The Ethereum 2.0 upgrade, popularly referred to as the “the Merge,” will see the network transition from the current Proof-of-Work (PoW) model to a Proof-of-Stake (PoS) algorithm.
Popular crypto proponent and billionaire investor Mike Cuban has disclosed that he is enthusiastic about the upcoming Ethereum 2.0 upgrade.
Why the Excitement
Speaking to Fortune, Cuban noted the importance of the world’s most used blockchain adopting the PoS algorithm model over the PoW consensus.
According to Cuban, the current PoW has several downsides, especially the heavy reliance of Ethereum miners to solve complex mathematical puzzles before new ETH will be produced.
The PoW model has been under scrutiny in recent times due to the massive amount of energy the activity uses, resulting in a massive clampdown by governments in different countries, including Sweden, Norway, and China.
Environmental activities have also called out cryptocurrency miners for the negative impact of their operations on the global climate.
However, with the upcoming upgrade to the PoS chain, Cuban said these issues will be laid to rest as investors will be required to validate transactions based on the number of ETH they stake or contribute.
The number of staked ETH each user has may likely determine the likelihood of being selected to validate transactions.
Less ETH Issuance
This method of validating transactions, according to Cuban, will result in less Ethereum issuance once the upgrade is complete.
Cuban also stated that Ethereum circulating supply will reduce drastically, as only a few ETH will be issued, which will be based strictly on the number of coins staked.
“Following the merge, the amount of ETH issued is projected to drop by 90%, leading to similar fees to reduce Ether’s supply by as much as 5% a year,” blockchain analytics company IntoTheBlock stated in its newsletter.
Notably, Cuban is not invested in the Ethereum PoS chain, however, he holds a significant amount of ETH and has his money on some of the projects currently built on the Ethereum blockchain.
Cuban confirmed to Fortune that:
“he doesn’t have any money invested in the Beacon Chain, although he does own Ether, along with Ethereum-based non-fungible tokens (NFTs). He has also invested in many companies building on, looking to scale or interact with Ethereum.”
ETH 2.0 Launch Edges Closer
Users’ expectations for the Ethereum upgrade are high, with many eager to shift to the PoS consensus algorithm, which would see them pay fewer fees for transactions.
The planned upgrade is expected to be launched in the summer, with users excited about the development.
As reported, the amount of ETH staked in the Ethereum 2.0 deposit contract has skyrocketed above 11 million ETH.