A war is coming to Ethereum…but for those who HODL Ether this war may just put some
extra money in your pocket. The Ethereum merge is coming and there are rumors that
it’s going to be contentious, leading to a fork. Just like in the modern world war isn’t good…but
it can bring economic prosperity to those who know how to play the game.
So are you ready to level up…because it’s time for Chico Crypto!!
Yup, the Ethereum merge is knocking on the doorstep. Last week the Ethereum foundation posted
this blog “Goerli/Prater Merge Announcement” and the blog states “After several devnets, shadow
forks and merges on deprecated testnets, Sepolia was recently transitioned to proof-of-stake. Now,
only one more testnet remains: Goerli, and its associated Beacon Chain, Prater.
So when is this happening? Well the blog states “the Goerli/Prater merge
will happen when Goerli hits a total difficulty of 10,790,000, expected between August 6-12, 2022”
In just a couple days this merge will go down. Why is this important? Well because it’s the
final step before the Ethereum mainnet merges with the Ethereum proof of stake beacon chain.
This means proof of work and miners will go bye bye into the Ether.
In the blog under the FAQ and question “wen merge” the blog states “Assuming no issues
are found during the Goerli/Prater merge, once clients have feature-complete releases,
a slot height will be chosen for the Bellatrix upgrade on the mainnet Beacon Chain
and a total difficulty value will be set for the mainnet transition. In other words, soon!”
So when!? Well in Mid July, Ethereum core devs had a call on just this
and Ethereum core developer Tim Bieko said this regarding the mainnet merge.
September 19th or slightly earlier is highly likely
if everything plans with the Goerli/Prater merge…
But September 19th could also be the day war is waged on Ethereum…as there are rumblings already
that the Ethereum miners may be planning a fork and keeping the fork proof of work…yes this is
bad for Ethereum as a whole, but it may not be so bad for the holders of Ether…let me explain
To begin, who has started the ETHPOW fork rumors?? Well last week,
a Chandler Guo tweeted this “ethpow will coming soon” with a video of what looks to
be a group of mostly asian/chinese talking about something most likely forking ETH.
But at the end of the video, Chandler says this to the group “ETH Will be Fork. EthPOS vs EthPOW”
Now, this isn’t just some Rando, posting this on Twitter.
Chandler is a guy who has major influence in the mining industry…for both bitcoin and Ethereum…
From this profile on Chandler we can see it says
“Chandler is one of the most well known Bitcoin and cryptocurrency figures in China.
He was one of the first bitcoin miners and was championing bitcoin and other crypto assets
before they had become mainstream. Now he runs one of the largest bitcoin mines in China, BitBank”
But it’s not only Bitcoin…in 2016 he tweeted this
“I am Chandler Guo, a 51% attack on Ethereum Classic (ETC) is coming with my 98G hashrate”
He had enough hashrate to 51 percent attack Eth Classic back then…I can
only imagine the hashrate he has today…and the influence he has with other miners….
Chandler obviously likes to be in the middle of fork controversy,
he was in the middle of ETHClassic…but also in 2017, he supported Roger Ver and Bitcoin Cash,
by creating Bitcoin Unlimited, a client for Bitcoin Cash, a fork of Bitcoin…
But could he get the miner support for this to be a success? Well back in January of 2021, Ethereum
was implementing an controversial upgrade, EIP1559, which burned a portion of transaction
fees, that normally went to the miners. Well a big uproar happened within the community,
and a campaign was launched by flexpool to stop the eip from moving forward. As we can see from
the website, many mining pools supported the effort. Those who opposed included flex pool,
sparkpool, ethermine, nanopool, hiveon and many others. And the website stated
“They do not value their miners because they plan to dump them when 2.0 comes. Miners are no
longer vital to the Ethereum developers or big mining pools because they’ve made their money,
and now miners are an embarrassment.” So it’s likely these pools, may support Chandler…
And Looking at current miner distribution by blocks, we can see from just 4 who opposed,
Ethermine, Hiveon, Flexpool, Nanopool…they have nearly 47 percent of the mining power.
With the other opposers, they have close to 50 percent of the hashrate.
Now…it seems like this is fork is going forward, on Chandler’s twitter, we can see he retweeted a
Mister Ser, who said “Chandler's ETH PoW fork to be called ETH-W, with perps launching on
Poloniex this month & Justin Sun's $USDD to be first stablecoin on the EthPoW ecosystem.”
Which ole Justin Sun, basically confirmed. He said “Poloniex is one of the world's first exchange
to support Ethereum and EthereumClassic. Poloniex will support any Ethereum fork
if it happens. Feel free to deposit your ETH to Poloniex and get fork ETH.
Yes, my friends if you have Ethereum and this fork moves forward, you will get forked ETH.
Chandler tweeted this about the fork last week. “We will fork ETH, you will get free cash!”
So for 1 Ethereum, each hodler will get one forked ETH or ETHW. How much could the payout
be?? Well let’s look back at other forks, and how much money you could have gotten for each fork.
Number 1, Ethereum Classic which happened in 2016.
The fork of ETH Classic initiated on July 20th of 2016, and as we can see from the price chart,
ethereum pumped leading up to the fork, and topped out at 14 dollars on the day of the fork.
So you could have purchased 100 ETH at max price of 13 dollars the day before the fork
costing you only 1300 dollars. That would mean you would have received 100 Eth Classic. We can
see from this price chart, if you would have HODL’d ETC to its peak of 136 dollars, set last
year in 2021…that 100 ETC which cost you 1300 bucks, would have been a cool $13,600 dollars.
What about another? The Bitcoin Cash fork in 2017….this happened in August 1st,
of 2017 and as we can see from the price chart of Bitcoin back then,
in the days leading up to fork BTC was around 650 bucks, but dumped on the day of the fork.
So 10 Bitcoin then would have cost you, $6500 dollars….of which you would have
received 10 Bitcoin Cash. If you would have held that Bitcoin Cash to it’s peak of $3800,
just months later…that 10 Bitcoin Cash would be worth $38,000 dollars.
Now, I’m not saying this is going to happen once again…but in the history of previous contentious
forks, that get large amounts of community support…the payout has been pretty dang solid.
Although, this eth-w fork, if much different than any before as Ethereum has a large DeFi ecosystem
and NFT ecosystem…what is going to happen with this?? Are stablecoins
going to be doubled? What about staked ETH? What about liquidity pools like from AAVE??
Well a proof of work Ethereum, means no staking, which means staking projects ethereum
like stETH and rETH from rocketpool, can’t be redeemed…which means their value will be zero.
Stablecoins? Well you can't have fiat-backed stablecoins double their supply overnight and
keep their value at 1 dollar, as there is no fiat backing them. So USDC and USDT on ETH-W
will also be worth zero. Since over 70 percent of DAI is backed by USDC
and USDT on ETH, that means DAI on ETH-W would also be near zero.
Which affects liquidity pools, across the DeFi ecosystem. Uniswap,
Sushiswap, and more will also be worth nothing…ETH-W DeFi is dead on arrival.
But what about NFTs?? Well this one is interesting…since the NFT was
minted on ETH when it was proof of work, is the NFT on ETH-W the original!?
A Maximus on twitter explained this well. They said “Hmmm I wonder if an NFT “black market”
will develop on ETH1. I bet there’s people who’d love some free money for punks / apes they already
will have on ETH2, but for some it would be a chance to own a “legitimate copy” of the original…
NFTs, could find some sort of value on ETH-W…this is going to get very interesting,
and it’s looks like it’s going to happen next month. Cheers viewers I’ll see you next time!!