The Genesis of Eth 2.0 and its Different Phases.

Samuel Atta Amponsah
5 min readNov 24, 2020


In this post, I will outline the upgrade coming called Eth 2.0 and its different phases. I will try my best to explain it all in simple terms that even a beginner can understand.

Ethereum Evolution :

Ethereum’s major network upgrade, dubbed Ethereum 2.0 or Serenity, will bring with it Sharding, Proof of stake, a new virtual machine (WSASM), and more. It’s more important to understand that this upgrade will not take place at a single point in time — instead, it will relinquish in phases. This piece attempts to be a reference point for these phases and what each one includes.

  1. Sharding: sharding will upgrade the existing Ethereum blockchain (which you can imagine as on a one-lane road) to a blockchain made of 64 parallel parts, know as shards. Think of these 64 shards as a 64 lane highway. Each lane has the same capacity as the original single lane road, which is Ethereum 1.0.
  2. Proof of stake: Ethereum 2.0 will move Ethreuem from proof of work to the mentioned. In a nutshell, proof of work is a system where people waste electricity, providing they have done work ad put effort/money into securing the blockchain. It makes it hard for one person to overtake the network because it would be exorbitant to burn all that power. Proof of stake requires people who secure the platform or validators to put up ETH as collateral as a stake on the establishment. If the representatives establish the network lanes, they will earn ETH, and if they behave irresponsibly, they risk penalization in the form of losing some of their stakes ETH (known as slashing). Much like proof of work, this makes it hard for one person to overtake the network because they would need to buy numerous ETH, making the attack unrealistically expensive.

ETH 2.0 Phased

Eth 2.0 is rolling out in multiple phases these are:

Phase 0: this is the introduction of Proof of stake and the creation of the Eth 2.0 Blockchain. It’s the backbone of the ETH 2.0 system. Imagine it like the foundation upon which we engineer the 64 lane road. It is a broad flat foundation of rock, and they do not connect it to the existing Ethereum 1 road. While no cars are driving on this chain yet (there are no transactions on this chain), people can move from the Ethereum 1 road and onto this new road. The nodes moving over are security guards, making sure that the foundation of the road remains secure and ready for upgrading once the developers are ready to build out the rest of the road.

That is what the deposit contract and staking talk elaborate. You can move 50 Eth in the deposit contract, which will transfer your 50 ETH to the foundation of the ETH 2.0 road (known as the beacon chain), where you can stake your Eth and keep the road secure and ready for a future upgrade. In return, these people get paid out of variable% interest on their 50 ETH for their service.

Phase 1: this is the construction of 63 of the lanes on the new road. However, these lanes aren’t open to the public yet. Their principal usage is by public transport nodes that are still using the Ethereuem 1 road but, if people use public transport (a layer solution known as roll-ups), we can decrease the congestion on the Ethereum 1 road.

Technically, there are 63 new shards connected to the design of the beacon chain. These shards aren’t available for transactions yet, but they hold data on the state of the Ethereum blockchain. Transactions that use the layer two scaling solutions known as roll-ups can use this data, reducing the load on ETH 1.

Phase 1.5: This is when we say goodbye to having two separate roads. The Ethereum 1 lane connects with the Eth 2.0 road, creating a 63 lane highway. The other 63 network lanes are still close to specific traffic (specifically which principal task is to determine traffic). Now that care is moving on the new road, the security guards(ETH 2.0 validatory) are now free to get back in their cars if they want to ( or they can keep staking), and now ETH is no longer created to pay for the security of the old road.

It sees the Ethereum 1 chain before a shard on ETH 2, moving it over to proof of stake and connecting it to the other 63 network shards.

The other shards cannot take many transactions, yet such as complex transactions that interact with smart contracts (these are the transactions you send when using Defi apps like creating a Maker Vault). Now that the Ethereum 1 chain has moved into it own ETH 2 network shard, this security is conditioned by proof of stake, and nodes no longer need to mint new ETH to pay miners to secure the network that happens under the proof of work and a result, the inflation rate of ETH will drop from around 5% annually to speculatively 1% yearly (or possibly even going negative thanks to the proposed fee burn and free-market upgrade EIP- 1559).

Phase 2: this is the grand opening of all 64 lanes of the highway. All or almost all traffic will use any network lane ( Specificities still have not been determined. Certain transactions may have to use specific network lanes). The maximum capacity of the Ethereum highway will increase approximately 64x over its current volume — and not including the effect of public transport ( layer two scaling solutions) in increasing the number of people who can use this highway in their daily lives!

Also, there is no theoretical limit to the number of lanes the network highway has. Deploying the regular tweaking of precise parameters, and as technology advances, we may add more lanes to the network highway if we deem it necessary.

In the last phase, for a feature-complete ETH 2.0. All or more of the 64 shards will permit the execution and transactions of intelligent contracts (we can use not all for many transactions. This is yet to be determined). Another feature that will ship with this phase is the introduction of e WASM, which will replace the Ethereum Virtual Machine (EVM). Hence, allowing developers to code smart contracts in languages other than solidity, thus soaring the number of people who can build on Ethereum. Finally, phase 2 will also introduce execution environments. Unfortunately, this goes beyond my current level of knowledge and expertise but allows for more customization and possibilities for developers?

The All-Important Question: when?

I realize I didn’t specify in any timelines above, as there aren’t any official ones. However, I’m concerned to keep in mind that the development of the different phases is happening in parallel, meaning that just because phase1 hasn’t shipped yet doesn’t mean that phase 2 isn’t already under development. Each sequence phase is currently in its genesis. Meaning a delay in the first or second may not delay the release of the final. I have also read somewhere that phase 0 is the most complex and expected to lunch on 1st December. If I had to speculate, I would expect two years per upgrade, putting the full phase 2 launch release between late 2023 and 2025. But like literally everyone in the ETH community, I honestly do not understand the impression the real timeline will elaborate. Also, it’s far-reaching to emphasize that Ethereum is not entirely reliant on ETH 2.0 for scaling, as we have many other scaling solutions live now or releasing soon, some of which will benefit from the early passes of ETH 2.0 as I mentioned above.



Samuel Atta Amponsah

Sammy is a 23yr old avid reader and productivity junkie with an unquenchable curiosity and has an array of interests he writes about on Reddit and medium.