’s transition to proof of stake, and what this could mean for Ethereum moving forward. Launchnodes is a staking as a service provider, allowing institutions and individuals to easily set up an Ethereum validator node on its new proof of stake network.
BZ: Ethereans boast that ETH proof of stake is more secure and decentralized than ETH proof of work. Why do you think this is?
“There were 11 proof of work miners that did 99% of the work of securing and decentralizing Ethereum as a proof of work network. There are over 400,000 validators now doing that same work – all identifiable in chunks of 32 ETH running on specific nodes that can be examined and “dashboarded” within an inch of their new proof of stake lives.” - Korde
BZ: Why is it important for users to act as validators on Ethereum's proof of stake consensus model?
“This is important because the Ethereum network needs solo stakers to truly decentralize Ethereum. Launchnodes helps solo stakers use infrastructure they own on the cloud (the nodes run in our clients’ own cloud plane) or in their own data centers.
As a solo validator, you:
- Receive maximum rewards directly from the Ethereum protocol for keeping their validators properly functioning and online.
- Experience no single point of failure with the hardware (that includes public if you are running the nodes in your own account and not as staking as a service providers) and therefore add to the security and decentralization of the Ethereum network.
- Don’t need to trust an external entity, and never give up control or share the seed phrases, passwords and keys that connect you to your funds” - Korde
BZ: How is Launchnodes uniquely positioned to succeed in a post-merge environment?
“Launchnodes is uniquely positioned by turning our clients into solo stakers, thus further decentralizing the Ethereum network and by acting as a bridge for traditional finance to easily build their own technical staking infrastructure with their own engineering teams.
We provide the “Lego bricks” that enable staking both on public clouds and on our clients’ own infrastructure, so they keep all the returns and physical and technical ownership. Staking needs someone who wants to sell the shovels and the jeans and not simply be a quasi-financial custodian as so many staking-as-a-service providers are. That is why we exist – to provide the shovels. We have been called the “HashiCorp of staking”. For those who work at scale or hyper scale building useful software and putting it in production, that is the highest compliment.” - Korde
BZ: What implications does The Merge have for institutional adoption?
“The financial mechanisms currently utilized by the mainstream banking and institutional investor industries are inefficient. At its core, Ethereum and Ethereum Layer 2 solutions provide much better functionality.
The Merge has incentivized long term investors with huge potential payoff, with the potential to earn up to 12% on yields via ETH staking, leaving opportunity for institutional investors to make venture-style investments.
In order to play the game, institutional investors need to build some muscle around what it takes to solo stake. Many of these institutions are working out what the mandate is for their organizations to legally be allowed to stake and optimize their financial returns – which is to say, to pull and run their own nodes. This is what Launchnodes solo staking services provide.” - Korde
While Ethereum’s token issuance is now lower than Bitcoin’s, the ramifications have yet to be seen in regards to token price. That being said, most validators are still bullish on The Merge greatly impacting Ether’s price. Many validators stake with a long-term time horizon, so they are more concerned about fundamental changes to Ether’s tokenomics than week-to-week price movements.
Needless to say, Ethereans remain bullish on the impact of The Merge––not only regarding Ether’s price, but the Ethereum network as a whole.
