Ethereum is all set to transition to a proof-of-stake (PoS) network by September 15-16, which will see the end of the current proof-of-work (PoW) approval hardware and eliminate mining from the ecosystem.
Given such a significant upgrade, Ethereum’s PoW advocates, especially its miners, have decided to keep the PoW chain alive. Composed of the core PoW team, EthereumPoW has recommended that Ether (ETH) holders withdraw their holdings from Liquid Pools (LPs) at places like Uniswap, SushiSwap, Aave, Compound and other Decentralized Exchanges (DEX).
The total terminal difficulty has been set to 58750000000000000000000.
This means that the ethereum PoW network now has (roughly) a fixed number of hashes left to mine. https://t.co/3um744WkxZ predicts that the merge will happen around September 15th, although the exact date depends on the hashrate. photo.twitter.com/9YnloTWSi1
— vitalik.eth (@VitalikButerin) August 12, 2022
The core team said they will temporarily freeze EthereumPoW (ETHW) tokens in certain liquidity pools of DEX and credit protocols to protect user assets after the hard fork.
The core team believes that immediately after the Ethereum PoW hard fork, especially for the first few blocks, users’ ETHW tokens deposited in liquidity pools will be exchanged or loaned out by hackers and researchers using obsolete and worthless Tether (USDT), USD Coin ( USDC ) and Wrapped Bitcoin (WBTC), which would “create a huge mess for the entire network and society.
The core team said:
“ETHW Core needs to make the difficult decision to temporarily freeze certain LP contracts to protect users’ ETHW tokens until administrators or protocol communities find a better way.”
The team also said that the freeze will not be applied to collateral contracts that only involve a single asset, such as the Ethereum 2.0 deposit contract and Wrapped Ether (WETH).
The idea of freezing users’ assets without their consent did not sit well with many in the community. One user reminded the core group that “freezing hardcoded LP smart contracts into the ETH clients is ultimately not decentralized.”
Turns ETHW into a slow, centralized chain that doesn’t match the market.
If you want to protect users from bots draining ETHW from LP, other measures must be taken.
Uniswap + AAVE + Compound have 1.8M ETH in their pools. About $108M of implicit value for $60 ETHWADVERTISEMENT
— Alberto Rosas (@albertorosasg) August 17, 2022
Others went so far as to call it a scam and recommended reporting the Twitter account that claims to be the core EthereumPoW team.
I recommend reporting this account as fake. There is no “official” ETHW core team and they are proposing an accelerated conversion to code that freezes contracts chosen by individuals. No EIP discussion or vote or anything. This will probably just create a 3rd fork. Cheat. https://t.co/4bORc2bTZP
— Tommy Genesis (@0xTommyGenesis) August 17, 2022
The PoW hard fork has also found support from a prominent Chinese miner, Chandler Guo, who claims to be behind a 51% attack on Ethereum Classic.
I’m Chandler Guo, 51% attack on Ethereum Classic (ETC) comes with my 98G hashrate https://t.co/9VM6vPa8CS
— Chandler Guo (@ChandlerGuo) July 24, 2016
The majority of crypto exchanges and stablecoin issuers have thrown their support behind the upcoming PoS-based Ethereum network. However, various crypto exchanges have stated that if a forked PoW chain gains traction, they would favor listing the forked token as well, depending on community demand.
The ETH mining sector is worth $19 billion, according to an estimate from crypto firm Messari. With billions of dollars of infrastructure on the line, it is understandable why miners would favor a hard fork, given that mining other PoW tokens such as Ethereum Classic (ETC) or Bitcoin (BTC) will not be as profitable.
Connected: Ethereum devs confirm perpetual date for The Merge
Experts believe that the PoW Ethereum chain will not be as profitable either, as most of the community will switch to the new network. Kent Barton, Head of Tokens at ShapeShift DAO, told Cointelegraph:
“While the free market will ultimately decide, it is likely that after some initial price discovery (and the potential opportunity to sell these forked tokens), these PoW forks will die out.” A strategy that is more likely to succeed is mining other PoW chains such as Ethereum Classic.
Ethereum co-founder Vitalik Buterin has also been critical of the PoW fork, calling it greed from some outsiders. He recommended that miners also move to Ethereum Classic.
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