How to get free money from Ethereum PoS upgrade

Ethereum is moving to Proof-of-Stake, but miners are planning a Proof-of-Work fork. A group of anonymous developers backed by many prominent Ethereum miners are expected to hard fork the Ethereum blockchain after next week’s merger, keeping a version of the network working with the Proof-of-Work (PoW) consensus mechanism. ) current while the main blockchain transitions to Proof-of-Stake (PoS).

The fork, commonly known as ETHPoW, will share the same transaction history as the main Ethereum network, but will start creating its own blocks after the launch of The Merge update. As the PoW fork starts from the state of the Ethereum network before the merger, all token balances and smart contracts will also be transferred. This means that all ETH holders on the chain will have an equal balance of ETHW on the ETHPoW chain. ETHW will only originate from the PoW fork and will represent an entirely different asset to the original ETH on Ethereum.

For many Ethereum proponents, the planned PoW fork is of little interest as an investment. Virtually all deFi, NFT and network infrastructure protocols have publicly announced that they will support the PoS chain, leaving the PoW fork in a difficult situation. Upon launch, decentralized exchanges on the fork will likely stop working, and centralized stablecoins like USDC and USDT will no longer have any value, potentially causing mass liquidations and breaking many DeFi protocols.

Although the PoW fork will have to start from scratch, there is one token that will likely retain some value – ETHW. Like the 2016 DAO hack fork that spawned Ethereum Classic, the PoW fork may also have loyal supporters who will continue to develop it, creating demand for its token. Conversely, those who don’t believe the fork will go anywhere might want to sell their ETHW tokens post-merger to pocket some extra gains. But what is the best way to ensure that you will receive your ETHWs? Which exchanges are planning to support Ethereum PoW forking? Read on to make sure you get the most out of the PoW merge and fork.

Centralized exchanges

The easiest way to play the merger is to deposit ETH on a centralized exchange that has announced that it will support the PoW fork. The list below is not exhaustive but covers the major exchanges that have issued statements:

  • Poloniex has already registered an ETHW replacement token and will register and support exchanges for the ETHW fork when it launches, including crediting user accounts with ETHW in a 1:1 ratio to the amount of ETH they hold .
  • Binance, MEXC Globaland Gate.io will all support an ETH PoW fork and also plan to credit user accounts with ETHW in a 1:1 ratio with ETH.
  • OKX will list and support exchanges for an ETHW fork.
  • BitMEX launched ETHPOWZ22, a linear ETHPoW futures contract with a margin of USDT.
  • Coinbase, FTXand kraken stated that they will review an ETH PoW fork like any other asset and list it as a transaction if necessary.

Currently, it appears that Poloniex, Binance, MEXC Global, and Gate.io are the safest to give users their equivalent ETHW after the merger. Of these, Binance will likely have the largest market, as it is currently the top centralized exchange in terms of trading volume.

However, those unable or unwilling to deposit their ETH on one of these exchanges before the merger have another option. Holding ETH in an Ethereum wallet without custodial guarantees that your address will receive ETHW during the new PoW fork.

Possession

A custodial wallet should be the fastest way to access your ETHWs after the merge. While users of centralized exchanges may need to wait hours or even days for their ETHW to be paid into their account, taking control of your ETH funds is the surest way to guarantee that you will have access to your coins from the PoW fork.

However, the trade-off is that accessing the new PoW chain requires some technical knowledge and could put users at risk. Those taking this approach will need to add the PoW network to their EVM portfolio upon launch. In MetaMask, you can do this by clicking on the network at the top of the browser extension and selecting “Add a network“. You will then need to enter the ETH PoW chain name, RPC URL and chain ID (these details will be announced after the PoW chain is launched). The process is relatively simple, similar to adding RPC for other Ethereum-compatible chains like Polygon or Avalanche.

Another consideration for those planning to hold their ETH themselves before the merger is consolidation. If your ETH is locked in a smart contract, on a Tier 2 chain, or staked by a protocol like Lido, it will not be paired with an ETHW on the PoW chain. To maximize the amount of ETHW you will receive, it is advisable to convert your assets to normal ETH and keep them in your wallet for the pre-merger period.

While using a non-custodial wallet will ensure you receive coins from the PoW fork, the limiting factor will be finding a marketplace to sell them after the Merger. Since all tokens in the forked chain except for ETHW will almost certainly be worthless, the use of decentralized exchanges is out of the question. Those who want to cash out will still have to wait for a centralized exchange to open ETHW deposits.

To make sure you’re ready, consider creating accounts on the various exchanges that will support ETHW in advance. Thus, those who wish to do so will be able to transfer their ETHWs at the first opportunity, and potentially sell them at a higher price.

Finally, it is essential to understand the risks associated with the merger and any new PoW forks. A frequently mentioned hazard is that if an Ethereum fork is launched with the same chain ID as the main PoS chain, transactions could be “relayed“. That is, transactions signed on a fork chain could be validated on Ethereum’s main PoS chain, enabling new scams that could potentially drain users’ wallets.

Although such scams are possible, it is unlikely that the PoW fork will be launched with the same channel ID. However, unscrupulous individuals may try to launch other forks intended to steal users’ ETH PoS. Be very careful before signing trades on an ETH fork; if in doubt, do nothing. It is better to miss a few hundred dollars than to lose your entire stack of ETH.

The latest estimates predict that the merger will take place between September 13 and 14. If you plan to send ETH to a centralized exchange or your own wallet, be sure to do so well in advance. Most exchanges plan to halt ETH trading a few hours before the merger to ensure that no user funds are lost, so don’t wait until the last minute.



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How to get free money from Ethereum PoS upgrade


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