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Ethereum 2.0 Sucked Over 20% of ETH out of DeFi Protocols 

As reported earlier today, the Ethereum 2.0 phase 0 launch is well on track after the total ETH staking requirement surpassed the 524,288 ETH target. The milestone was achieved approximately ten hours ahead of the 12:00 UTC deadline today, November 24. 

While it is a big accomplishment for the entire Ethereum ecosystem, the push to meet the ETH stake requirement was met by a significant decrease in the number of ETH locked in DeFi protocols.

According to DeFi Pulse, over 20% of ETH locked (accounting for more than 2 million ETH) were transferred out of different DeFi protocols between November 15, 2020, and November 23, 2020. 

DeFi

On November 15, a total of 8.927 million ETH were locked in DeFi protocols. This amount started decreasing significantly during the period when reports showed that less than 10% of the required target were deposited in the first week. 

After the reports, the staking exercise gained momentum, and more ether was deposited toward the launch of phase 0 Ethereum 2.0. 

At press time, the number of ETH locked in DeFi protocols is 6.8 million, suggesting that a total of 2.104 million ETH were transferred out of these platforms to fulfill the Ethereum 2.0 staking objective. 

However, not all ether that left these DeFi protocols within the period were deposited into the Ethereum 2.0 deposit contract address, as validators have so far staked 635,072 ETH. 

Even though a large number of funds moved out of DeFi protocols, the total value locked (TVL) in the DeFi ecosystem has continued to rise, as ETH price reached over $600 for the first time since January 2018. 

According to the terms of the staking exercise, users who commit their funds to the launch of ETH 2.0 genesis launch cannot withdraw the staked ETH until phase 0 is completed (approximately 18 months). 

Based on this, the DeFi ecosystem will not be seeing the funds transferred towards the successful launch of Ethereum 2.0 phase 0 anytime soon.

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