Two reasons big money will love Ethereum 2.0
Fair warning: it's the week of The Merge, so there's going to be a lot of news surrounding it - and this article is no exception.
We've gone over 'what' The Merge will bring to the Ethereum network a million times - staking, higher transaction speeds, lower carbon footprint, blah, blah, blah.
ENOUGH ALREADY (see gif).
Let's skip the 'what' for today, and look at 'why' it matters. Specifically, why it matters to big money.
First: A lot of corporate heavyweights have adopted ESG criteria into their investing policies.
(Meaning, if it ain't green friendly, they're not investing).
The Merge's 99% reduction in energy consumption solves this.
Second: The ability to earn interest on their ETH holdings.
Over the past 20 years, mutual funds have returned an average of 12.86% per year. From 2018-2021, Ethereum returned more than 15x that, at an average of 194.4% per year.
That's already a VERY attractive value proposition...but crypto is volatile and uncertain - two things big money likes to avoid.
What staking brings to the table is the ability to earn a guaranteed interest rate, of anywhere between 4-18% per year, on all ETH holdings.
And yeah, you can already earn interest on your ETH through the Lido staking mechanism...
But Lido rewards you with 'Staked ETH' (StETH), that can then be traded for real ETH.
Which is like saying 'we can give you a coupon for a free ice cream (StETH), or we could just give you your free ice cream (ETH).'
Obviously we want the real thing, as soon as possible. The less steps between us, and a face full of Ben & Jerry's Half Baked - the better.
...it's the same for institutional investors - the less work there is to do when managing billion dollar investments, the better.
Third: Who else is hankering for some breakfast ice cream right about now?
