BETH, or Beacon ETH, is the token that represents a user’s stake in the Ethereum 2.0 Beacon Chain. Beacon Chain was a component in the transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) for Ethereum 2.0, introducing PoS to the Ethereum ecosystem. Its main objective was to validate the effectiveness and sustainability of the PoS consensus logic before its integration into the Ethereum Mainnet. To achieve this, the Beacon Chain operated in parallel with the original PoW Ethereum network, facilitating the testing and refinement of the PoS mechanism without directly affecting the existing PoW network. ^[1][2][3]

Overview

BETH tokens were generated as users deposited Ethereum (ETH) into the Ethereum 2.0 deposit contract. Upon depositing, users received an equivalent amount of BETH tokens, signifying their stake in the Beacon Chain. These tokens enabled participation in the network and provided the opportunity to earn rewards for contributing to transaction security and validation. ^[4]

Beacon Chain

The Beacon Chain, integrated into ETH 2.0, facilitated changes associated with the Proof-of-Stake (PoS) system. Rather than processing smart contract transactions, it supervised Ethereum stakers before their transition to validating actual Ethereum transactions. It managed validators, ETH holdings, formed committees, and recorded votes, while monitoring and incentivizing positive behavior and penalizing malicious activity through reward slashing. The transition from Proof-of-Work (PoW) to PoS involved instructing the Beacon Chain to accept blockchain transactions from the original Ethereum chain, leading to The Merge. This event marked the cessation of mining, block propagation, and consensus logic by original Ethereum clients, transferring these functions to the Beacon Chain. The Beacon Chain's integration with the original PoW chain in September 2022 formalized PoS as Ethereum's consensus mechanism. Following The Merge, a singular PoS Ethereum chain became accessible through Ethereum wallets, eliminating the presence of two separate blockchains. ^[4]