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Smart contracts and Eth 2.0

Etherum Reddit

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Saw the Lex interview with Vitalik, and something puzzles me. Currently, as I understand it, smart contracts and dapps run on chain in a distributed fashion. In the interview Vitalik said that with the upgrade to Eth 2.0 smart contracts will be run off chain, doesn’t this defeat the purpose decentralized processing? Can some ELI5, I’m kinda new to all this and thinking about staking and running a validator.

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