One of the most talked about topics in the crypto market this week was about the potential “fork” to keep the blockchain gives ethereum network (ETH) working with the proof-of-work (PoW) algorithm. This fork is a copy of the original blockchain – which will continue to follow in parallel after The Merge update.
It is from this perspective that users see a scenario where the Ethereum PoW network (forked) will bring with it crypto assets such as Uniswap, Aave, Ethereum itself and all famous collections of NFTs close to zero.
The idea of an Ethereum fork has gained traction in the past two weeks after influential Chinese ETH investor and miner Chandler Guo – who was involved in the fork that resulted in Ethereum and Ethereum Classic (ETC) in 2016 – have proposed fork of Ethereum blockchainnaming the new network “ETH PoW”.
A new world in the midst of “cryptochaos”
After the network fork, all crypto assets, NFTs and protocols present in the original network will be copied to the forked network.
For this reason, the prices of crypto-assets on the PoW network will, at first, be at the mercy of the purest law of supply and demand in the market.
Just like a foreigner waking up in an unknown and lawless land, investors will be faced with a copy of the Ethereum network, totally inhospitable and speculative.
For Vitalik, Buterin, founder of the Ethereum network, the update is unlikely to have long-term adoption.
This means that in the beginning there may be strong speculative movements, but, for Buterin, the network will not be sustainable due to the lack of users.
Care must be taken to verify that the assets that are in your possession will be duplicated to the new network, traded or even exist.
Ethereum PoW’s Big Drop Will Come From Stablecoins
According to the Mercurius Crypto analyst, one of the big problems will be the “several tokens that today are synthetic/derivatives, and that represent positions managed on bridges, which are locked or minted on other networks.”
Castaneda argues that if these bridge protocols are unable to negotiate duplicate liquidity, they will not be able to pay users who trade on the protocol.
“With stablecoins and synthetic tokens theoretically going to ZERO, we are going to see a breakdown in DeFi collateral and money-legos in this new ETHW network, which can cause a ripple effect effectively resulting in a dysfunctional, self-liquidating network,” he says.
For you are confused about the possible HARD FORK of the Ethereum network, and want to know if you can WIN or LOSE with the event, follow a COMPLETE and UPDATED thread on the subject!🧵
— Castaneda (@castacrypto) August 8, 2022
For him, the best way to profit from this fork is to sell the PoW network cryptocurrency on the first trading pair that is opened.
Non-fungible tokens (?) on Ethereum PoW
The pseudonymous trader known as Kaleo told his 530,000 followers that NFT holders could essentially double their collections.
On Twitter’s “Wire”, the trader starts by asking his followers a provocative question: “Do you own an ETH NFT and want a legitimate and free airdrop later this year? Not even. I’m serious. Read this.”
Do you own an ETH NFT and want a legit, free airdrop later this year?
No, really. I’m being serious.
— KALEO (@CryptoKaleo) August 6, 2022
“Hypothetically – let’s say there’s a semi-viable ETH proof-of-work fork that pops up after the merge (for ease of the future, let’s call it pETH). Any ETH NFTs you own pre-fork, you now own on both chains.”
He claims that there will only be a decent amount of volume for NFTs in the forked chain if some decentralized brokerage (DeX) support “pETH” as the community begins to speculate which blockchain will prevail.
For Hasu, Flashbots.net strategy leader and research contributor at Paradigma, a crypto investment firm and web3the “fork” will be a giant retail trap.
after some reflection, here’s my take on a eth pow fork
1. many, including me, have predicted for years that miners would fork ethereum to extract the final juice out of their investment. it doesn’t take nostradamus to see this.
— Hasu⚡️🤖 (@hasufl) August 6, 2022
“Miners, exchanges, traders are all trying to talk about it for their own self-interested reasons,” he says in the aftermath of posts.
For others, speculation on duplicate NFTs is a risk they are willing to take after the likely fork.
I would say the best bet is historical projects like cryptopunks for their “original” status on PoW chain. These NFT nuts are going to go crazy trying to figure out if holding the original vs the new PoS version is the best option for store of value, etc.
— Illusive (@IllusiveTrades) August 8, 2022
“I would say the best bet is historical projects like cryptopunks for their “original” status in the PoW chain. These NFT freaks are going to go crazy trying to figure out if keeping the original version versus the new PoS version is the best option for store of value, etc.
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