Ethereum Plummets After ETH 2.0 Transition Update; Founder Details Burning Nearly $7B Shiba Inu

Ethereum slumped to its lowest price in the last six months Monday. While the overall bearish outlook of the market did have an impact, a recent update from founder Vitalik Buterin is said to have played a major role in the crypto's recent performance.

Like other cryptocurrencies, Ethereum has experienced constant trend reversals over the last 21 days. Because of this, it has accrued monthly losses of around 40% with ETH trading at $2,393.28 at 1:11 a.m ET, Coinmarketcap data showed.

A number of factors contributed to the volatility of the cryptocurrency market, particularly, the Federal Open Market Committee meeting where chairman Jerome Powell said the Fed is planning to increase interest rates very soon.

Moreover, the Ethereum network's high transaction fee of around $40 made the ecosystem unsuitable for smaller retail clients.

In an interview with Bankless, the 27-year-old said the highly-anticipated upgrade to a proof-of-stake framework (ETH 2.0) is just halfway done. This came as a surprise to observers as many expected the transition to be completed by the end of 2022.

Vitalik Buterin mentioned that in the coming months, the Ethereum ecosystem will receive improvements on its Merge and Surge modules. Moreover, Ethereum will have the Sharding mechanism that will make the platform more efficient.

The ETH 2.0 upgrade is consists of three phases initially planned to launch in 2019, but it has been pushed further to June 2022 to consolidate the code and protect the network from malicious attacks. While the team is working on each part of ETH 2.0, their particular dependencies determine the release date of the update.

The ETH 2.0 has three elements namely The Beacon Chain, The Merge and Shard chains. The Beacon Chain went live on December 1, 2021, but it is not yet integrated into the mainnet of the platform and will continue to run in parallel until the transition.

The Merge will reportedly take place in the second quarter of this year while Shard chains, based on Buterin's recent interview, is yet to be carried out.

ETH 2.0 is expected to introduce changes in the platform that will help cut energy consumption and computational power. Although this will not directly lower gas fees and make transactions faster, it will feature layer 2 systems including Zero Knowledge (zk) rollups.

These changes can potentially encourage capital to stay within the ecosystem and attract more developers.

Meanwhile, in a separate interview with UpOnly Podcast, Buterin revealed that he had received 505 trillion SHIB tokens in May 2021 from anonymous developers. The meme token was worth around $8 billion at the time.

Anonymous developers thought sending tokens to the Ethereum co-founder would decrease the supply and increase the demand. In May 2021, he sent SHIB and other crypto donations to different charities, including the SHIB worth $1.2 billion at the time to the India Covid Crypto Relief Fund.

He later burned the remaining 90% SHIB tokens because, as he said to a note attached to one of the transactions, "I don't want to be a locus of power of that kind." But how the Russian programmer did this is not an easy process.

Aside from buying a new laptop, Buterin detailed that the tokens were initially in a cold wallet in a form of numbers written on two pieces of paper. He said that he had to combine the numbers to get the private key.

"One of those numbers was with me; the other number was with my family in Canada," he revealed. "So I had to call up my family in Canada and tell them to read their number to me."

"It was scary and fun at the same time," Buterin said. "The scary part is this is more money than I've ever had." After putting the two numbers together, he keyed them into the laptop, adding, "I sent my ETH out by generating a transaction and then on a computer that I bought from Tarjay [Target] for about $300 bucks for just this purpose."

After that, he downloaded a program to generate QR codes, scanned the code using his phone, copied it to the laptop and keyed them into etherscan.ou/push.tx and started sending out tokens to a dead blockchain address, thereby wiping them out. He disconnected the laptop from the internet right after.