Poloniex Announces Support For Ethereum Forks, Users Will Receive New Tokens Via Airdrop
Ethereum, the second cryptocurrency by market cap, is about to enter a new era. In September, Ethereum will complete its transition from a Proof-of-Work (PoW) consensus to a Proof-of-Stake (PoS) consensus blockchain. This event will forever change the crypto industry and the Ethereum ecosystem.
Leading crypto exchange Poloniex, the first trading venue to support Ethereum and Ethereum Classic, will support “The Merge”. The exchange will take an unprecedented step to ensure that all users, communities, and sectors will be able to carry on in the space within a stable and sustainable market.
In an official post, Poloniex explained the implications of this event as a potential trigger for the creation of an Ethereum fork or several, a different version of the Ethereum protocol still operating under a PoW consensus. At the moment, ETH is one of the most mine and adopted cryptocurrencies in the crypto space.
All of this computational power, the entire ETH mining sector, might disappear unless the community decides to support and continue mining an ETH fork. His Excellency Justin Sun, diplomat and major investor in the crypto industry and in Poloniex, highlighted the key role that the platform has played in similar past events.
Via his official Twitter handle, Sun said the following to the crypto community:
We’ve witnessed the consensus mechanism of POW as a key factor driving the expansion of Ethereum ecosystem, and are willing to continue to support the development of the community.
Across the alley, in the ETH mining sector, “The Merge” has been an event with the capacity to bring uncertainty to their operations. Sun’s statements could provide ETH mining with the support to launch an alternative. Sun added:
We currently have more than 1 million ETH. If Ethereum hard fork succeeds, we will donate some forked ETHW to ETHW community and developers to build Ethereum ecosystem.
Poloniex Reassures Potential ETH Fork Communities
On August 7, Poloniex launched markets for potential forked tokens, ETHS and ETHW, and will airdrop to users prior to “The Merge”. Once the upgrade is completed, users will receive the tokens at a 1:1 parity with the option to trade their fork tokens for ETH before the event. Now the swap page is online and trades are open. What’s more, Poloniex also launched zero trading fees for all ETHS and ETHW trading pairs, including ETHS/USDT, ETHW/USDT, ETHS/ETH, ETHW/ETH, ETHS/USDD and ETHW/USDD.
These tokens are available to swap on Poloniex and might be removed or preserved after “The Merge”. That decision will depend on the users, as the platform clarified in the official announcement, if there is high adoption for the fork tokens, they will remain on the exchange.
Poloniex added the following on the future of the ETH token, and the important role that the crypto community will play in supporting Ethereum forks:
ETHS will be automatically converted into the upgraded ETH at a 1:1 ratio and the ETHS market will be delisted. After the hard fork, the PoW chain with the most hashrate will serve as the main chain of ETHW. Poloniex will also support other PoW chains resulting from the fork, if any, and fully respect the community’s opinions on the token naming. Poloniex will adapt the name of the token to the final community consensus and re-enable the token’s deposits, withdrawals, and trading in due course.
The crypto exchange platform is going the extra mile to ensure that users and communities are the ones benefiting from the upcoming Merge and that they will have a place to trade their potential fork tokens. However, the platform warned users about the potential risk of trading with these ETH fork tokens.
In the past, other larger cryptocurrencies, such as Bitcoin were at crossroads. Different communities around Bitcoin had different opinions about the future of the cryptocurrency and decided to fork it.
Bitcoin was forked into Bitcoin Cash, Bitcoin Gold, Bitcoin Satoshi Vision (BSV), and Bitcoin ABC forks. Ultimately, the communities have decided which projects deserve their support like they will with the upcoming Ethereum event.
Proof-of-Work v. Proof-of-Stake, What’s The Best Consensus?
Proof-of-Work (PoW), the current consensus algorithm for Bitcoin, Ethereum, and other cryptocurrencies allows network participants to validate transactions. These participants or miners use computational power to compete to resolve a mathematical puzzled. The winner gets to insert a block into the blockchain and receive a reward.
This process, according to its critics, is energy demanding and allegedly unfit to onboard more users. Proof-of-Stake (PoS) is supposed to reduce a network energy consumption by over 90% by using a different mechanism to validate transactions via staking. The new consensus will be followed by several upgrades and performance improvements set to take Ethereum into an era of mainstream adoption.