Staking’s Crucial Role in Ethereum’s Development
The Ethereum network continues to work on its aim to be the overall decentralized authority that replaces a group of centralised authorities, and a darling for corporate initiatives.
Serenity and Constantinople are Ethereum development phases that would be released soon – may result in hard forks. Later, the network plans to switch to Proof of Stake consensus with Casper as a protocol whose implementation would seek to allow any individual with the means to purchase 32 ETH to be able to stake on the network and get a return of about 5% annually.
Ethereum stands to reward either its users who hold the coin or the people who stake their coin with more rewards because its network will not incur all the overhead costs of centralised authorities while still serving as a capable replacement and even offering additional features.
The staking process is essentially for stakers to get paid to hold. Stakers get to earn a generated interest of about 2% to 5% as well as a collection accrued from the gas that goes through. It is meant to encourage users to lock up their non-staked ether and/or buy more of the token. This is will obviously take a lot of ether out of circulation and the token’s price will probably rise a bit.
Stakers may also feel fulfilled that they are doing the one main task that’s central to keeping the Ethereum network functioning with the needed security and a strong developer base. The security of the network is paramount to all users even as most stakeholders holding ether would agree that they are interested in seeing its price worth more. Hence, if and when the staked amount of ether does not give the needed security, users would stake more to make the network more secure even as they are incentivized.
Finally, achieving this feat of staking to be compensated in transaction fees and interest for helping secure the network will make ether an asset more people can value. The staking process would help answer to the question of why Ethereum has a value as a platform worth billions.