3 reasons why Ethereum PoW hard fork tokens will not receive the expected attention

3 reasons why Ethereum PoW hard fork tokens will not receive the expected attention

Ether (ETH) is the second largest cryptocurrency by market cap and the clear leader in decentralized applications. A victim of its own success, the blockchain network saw a drastic increase in transaction fees in November 2021, with the average fee exceeding $50.

That’s why Merge is a critical step in implementing a fully functional scaling solution. Confirming the move to proof-of-stake (PoS) consensus was the main driver behind the rally to $2,000 on August 15.

Investors are particularly excited about the reduction in the token issuance schedule and the possible transition to a deflationary scenario. There are also prospects for upcoming forks. Hard-forked tokens can be distributed to Ether holders over different blockchain networks. However, there is no guarantee that these will attract interest or have sufficient liquidity.

On the one hand, free coins and even bonus NFTs are attracting investors because the forked chains will have the same status as the original Ethereum network. In other words, each address will contain the same content in terms of tokens and transaction history.

On the other hand, there is the disappointment of the 29 percent correction that Ether experienced as it hit the $2,000 resistance, which came out harder than expected. It is possible that investors realized that the practical use of fork networks would be far less than expected.

ETHPoW is a possible new chain to be powered by proof-of-work (PoW) miners. Some exchanges have already launched futures for the fork chain’s main asset, ETHW. Investors also seem to have offered their own opinions, with contracts running under $55 on Poloniex and Gate.io.

Forked stablecoins will not be offered reserve and oracle support

The two leading stablecoins, USD Coin (USDC) and Tether (USDT), have confirmed that they will only offer support for the Merge chain, which the Ethereum Foundation is behind.

On the other hand, EthereumPoW (ETHW) team announced that DeFi applications will temporarily freeze tokens in certain liquidity pools to protect users’ assets after the hard fork.

The idea of ​​freezing users’ assets without their consent was not welcomed in the community. Some users accused EthereumPoW’s Twitter account of being a scam as the community did not vote for such a change.

Decentralized applications (DApps) do more than just execute transactions and can interact with off-chain data and request off-chain computation. Blockchain oracle technology comes into play at this point.

Chainlink enhances smart contracts by connecting them to real-world data, events, and transactions. Chainlink announced in its official announcement on August 8 that its services will only be available to the Ethereum PoS network.

Pioneering DApps incentivize users to PoS

Aave (AAVE) holders were called to vote on whether to contribute to the Ethereum PoS network on August 16. If the vote is “yes”, Aave applications on all alternative Ethereum forks will be shut down.

Although Aave is an application designed specifically for Ethereum, over the years it has become cross-chain and started operating on Avalanche, Arbitrum, Optimism, Polygon, Fantom and Harmony networks.

Investors are now realizing that DApps and stablecoins will not support fork chains, meaning that “free” tokens and NFTs are unlikely to be accepted in leading marketplaces and DeFi applications. Regardless of the value of the ETHPoW token, the usefulness of the Ethereum Foundation-backed PoS network beats rival chains by leagues.

Ethereum Classic received no attention

Ethereum Classic (ETC) is one example that supports the thesis that a competing chain will not affect the price of Ether. The ETC was created after a hard fork, with a memorandum change made in 2016 to undo the $60 million security vulnerability. DApps on this PoW network received no attention despite the network’s $4.5 billion market cap.

Soruce : https://tr.cointelegraph.com/news/3-reasons-why-ethereum-pow-hardfork-tokens-won-t-gain-traction

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