Nearly $10 billion – roughly 3.2 million Ether tokens – have been deposited on decentralized finance (DeFi) platform Lido Finance for an Ethereum overhaul.
As Bloomberg reported Friday, April 15, the long-gestating software upgrade — known as Merge and due later this year — is designed to deliver sweeping reductions in power consumption, improve performance and provide better returns on the popular blockchain.
Read more: Ethereum 2.0 project enters home stretch, promising massive scalability by summer
The betting is done using a practice called “staking,” which gives owners a way to earn passive income without selling their tokens. Staked coins can help validate transactions and secure the network in exchange for rewards, based in part on the number of tokens minted and fees collected.
See more : What is staking?
Lido, launched in late 2020, beat out the biggest players in the industry, according to the report, by offering Ether owners an incentive in the form of a token called stETH, which is tied to the value of the cryptocurrency and can be used on other decentralized applications.
The report cited data from blockchain tracker Nansen, which said there were over 700,000 stETH sitting on the Aave decentralized lending project.
Depending on how much risk an stETH holder is willing to take, the rewards for staking borrowed Ether against stETH on Aave could – in theory – have no limit, according to the report. The wrong side? If the merger is delayed and people holding stETH rush to exchange their coins for ether, the token may not be indexed, which could cause its value to plummet.
The project’s architects said it would be ready to move on by the summer. As PYMNTS reported last month, the project started in 2016 and experienced extreme delays that nonetheless failed to dampen enthusiasm for a new Ethereum.