The first exchange to “bet” that Ethereum will split into 2 blockchains after The Merge

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2022-08-06 01:45:58

Poloniex said it will list 2 special tokens to prepare for the scenario where Ethereum will split the chain because of The Merge.

The first exchange to “bet” that Ethereum will split into 2 blockchains after The Merge

On the afternoon of August 4, cryptocurrency exchange Poloniex announced that it will create two special tokens to represent two different versions of the Ethereum chain that may appear after The Merge event. Poloniex is the first exchange to have this move.

For details about The Merge event as well as the “conspiracy theory” Ethereum will be split by miners to continue to mine, readers can review the article below.

Returning to Poloniex, the exchange will allow users to convert their ETH into 2 special tokens, ETHS and ETHW. Specifically:

  • ETHS is the coin that represents the Ethereum chain using Proof-of-Stake;
  • ETHW is the coin that represents the Ethereum chain using Proof-of-Work;
  • The conversion rate will be 1:1 for both ETHW/ETH and ETHS/ETH pairs;
  • The exchange will consider adding other trading pairs in the future;
  • ETHS and ETHW will only exist on Poloniex, cannot deposit/withdraw to external wallets.

Before The Merge event, Poloniex will capture the balance of all accounts containing ETHS. After Ethereum conducts this upgrade, if a chain split occurs, the exchange will convert ETHS to ETH using PoS at a 1:1 ratio for all users.

Meanwhile, the Ethereum chain using Proof-of-Work with the highest hashrate will be chosen by Poloniex as the “mainstream” blockchain to be converted to ETHW. It can be seen that Poloniex has also prepared for the scenario where more than one Ethereum chain using PoW appears.

Conversely, if The Merge happens smoothly and no unit splits the Ethereum chain to retain Proof-of-Work, ETH will continue to be traded normally on the exchange, two ETHS and ETHW coins will be eliminated. cancel.

Up to the time of update, only one side, ETHPoW, has announced that it will fork Ethereum to maintain mining activities through the Proof-of-Work mechanism, and call for “donations” for product development. This project is being backed by Chandler Guo, a “whale” in the Chinese-speaking crypto mining community.

Poloniex used to be one of the leading exchanges in the field of cryptocurrencies, having roots in the West. However, after many wrong moves by the management team, the position of the exchange declined significantly in the period 2017-2020, only to be acquired by TRON founder Justin Sun in 2019 and turned into a part of the exchange. of the TRON ecosystem since then.

Justin Sun claims to hold more than 1 million ETH and if a hard fork occurs in two chains, TRON will donate a certain amount of ETHW to help the new project develop the ecosystem.

Despite being the founder of an entire cryptocurrency ecosystem, Justin Sun is said to hold a large amount of ETH and is actively involved in farming on Ethereum’s DeFi protocols.

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