The United Arab Emirates (UAE) is said to lead the MENA region’s FinTech sector with a projected valuation of around $ 2.5 billion by 2022 (which is still not significant by international standards).
Regional and multinational financial service providers have launched digital platforms to improve customer experience (UX), reduce operational costs, and adhere to appropriate data regulations (and other guidelines). According to Clifford Chance, the MENA fintech market is on track to reach a valuation of $ 2.5 billion over the next two years.
Supported by the introduction of innovative fintech projects (including the Emirates Blockchain 2021 strategy and the Dubai Blockchain strategy), the UAE has focused on adopting the latest technologies to grow its economy.
The Emirates Blockchain strategy aims to move around half or 50% of all government interactions to blockchain or distributed ledger technology (DLT) platforms by 2021. Meanwhile, Dubai Blockchain’s strategy aims to to make Dubai one of the first global cities to manage many of its key business processes via blockchain (although Chinese cities like Shanghai and Shenzhen have already taken the lead in this area, especially when it comes to launching a central bank digital currency or CBDC and the innovative Blockchain Service Network or BSN).
Beyond the DLT projects supported by the UAE government, the UAE fintech industry is now focusing on investing in emerging digital platforms, especially those that focus on blockchain-based smart contract solutions. .
Khurram Shroff, chairman of the Dubai-based IBC Group, recently confirmed that his company will invest $ 10 million – a stake of around 20,000 Ethereum (ETH) – in the planned launch of Ethereum 2.0, a major upgrade of the system to Ethereum, the world’s largest blockchain platform for the development of decentralized applications (dApps) based on smart contracts.
The investment would be finalized through a partnership with CanETH of Canada, an “institutional grade” staking service for Ethereum holders. CanETH aims to support organizations that wish to participate in the Ethereum 2.0 launch and ongoing development efforts.
Khurram Shroff noted:
“We are very excited about the concept of ‘Proof of Stake’ proposed for Ethereum 2.0 smart contracts and block 20,000 eth which is a one way ticket to phase 2, this block shows our confidence in ETH2 and our dedication at the Beacon Channel. The greener “proof of work” model introduced in version 2.0 makes it an even more attractive investment. “
It should be noted that Proof of Stake is not really the ‘greener’ proof of work model, as they both work using fundamentally different algorithms. However, the current version of Ethereum, which uses proof of work, has not been able to scale efficiently. Ethereum’s competitors like EOS and Cardano were deployed using variations of the delegated proof-of-stake consensus mechanism which was able to process more transactions but can lead to security concerns.
Vitalik Buterin, one of Ethereum’s main founders, said Ethereum 2.0 could go live by December 1, 2020. But that would only be the launch of “Genesis”, which will require around 16,384 validators. transaction and will require a stake of 524,288 ether (or over $ 260 million at current prices) to lock in the contract. This is necessary before Ethereum 2.0 can be launched securely.
CanETH Pool is a Canadian staking service that was co-founded by Dwain Pereira and Noman Qureshi.
CanETH aims to provide an easy way for average users to become more actively involved in the development of Ethereum 2.0.
“Our goal is to make cryptography more accessible to the public. To begin the staking process, Buterin’s “VB2” address sent out 100 transactions totaling 3,200 units, with a current value of approximately $ 1.4 million. Khurram Shroff’s ‘CanETH’ address is sending three slices totaling 21,984 units for a total of 687 validators, currently valued at around $ 10 million.
Dwain Pereira of CanETH Pool noted:
“The Proof of Work Blockchain model uses more electricity than some countries. These sky-high energy costs are ultimately paid for using fiat currencies, which puts downward pressure on the value of the cryptocurrency. The proof of stake model will therefore be both energy efficient and more lucrative for the players. “
“The blockchain will transform virtually all transactions. We believe that Ethereum 2.0’s decentralized “ distributed consensus ” model will open up multiple avenues for growth and innovation. With environmental concerns associated with previous Blockchain models resolved, their application will become much more widespread. “
While Ethereum 2.0 looks promising, it has experienced a number of technical challenges over the past few years. Ethereum co-founder Vitalik Buterin revealed in 2018 how he made many mistakes while trying to develop scalability solutions for Ethereum. Buterin had gone into detail regarding the complex nature of blockchain-based consensus algorithms.
Ethereum 2.0 is a very ambitious project that will aim to gradually move from proof of work to proof of stake based consensus, something that has never been attempted on a DLT network as large as Ethereum.