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ETH 2 Glossary

Ethereum 2.0

Ethereum 2.0 (also known as Eth2 or Serenity) is the next iteration of the public Ethereum network. The transition features two key changes to the network’s architecture: (1) the introduction of Proof of Stake as the network’s consensus algorithm and (2) the introduction of sharding to scale the network’s transaction processing speed.

Proof Of Stake

Unlike Proof of Work which relies on computing power as the resource to secure a network, Proof of Stake relies on capital (in the form of Ether) as the resource to secure a network.


In traditional blockchain architectures, every node in the network is required to process and validate every transaction. With sharding, the network partitions this system-wide validation into smaller, more manageable clusters to reduce the burden on each node. The result is an overall increase in transaction processing speed


The capital deposited to a blockchain in order to become a validator and participate in transaction validation. In return, users who stake ETH receive rewards in the form of transaction fees and native inflation for their commitment and resource allocation.

Deposit Contract

The deposit contract will act as the one-way bridge between ETH 1 and ETH 2 during Phase 0. Users can elect to migrate their ETH to ETH2 and become a validator on the network via the deposit contract.

Staking Provider

Staking providers streamline the process and minimize the burden for users to become a validator by participating on behalf of the token holder.

Staking Pool

Staking pools are an alternative for token holders who do not own 32 ETH in order to become a validator on their own. Instead, staking pools allow a group of users to combine funds and stake on behalf. Contributors receive rewards pro-rata based on their deposit amount.

Beacon Chain

The beacon chain acts as the backbone to ETH2 as it’s responsible for implementing PoS as well as storing and managing the registry of validators. The beacon chain is set to go live in Phase 0.


Slashing is a set of rules implemented in the network’s consensus algorithm used to disincentivize validators from acting maliciously. If a validator attempts to attack the network and is found out by a “whistleblower”, the attacking validator incurs a penalty based on the severity of the attack. The slashing fees can range from a minimum of 1 ETH to upwards of 32 ETH (the entirety of the validators stake).

Offline Penalties

Offline penalties are incurred when a validator goes offline for a significant period of time. In essence, the penalties are simply the rewards the validator gives up when it’s not participating in the network. Unlike slashing fees, the validator does not incur any loss to their stake with offline penalties.

Phase 0

The first phase in Ethereum’s transition to ETH2. Phase 0 will be a basic implementation featuring the network’s upgrade to Proof of Stake as sharding will not be live in this phase. It’s important to note that Ethereum 1.0 + Ethereum 2.0 will run in parallel and Ethereum 1.0 will continue to be responsible for processing all of the network’s transactions.

Phase 1

The second phase in Ethereum’s upgrade which will feature the network’s sharding implementation. In Phase 1, Ethereum 1.0 will continue to be responsible for processing the network’s transactions.

Phase 1.5

Phase 1.5 is the period used to describe Ethereum 1.0’s migration into the upgraded network. The current plan is to have the Ethereum 1.0 chain run as a shard within the Ethereum 2.0 network. It is at this point that Ethereum 2.0 will be responsible for processing and validating the network’s transactions.

Phase 2

This is the final phase in Ethereum 2.0 which will finalize the network’s migration. In Phase 2, the network will reach a full production state and will enable transfers and withdrawals, implementing cross-shard transfers, execution environments and other critical features necessary to realize the fully envisioned, scalable network of Ethereum 2.0.


A validator is an actor on Ethereum 2.0 who proposes and validates transactions on the network. In Ethereum 2.0, validators will be required to deposit 32 ETH in order to ensure honest participation in the network. In return, validators will be rewarded in ETH as a percentage of their stake.

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