Ethereum (ETH) is set to transition to a Proof-of-Stake (PoS) network by September 15-16 which would see the end of its current Proof-of-work (PoW) chain. This event would eliminate PoW mining from the Ethereum ecosystem.
The total difficulty of the terminal has been set at 587500000000000000000000.
This means that the Ethereum PoW network now has a (roughly) fixed number of hashes to mine. https://t.co/3um744WkxZ predicts that the merge will take place around September 15th, although the exact date depends on the hashrate. pic.twitter.com/9YnloTWSi1
– vitalik.eth (@VitalikButerin) August 12, 2022
In light of such a major update, PoW supporters, especially miners, have decided to keep the PoW chain alive. On Tuesday EthereumPoW (ETHW), the PoW core team recommended ETH holders to withdraw their assets from liquidity providers (LPs) such as Uniswap Sushiswap, Aave, Compound and other decentralized exchanges (DEX).
The core team said it would temporarily freeze ETHW tokens in some DEX LPs and lending protocols after the hardfork to protect user assets.
The core team believes that soon after the Ethereum PoW hard fork, especially for initial blocks, users’ ETHW tokens deposited in LPs will be traded or loaned by hackers and scientists using deprecated and worthless USDT, USDC and WBTC. which would create a “great mess for the community”.
The core team said:
“ETHW Core must make the difficult decision to temporarily block certain LP contracts to protect users’ ETHW tokens until controllers or protocol communities find a better way.”
The team also said the freeze will not apply to staking contracts involving only a single asset such as the ETH2.0 and Wrapped Ether depository contract.
The idea of freezing user resources without their consent didn’t go well with many in the community. Users reminded the core team that freezing hard-coded LP smart contracts in ETH clients is definitely not decentralized.
Conversion of ETHW into a slow and centralized chain, which has no market adaptation.
If you want to protect users from bots that drain ETHW from LP, then you need to take other measures.
Uniswap + AAVE + Compound have 1.8 million ETH in their pools. About $ 108 million of implied value for $ 60 ETHW
– Alberto Rosas (@albertorosasg) August 17, 2022
Others came out calling it a scam and recommended reporting the Twitter account claiming to be the core team of ETHW.
I recommend reporting this account as fake. There is no “official” ETHW core team and they are proposing a hasty change to the code that blocks contracts selected by individuals. No discussion or vote EIP or anything else. This will likely only create a third fork. He cons. https://t.co/4bORc2bTZP
– Tommy Genesis (@ 0xTommyGenesis) August 17, 2022
The PoW Ethereum hardfork also has the support of a major Chinese miner Chandler Guo who claims to be behind a 51% attack on Ethereum Classic.
I’m Chandler Guo, a 51% attack on Ethereum Classic (ETC) is coming with my 98G hashrate https://t.co/9VM6vPa8CS
– Chandler Guo (@ChandlerGuo) July 24, 2016
Most cryptocurrency exchanges and stablecoin issuers have provided their support behind the upcoming PoS-based Ethereum network. However, cryptocurrency exchanges have said that if a forked PoW chain gains ground, they would be in favor of listing the forked token as well, depending on community demand.
ETH’s mining sector is worth $ 19 billion, according to an estimate by crypto analytics firm Messari. With billions of infrastructure at stake, miners should prefer a hard fork as mining other POW tokens like Ethereum Classic (ETC) or Bitcoin (BTC) won’t be as profitable.
Related: Ethereum developers confirm The Merge’s perpetual date
Experts believe that even a forked Ethereum PoW chain will not be as profitable, as most of the community would switch to the new network. Kent Barton, head of tokenomics at ShapeShift DAO, told Cointelegraph.
“While the free market will ultimately decide, it is likely that, following an initial price discovery (and a potential opportunity to sell these forked tokens), these forks of POW will die out. A strategy that is more likely to be successful is mining on other POW chains such as Ethereum Classic. “
Ethereum co-founder Vitalik Buterin was also critical of the PoW fork, calling it an act of greed by a few outsiders. He also recommended that miners switch to ETC.