When it comes to Ethereum, there is a lot of excitement surrounding the transition from proof-of-work (PoW) to proof-of-stake (PoS). This is a major change for the network, and it has a lot of people wondering what will happen next. There is a possibility that a faction of Ether (ETH) miners will create a proof-of-work (PoW) fork of the network so that they can still keep mining. However, an executive believes that there are ways for ETH holders to take advantage of this upcoming event.
Bobby Ong, co-founder of token information platform CoinGecko, discussed his preparations for the upcoming ETH Merge in a Twitter thread. According to Ong, ETH holders will soon receive airdrops of ETH PoW tokens, and he gave some advice on how ETH holders might take use of this opportunity fully.
First, you'll need to have your ETH stored in a wallet that supports the fork - either an exchange wallet or a hardware wallet. Second, you'll need to make sure you're eligible for the fork - which usually means holding ETH in your wallet at the time of the fork. And third, you'll need to be quick - airdrops are usually first-come, first-serve, and they don't last long!
Exchanges currently committed in supporting the Ethereum PoS chain merge/fork include:
- Coinbase
- Binance
- OKX
- Kraken
- BitMEX
- Poloniex
- Gate.io
- MEXC
- Phemex
- DigiFinex
- CoinW
- etc
Coinbase Announced its support with the ETH PoS chain merged
If you're holding ETH in an exchange that supports the fork, then you're in the simplest and best position to receive the fork airdrop. This is because the exchange will automatically credit your account with the forked tokens. There's no need to do anything on your end except hold your ETH in the exchange.
However, if you're holding ETH in a hardware wallet, you will still be eligible for the fork airdrop. You will just need to take a few extra steps in order to claim your forked tokens. First, you'll need to export your private key from your hardware wallet. Then, you'll need to import that private key into a wallet that supports the fork. Once you've done that, you'll be able to claim your forked tokens.
So, which is the better option? It really depends on your personal preference. If you're the type of person who likes to be in control of your own private keys, then holding ETH in a hardware wallet is the way to go. However, if you're more comfortable leaving the management of your ETH to an exchange, then holding ETH in an exchange is the best option for you.
The CEO also urged traders to bridge their tokens back to the ETH mainnet, unwrap their Wrapped Ether (wETH), and remove their ETH liquidity from decentralized finance (DeFi) protocols in order to maximize the amount that holders can receive.
While Ong may be entitled for all of the forked tokens as he noted, he will not claim all of the airdrops because some of them may be fraud efforts to obtain access to his signature and keys. This brings us to the point that it is much safer to receive from an exchange than in a non-custodial wallet such as Metamask or Coinbase Wallet.
So, What's the Big Deal with the Upgrade?
Ethereum, the world’s second-largest cryptocurrency by market capitalization, is set to launch its long-awaited upgrade to a proof-of-stake (PoS) consensus model on December 1, 2020. The switch from the current proof-of-work (PoW) consensus model will result in a number of significant changes, including reduced energy consumption, a lowered ETH issuance rate and increased staking rewards for holders.
As a result, it comes as no surprise that the majority of the community is enthusiastic about the improvement.
However, there is one group of individuals that are dissatisfied: miners.
Ethereum miners say that the blockchain modifications would render their multimillion-dollar operations outdated, and they have chosen to take a stance.
Groups are developing with plans to fork the Ethereum blockchain at the time of the Merge and establish a rival token, EthereumPoW. (ETHW).
