- The Ethereum Foundation has received a $ 1.5 million donation from Kraken and others
- The funds are given to development teams who are committed to the introduction of ETH 2.0
Several DeFi companies are donating a total of $ 1.5 million to the Ethereum Foundation to advance the Ethereum 2.0 upgrade. Donors include Kraken, Compound Grants, Lido, Synthetix, The Graph, and Uniswap Grants. They each donated $ 250,000 to support the open source development teams at ETH 2.0.
Since most DeFi projects are based on the Ethereum network, its successful upgrade is of great importance to them, hence the donations. Kraken claims its customers used over 800,000 ETH ($ 2.6 billion) to secure the beacon chain. The chain will introduce the long-awaited proof-of-stake consensus mechanism.
Kraken has also donated to projects like 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 is our responsibility to support the open source innovators who are creating the next generation of cryptocurrencies,” said Jesse Powell, CEO and co-founder of Kraken.
“That’s why we’re excited to be working with the Ethereum Foundation to ensure that developers are supported by more and more diverse stakeholders.”
According to a blog by the Ethereum Foundation (EF), developers working on clients that support Ethereum software will be given the funds. These are currently Best, Erigon, Geth, Nethermind and Nimbus. As of January 2020, the foundation has spent over $ 10 million on research and development in the Execution Layer (formerly Eth1). Further support from leaders in the crypto industry has also fueled Ethereum’s innovative endeavors.
In particular, the different development groups were necessary to reduce the risk of being dependent on a single team. The foundation will continue to develop decentralized funding mechanisms so that more participants can offer their support. The Ethereum Foundation stated:
“We strongly believe that collaborative efforts and support are the most sustainable way to promote Ethereum over the long term. This collaborative effort to support teams and developers serving a large number of Ethereum customers is not only effective, but sets a good example. “
The much-touted ETH 2.0 upgrade is intended to improve the security and scalability of the Ethereum network while still keeping it decentralized. In preparation, EIP-1559 was published on August 5, along with several other EIPs (Ethereum Improvement Proposals). ETH 2.0 will enable higher transaction throughput and significantly lower transaction costs.
In addition, the upgrade will reduce Ethereum’s emissions rate from 4% to 0.4% per year. Coupled with the EIP 1559 fee burning, this will make ETH scarcer, which will reduce inflationary pressures.
According to Vitalik Buterin, the main developer of the network, the upgrade could happen by the end of 2021 or 2022. The number of Ethereum validators has grown to over 200,000 as the ETH 2.0 debut will be rewarding for them.