ETH 2.0 is among the most awaited crypto upgrades at the moment.
This upgrade, expected to deliver lower gas fees and improved scalability, is highly anticipated as demand continues to strain the network. Ethereum’s IT team has been working diligently for over two years to bring this significant transformation to life.
However, the term ETH 2.0 doesn’t fully capture the scope of these upgrades. As a result, the Ethereum Foundation decided to retire this name in favor of one that better reflects the changes being implemented on the blockchain. This post explores the rebranding, its reasoning, and its effect on ETH’s market price.
Ethereum 2.0 Has Been Rebranded to Consensus Layer
Ethereum announced via a blog post that it would rename its upcoming upgrade from ETH 2.0 to Consensus Layer. The developers stated that this rebranding aimed to provide terminology that better reflects the technological advancements being made to the blockchain.
With the change, ETH 1.0 is now called the Execution Layer, while ETH 2.0 becomes the Consensus Layer. This renaming aligns with Ethereum’s vision of uniting both mechanisms into one blockchain structure.
The Consensus Layer, which will utilize the Proof of Stake (PoS) mechanism, is a long-awaited upgrade replacing the energy-intensive Proof of Work (PoW) consensus. This transition will enable validators to verify transactions by staking their ETH, eliminating the need for mining. The upgrade is expected to roll out by June 2022, barring further delays.
What is the Reason for the Change of Name?
The decision to rebrand was driven by two main factors:
1. Reducing Misconceptions: Many users mistakenly believe that ETH 1.0 will cease to exist once ETH 2.0 arrives or that ETH 2.0 is a completely new blockchain. The rebranding clarifies that both the Execution Layer and the Consensus Layer will form parts of the Ethereum blockchain.
2. Minimizing Scams: Ethereum sought to reduce scams that exploit user confusion about the upgrade. Scammers often trick users into believing they need to “upgrade” to ETH 2.0, resulting in financial losses. The name change aims to mitigate these fraudulent activities.
Did the Name Change Have an Impact on the Price of ETH?
The rebranding announcement had no significant impact on ETH’s price. While ETH suffered during the 2021 market crash, losing about 40% of its value, its price has shown a gradual recovery.
Currently, ETH has yet to reclaim the $3,000 mark, leading to speculation about a potential bear market. As for the Consensus Layer upgrade, uncertainties remain regarding its timeline. Although delays have occurred due to technical challenges, Ethereum developers assure the community that the project is still progressing as planned.
The crypto market continues to watch closely for updates on the Consensus Layer and its eventual integration with the Execution Layer.
