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Play Merge: How To Get Free Funds From Ethereum's PoS Upgrade

Key Takeaways

  • Developers and Miners Consortium Plans to Fork on Ethereum Blockchain merged later.
  • Doing so will create a new proof-of-work chain that matches the user’s ETH balance with an equal amount of a new coin called ETHW.
  • ETHW may hold some value and can be sold on centralized exchanges that support its trading.

After Ethereum is forked, addresses holding ETH will receive an equal amount of ETHW on the forked blockchain. Ready to merge

Ethereum is moving to proof-of-stake , but miners are planning a proof-of-work fork.

a group of anonymous developers backed by many large ethereum miners are expected to hard fork the ethereum blockchain following next week’s merger, keeping a version of the network running on the current proof-of-work (PoW) consensus mechanism, And the main blockchain transitioned to Proof of Stake (PoS).

fork, commonly known as ETHPoW, will share the same transaction history as the Ethereum main network, but start creating its own blocks after the Merge update goes live. Since the PoW fork starts from the pre-merge state of the Ethereum network, all token balances and smart contracts will also be carried over. This means that everyone who holds on-chain ETH will end up with an equal ETHW balance on the forked ETHPoW chain. ETHW will only work for PoW forks, representing a completely different asset than the original ETH on Ethereum.

For many Ethereum believers, the planned PoW fork is of little interest as an investment. Almost all DeFi, NFT, and network infrastructure protocols have publicly announced that they will support PoS chains, leaving PoW forks in limbo. Once launched, decentralized exchanges on the fork may cease to function, and centralized stablecoins like USDC and USDT will be worthless, potentially leading to mass liquidations and disrupting many DeFi protocols.

While PoW forks must start from the first party, there is one token that may have some value – ETHW. Like the DAO hacker fork that created Ethereum Classic in 2016, a PoW fork may also have some loyal supporters who continue to develop it, creating demand for its token. Conversely, those who don’t believe the fork will go anywhere may want to sell their ETHW tokens after the merger to earn extra. But what’s the best way to make sure you receive ETHW? Which exchanges plan to support Ethereum PoW forks? Read on to make sure you get the most out of Merge and PoW forks. Centralized Exchange

The easiest way to merge is to deposit ETH into a centralized exchange that has announced that it will support PoW forks. The following list is not exhaustive but covers the major exchanges that have made statements:

  • Poloniex has listed an ETHW placeholder token and will list and support trading when the ETHW fork launches , including being credited to a user’s account holding ETHW in a 1:1 ratio to the amount of ETH they hold.
  • Binance, MEXC Global and Gate .io will support the ETH PoW fork and plan to credit user accounts through ETHW at a 1:1 ratio of ETH.
  • OKX will list And support ETHW fork transaction.

BitMEX launched ETHPOWZ22 – a USDT margined ETHPoW linear futures contract.

  • Coinbase , FTX and Kraken said they will review the ETH PoW fork like any other asset and list it for trading when appropriate. At present, Poloniex, Binance, MEXC Global and Gate.io are the most confident to provide users with an equivalent amount of ETHW after the merger. Of these, Binance probably has the largest market, as it is currently the largest centralized exchange by trading volume.

    However, those who are unable or unwilling to deposit their ETH into one of these exchanges prior to the merger have another option. Holding ETH in a non-custodial Ethereum wallet guarantees that your address will receive ETHW on the new PoW fork. adoption

    A non-custodial wallet should be the fastest way to access your ETHW after the merger. While users of centralized exchanges may have to wait hours or even days for their ETHW to enter their accounts, taking control of your ETH funds is the surest way to guarantee that you have access to your PoW fork.

    However, the trade-off is that accessing a new PoW chain requires some technical knowledge and can put users at risk. Those taking this approach need to add the PoW network to their EVM wallet after launch. In MetaMask, you can do this by clicking the network at the top of the browser extension and selecting “Add Network”. Then you need to enter the name of the ETH PoW chain, RPC URL and chain ID (these details will be announced after the PoW chain is launched). The process is relatively simple and similar to adding RPCs to other Ethereum-compatible chains such as Polygon or Avalanche.

    Another consideration for those planning to self-custody their ETH prior to the merger is integration. If your ETH is locked in a smart contract, on a layer 2 chain, or staked through a protocol like Lido, it will not match ETHW on a PoW chain. To maximize the amount of ETHW you receive, it is best to convert your holdings to regular ETH and keep it in your wallet before merging.

    While using a non-custodial wallet will ensure that you will receive PoW fork coins, the limiting factor will be finding a market where they can be sold after the merger. Since all tokens on forked chains other than ETHW are almost certainly worthless, it is impossible to use a decentralized exchange. Those who want to cash out will still have to wait for centralized exchanges to open ETHW deposits.

    To make sure you are prepared, consider setting up accounts in advance on various exchanges that support ETHW. This way, those who want to transfer can transfer their ETHW early and potentially sell it for a higher price.

    Finally, it is crucial to understand the risks associated with merging and any new PoW forks. An often-cited danger is that if an Ethereum fork is launched with the same chain ID as the main PoS chain, transactions may be “relayed”. Here, transactions signed on the forked chain can be verified on the main Ethereum PoS chain, allowing new scams that can drain users’ wallets.

    While such a scam is possible, it is questionable whether a PoW fork would be launched with the same chain ID. However, criminals may try to initiate other forks aimed at stealing users’ PoS ETH. Be very careful before signing transactions on any ETH fork; if in doubt, do nothing. It’s better to miss a few hundred dollars than to lose an entire ETH stack.

    The latest estimate is that the merger will take place between September 13 and 14. If you plan to send ETH to a centralized exchange or your own wallet, be sure to do this in advance. Most exchanges plan to stop ETH trading a few hours before the merger to ensure that user funds are not lost, so don’t leave things to the last minute.

    Whether you stick with an exchange or plan to keep your ETH on your own, please double-check everything and keep it safe before sending a transaction.

    Disclosure: At the time of writing, the author owns ETH and several other cryptocurrencies.

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