Monday, 15 April 2024

Crypto News

3 reasons why Ethereum POW hardfork tokens won’t gain traction

3 reasons why Ethereum POW hardfork tokens won’t gain traction

Ether (ETH) is the second largest crypto by market capitalization and the absolute leader in decentralized applications by deposits. Becoming a victim of its own success, the network experienced a fee hike in November 2021 when the average transaction costs surpassed $50. 

That’s precisely why the Merge is a critical step to implementing a fully functional scaling solution. The confirmation of a transition to a proof of stake (PoS) consensus was the main driver for the rally toward $2,000 on Aug. 15.

Investors were partially excited about the reduced issuing schedule and likely a transition to a deflationary scenario, but there’s also the expectation of upcoming forks. As a result, hardforked coins may be awarded to Ether holders on different blockchains, even though there’s no guarantee those will find traction or sufficient liquidity.

From one side, there’s the temptation of free money and even bonus non-fungible tokens (NFTs) as the forked chain will initiate with the same state of the original Ethereum network, meaning each address will hold the exact same contents in terms of tokens and transaction history.

On the other hand, there’s also a sense of disappointment after Ether’s agonizing 29% correction that took place after the $2,000 resistance proved to be more challenging than expected. It’s possible that as investors realized that the practical utility of the forks would be much lower than anticipated, the exuberant expectation of free money dissipated, and reality kicked in.

ETHPoW, for now, is a possible new chain backed by proof-of-work (PoW) miners. Some exchanges have initiated futures trading for the fork chain native asset, ETHW. Markets seem to have given their opinion, as the contract is now trading below $55 at Poloniex and

There’s no backing and oracle support for forked stablecoins

The two leading stablecoins, namely USD Coin (USDC) and Tether (USDT), have officially confirmed intentions to exclusively support the Ethereum Foundation-backed Merge chain. Cointelegraph previously reported that given that two stablecoins dominate, the issuers’ support “should result in a smooth transition for Ethereum.”

Meanwhile, the core team behind EthereumPoW (ETHW) said they would temporarily freeze tokens in certain liquidity pools of DeFi applications to protect user assets after the hard fork.

The idea of freezing users’ assets without their consent didn’t go well with many. Some users called the Twitter account behind EthereumPoW a…

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