The Ethereum hard fork drama is intensifying. How do exchanges and project parties stand in line?

As the merger of Ethereum is approaching (expected to take place on September 10 this year), Ethereum is about to transition from Proof of Work (PoW) to Proof of Stake (PoS), and the debate on the hard fork of Ethereum into two chains of PoS and PoW endlessly.

At present, some exchanges, project parties and big Vs in the circle have begun to publicly "stand in line" against the Ethereum fork, and the "fork war" of Ethereum seems to be imminent.

Exchange's position

Gate.io: Support pre-fork and will open the fork currency exchange function in advance

Gate.io is one of the exchanges that currently publicly supports the Ethereum fork. According to the announcement on its official website, Gate.io will open the function of exchanging ETH for ETHS or ETHW from August 9th to the successful upgrade of ETH2.0. Users can exchange ETH for ETHS or ETHW at a ratio of 1:1. Among them, ETHS represents the token of the new PoS (Proof of Stake) chain; the fork coin 'candy' ETHW represents the token of the PoW (Proof of Work) chain that may continue to exist.

At the same time, Gate.io announced, "If the hard fork fails, ETHS will be automatically converted to the upgraded ETH at a ratio of 1:1. At the same time, all trading markets related to ETHS and ETHW will be delisted."

TRON Poloniex: Support ETH potential fork and launch fork coin futures

TRON Poloniex announced on its official website: "We will fully support this ETH upgrade and potential fork. If there is a fork, Ethereum may be forked into two chains during the upgrade. All users who own Ethereum (ETH) assets on the platform, At that time, all will get the new digital assets after the fork 1:1."

Huobi: Respect the consensus of the community, but do not encourage forks without real innovation and improvement

In the announcement on August 5, Huobi stated that it has noticed the community’s discussion on the hard fork of Ethereum, and respects the consensus of the community on the hard fork, but does not encourage forks without real innovation and improvement, and opposes any form of Premining behavior.

According to Huobi, in the case of protecting the security of user assets, based on an objective and neutral attitude, as long as the assets on the ETH chain (including but not limited to the mainnet currency) that have successfully forked meet the asset security requirements, they will take the lead in supporting users to claim Corresponding position rewards. In this regard, Huobi has formulated five standards to handle asset distribution after the fork:

1. Inform Huobi Global in advance before the fork, and get a clear reply from Huobi Global;

2. By default, it has strict two-way replay protection, that is, transactions on one chain can be invalidated on the other chain;

3. The new chain will not be overwritten or eliminated by the original chain;

4. Transactions have a different format so that all wallets (including lightweight clients) need to be upgraded to support the new chain;

5. The official client software should be released before the activation of the hard fork, and the client software must undergo public testing and evaluation.

In addition, Huobi calls on mainstream platforms in the industry to conduct pre-fork rationality assessments with reference to the above necessary standards, and formulate reasonable and perfect standards.

As of press time, exchanges such as Binance, Coinbase, KuCoin, and Ouyi have not published their opinions on the hard fork of Ethereum.

The attitude of the project party

At present, the mainstream project parties that have spoken out have a negative attitude towards the hard fork of Ethereum.

Chainlink stated, “During and after the Ethereum merger, the Chainlink protocol and its services will continue to run on Ethereum and will not support forks of the Ethereum network, including PoW forks, consistent with the decision of the Ethereum community.”

Sam Kazemian, the co-founder of Frax Finance, launched a proposal in the community against the hard fork of Ethereum. The proposal calls for the Frax DAO to select PoS Ethereum as the only Ethereum network endorsed by the merged Frax stablecoin.

According to the proposal, “Frax is the fifth largest stablecoin in the world, accounting for more than 20% of Curve’s TVL, is a top ten token on Uniswap, and is also a key part of the Ethereum ecosystem. The will of those who have it matters.”

Last week, V God said at the BUIDL Asia conference in South Korea that centralized stablecoins like USDC and USDT will become an important determinant of future hard forks. Now that Frax Finance has started to take a stand, we look forward to the stand of other stablecoins.

At the same time, Curve Finance stated that it is impossible for Curve DAO to forcefully choose one of the forks (too decentralized), the hard fork will inevitably clone DAO and CRV, but only the chain selected by the stablecoin is feasible for Curve DAO of.

The opinion of the big V in the circle

Jack Niewold, the founder of Crypto Pragmatist, tweeted that the PoW hard fork of Ethereum will only become a "ghost town" with no developer activity, no speculation, no media coverage, and no one selling assets for legal currency, because the widespread The consensus is that the merged chain is the real Ethereum.

Jack Niewold discusses the risk of an Ethereum hard fork, calling it a "civil war" for Ethereum. At present, some people in the circle have publicly led the hard fork of Ethereum and continued to support the PoW network.

Similar to V God's view, Jack Niewold believes that the hard fork of Ethereum may depend on stable currency issuers such as USDT (Tether) or USDC (Circle). But Jack Niewold expressed concern about the potential stance of stablecoin issuers on ethereum hard forks.

Because, for these stablecoin issuers, if the Ethereum network forks, they will suddenly face a dangerous problem: there will be two versions of the stablecoin. As an issuer of a stablecoin, you suddenly have two debt obligations for every stablecoin issued.

While most people assume that stablecoin issuers will treat the new PoS chain as the “real” Ethereum network, what if they want to support PoW chains? After all, they have enough financial incentive to do it.

For example, they can short a PoS Ethereum token, announce a redemption on a PoW network, and rake in billions. This could disrupt the new Ethereum network, causing loans to be liquidated, protocols, exchanges, treasuries, etc. to be shut down.

It would be total chaos and could destroy the cryptocurrency market on a large scale. This approach is likely to be illegal, but after making billions of dollars, you can have enough money to hire a good enough legal team to defend you, or buy a private island to avoid the limelight.

However, Jack Niewold believes that it is unlikely that we will accept the fork of PoW, and it is logically impossible. Leaving aside the previously mentioned issue of stablecoins, a PoW fork will become a ghost town. Because the current social consensus is that the merged chain is the "real" Ethereum. So the PoW fork will have no developer activity, speculation, media coverage, and you will have no way to sell your assets here for "real world" fiat currency, not to mention some technical challenges related to the "difficulty bomb" .

Potential Impact of Ethereum Hard Fork

While people are arguing about the Ethereum hard fork, there seems to be a ripple effect in the market. For example, currently stETH has been discounted by 3.7%.

stETH (Staked Ether) is a token obtained by staking Ethereum on Lido, which is linked to the pledged ETH 1:1. stETH tokens are minted when ETH is deposited and burned when redeemed.

The hard fork of Ethereum has just begun, and Cointelegraph Chinese will keep an eye on it.