Withdrawal contracts for Ether deployed on Ethereum 2.0 could become available as early as the first quarter of 2021, allowing the launch of the decentralized Eth2 staking service Rocket Pool.
While Phase 0 of the rollout of Eth2 with its Beacon Chain launched on December 1, the 900,000 Ether deposited by strikers will not be available for inclusion until Phase 1.5 – expected to arrive around early 2022.
Last week, Ethereum developer Danny Ryan introduced a new one proposal that would make it possible to “write simple (but expressive) withdrawal contracts today”.
Should the proposal be implemented, he estimates that “80% of the use cases of withdrawal contracts will be fulfilled,” but admitted that the solution will not unlock full functionality:
“There are potentially more advanced features that cannot be built with the simple schema until Beacon Chain reads are implemented, but I would say most designs can be realized.”
Unfortunately, the new contracts won’t allow withdrawals by themselves, but they will allow staking pools to initiate payouts in the future.
Rocket Pool is an Australia-based decentralized strike platform designed to enable hodlers with less than the mandatory 32 ETH to pool their money for strike. In a blog post today indicated the platform is waiting for smart contract withdrawals to be enabled before it can go live.
Founder David Rugendyke explained that since withdrawals are not currently supported in Eth2, “in order to democratize strike in the current environment, projects must use a centralized custodian to control validator withdrawal keys.”
He added that the trust issues that come with this “are not worth sacrificing our core values and risking user deposits.” Rugendyke called Ryan’s proposed solution “a fantastic step” and something “for which we would like to express enormous support!”, He explained in an email to Cointelegraph:
“Withdrawals themselves will most likely not be available until 18+ months, but what will hopefully be enabled soon is the ability to provide an ETH1 smart contract address that WILL receive that withdrawal within 18+ months. So you are. it doesn’t. would be able to pull out in Q1, just provide a withdrawal address which is a smart contract, this would allow for a reliable strike that we want to use first and foremost. ”
Blockchain company Consensys has noted Ryan isn’t the only possible solution. Ethereum developer Jeff Coleman’s “Dirt Simple Withdrawal Contract” proposal also provides a solution for withdrawals. Ethereum strike service Attestant co-founder Jim McDonald’s has another proposal called “Simple Transfers of Excess Balance”.
There are several stop gap measures for the interim period until withdrawals are enabled. Staking company LiquidStake has taken a different approach, allowing strikers to take out a USDC loan on their ETH wagered to provide better liquidity to users. Coinbase has also announced turn off support for Eth2however, they provide the liquidity for users:
“While Eth2 tokens wagered will remain locked to the Beacon chain, Coinbase will also enable trading between Eth2, ETH and all other supported currencies, providing liquidity to our clients.”
In the past, Ethereum co-founder Vitalik Buterin warned users about risks associated with using third-party stakeout services.
This story has been updated with comments from Rugendyke indicating that recordings will be unavailable for 18 months, but Rocket Pool may start plotting due to the new contracts.