Ethereum 2.0-Where the rubber meets the road

Overview: The testnet participation of validators bodes well for Ethereum in the short term. However, the presence of beer and certain alternatives require improvements in the network economics for validators in the long term. As the Ethereum 2.0 specication is still in the development phase, we believe an adjustment to the base reward factor to ensure validators are compensated enough is a good way to begin beyond phase 0 of Serenity. From an investment point of view, the PoS staking incentive mechanism oers a new way of generating a yield. According to our analysis, the annualised yield should start at about 6- 8% at the beginning of phase 0 and decline gradually as more validators become involved. Ultimately, we expect it to stabilise at about 1-2% per annum in the last phase of development