Market Analysis Report (08 Aug 2022)

As the Ethereum Merge approaches to convert the network from a Proof-of-Work (PoW) consensus into a Proof-of-Stake (PoS) one, some Ethereum miners are calling for a hard fork that will split the chain to maintain a network using PoW.

The move away from PoW is said to make the network cheaper, faster, and more environmentally friendly, however, it will also mark the end of an income stream for Ethereum miners who were being rewarded for securing the network.

In theory, to keep their activities intact and avoid the obsolescence of millions of dollars worth of mining hardware, miners are looking to back an Ethereum fork called EthereumPOW.

The forked network would share Ethereum’s history until the date of the chain split. Chinese journalist Colin Wu has reported Chandler Guo, a Chinese miner and former Binance advisor, predicted at least half a dozen PoW forks will emerge, although Guo believes developers and protocols will support PoS Ethereum.

Backers of an Ethereum hard fork include TRON founder Justin Sun and the exchange he backs, Poloniex, which has offered support for the Ethereum fork, listing both ether and the forked token.

Justin Drake, a researcher at the Ethereum Foundation, has dismissed the threat of PoW forks, as he conceded at least “one person in the world” will try to extend Ethereum as a PoW chain, although he doesn’t see a situation where both PoW and PoS chains survive due to the prevalence of wrapped assets and tokens in decentralized finance protocols.