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A leading digital assets manager says institutional investors are becoming more optimistic about Ethereum (ETH) after a long streak of capital outflows. In the latest Digital Asset Fund Flows Weekly report, CoinShares finds Ethereum digital asset investment products have seen three consecutive weeks of inflows, breaking an 11-week run of outflows. CoinShares refers to the major Ethereum upgrade to a proof-of-stake blockchain expected to occur next month.
"Ethereum saw inflows for the third consecutive week totaling US$7.6 million. The inflows suggest a modest turn-around in sentiment having endured 11 consecutive weeks of outflows that brought 2022 outflows to a peak of US$460 million. This improvement in sentiment may be due to the increasing probability of the Merge, where Ethereum moves from proof-of-work to proof-of-stake, happening later this year."
Ethereum 2.0 upgrade will merge the existing blockchain from a 'Proof of Work' consensus mechanism to a 'Proof of Stake'. The blockchain is being upgraded to enhance scalability and performance. Some people refer to 'Ethereum 2.0' as 'Serenity' or 'Eth2'.
'Proof of Stake' Vs 'Proof of Work'
'Proof of Work' is the original consensus mechanism for the Ethereum blockchain. In PoW, a miner needs to solve complex problems using high GPU computing power to mine blocks. Once the block is mined and added to the blockchain, the miner receives a reward in the native token of the blockchain. A miner on the Ethereum blockchain will receive ETH as a 'block reward'.
In the 'Proof of Stake' mechanism, token holders validate transactions on the Ethereum 2.0 blockchain. Ethereum 2.0 has adopted 'Sharding' as a 'Proof of Stake' concept. In Eth2, validators on the blockchain need to validate transactions within a specific given time to be eligible for a reward claim.
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