Binance will issue a ‘BETH’ token, which is backed 1:1 by ETH staked in the ETH 2.0 contract that is custodied by Binance.
When you stake your ETH in the ETH 2.0 contract using Binance’s staking service, you will receive a BETH token at a 1:1 ratio. When ETH 2.0 Phase 1 launches, you will be able to redeem your BETH tokens for ETH 2.0 tokens through Binance.
This will allow people to freely trade the BETH token before ETH 2.0 launches. BETH will act similar to an ETH 2.0 futures contract, as the ETH 2.0 tokens will be delivered at a future date when Phase 1 launches. The price of BETH tokens will be determined by the market.
If you stake through Binance, you will receive 5–20% staking rewards ‘based on actual on-chain staking income.’ KYC’d users will also receive an additional reward in BNB tokens ‘equivalent to the average BNB/ETH value of BETH earned as staking rewards by each respective user during the activity period, effectively doubling each qualifying user’s reward.’
Coinbase has also recently announced that they will eventually launch a trading pair for ETH/ETH2. This will likely happen after Phase 1 is launched and will allow users to freely exchange their old Proof-of-Work ETH with the new Proof-of-Stake ETH.
The launching of ETH 2.0 will inevitably cause a chain split, as many miners will want to stay on the original Proof-of-Work chain. Meaning after Phase 1 launches there will be two seperate Ethereum blockchains, the Proof-of-Work chain and the Proof-of-Stake chain.
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