ETH Merge, HODL for some free coins?

2022년 8월 4일

Ethereum's long-awaited merge is just around the corner, possibly the week of September 19th according to recent news.
Hopefully the 21st of September for the Earth Wind and Fire memes. (da da ut da...and now it's stuck in my head)

Shifting from Proof of Work to Proof of Stake will alter how the network nodes establish consensus.
The new consensus layer of ETH will allow far less energy to be used to run all kinds of network applications.
Generally, this will be a welcome upgrade since pretty much everything runs on top of ETH these days.

However, there is a possibility of the current miners hard forking the network to remain semi-relevant much like ETH Classic.
If such a hard fork were to occur, There is the possibility that current addresses will be credited in the hard fork with new tokens on the new forked chain due to the import of ETH block history.
This might happen rapidly or not at all and is a long shot as the ETH community is generally cohesive. However, due to a large amount of built-up capital in the form of mining hardware, a faction taking this path rather than switching resources to mining other coins would not be unheard of as Bitcoin cash and Ethereum classic can attest. if handled improperly in a centralized way such as unclaimed tokens being centralized sometime after the fork, the forkers would also have full access to forked versions of NFTs and tokens. There could be some chaos in that respect for years to come due to confusion and the "I copy pasted your NFT" memes would reach a whole new level. One could suspect those with few scruples might be enticed by the possibility of forked bored apes alone not to mention the hundreds of other projects in the ecosystem. One could also suspect the ETH community will fight back against any fork if one occurs to prevent confusion and protection of value. Thus prepare the popcorn as things might get weird.

To make this play all one would need to do is hold ETH in an address during the time of the merge to Proof of Stake.
Preferably a self-custodied address off an exchange such as a Ledger/Trezor or a Meta Mask.
otherwise, the exchange would get the coins on the new chain credited to their hot or cold wallet instead of you, and then you'd be at their mercy on getting any of the new tokens if at all. Then throw the new coin in an LP on Uniswap/your favorite DEX ASAP if one occurs and finally sell the stake in the coin in the future or keep it for use on the new chain.

If this scenario does transpire expect major volatility in the new token soon after due to illiquidity of exchange and the possibility of transactions only on Dexes such as Uniswap for the first few months to even years.
Thus a good play would be to not expect anything while holding ETH in an address through the merge.

All the best, See You on The Moon.