Arsablog

3 reasons why Ethereum proof-of-work hard fork will not succeed

۳ دلیل برای اینکه هاردفورک اثبات کار اتریوم موفق نخواهد شد

Ethereum, the second largest cryptocurrency in the market and the undisputed leader of the DeFi (DeFi) ecosystem, became a victim of its success due to scaling issues; Until November 2021 (Aban 1400), the average cost of each transaction on the Ethereum network exceeded $50. This is exactly why Ethereum integration will be a critical step to implement a practical scalability solution. As a result, creating proof-of-work hard forks of Ethereum is something like re-experiencing a failed idea.

To Report Cointelegraph’s approaching merger and possible transition to an anti-inflationary status has investors excited. However, they expect hard forks in the future as well. After this happens, the tokens of these hard forks will be awarded to Ethereum investors in the offending blockchains (for free). Even if there is no guarantee that they will have market acceptance and liquidity.

The launch of these hard forks with a situation similar to the Ethereum mainnet will tempt users to receive free tokens and NFTs. Similar status means that the contents of tokens and the transaction history of each address in the proof-of-work version are identical to the Ethereum network.

On the other hand, Ethereum’s 29% correction after reaching the $2,000 resistance was so challenging that it created a sense of despair in the market. After investors realized that the practical use of forks would be much less than expected, the desire to receive free tokens disappeared and gave way to reality.

Ethereum Probable Hard Fork (ETHPoW) is a new blockchain supported by a group of miners. Also, some exchanges have also started trading native token futures of this hard fork. The markets seem to have had their say on this hard fork, as the Ethereum Proof-of-Work Token futures contract is now trading below $55 on the Gate and Poloniex exchanges.

Also read: What is a fork? Simple definition of hard fork, soft fork and their effect on price + video

Hardfork stablecoins have no backing or oracle

Two market-leading stablecoins, Tether (USDT) and USDC (USDC), have officially confirmed their intention to support the Ethereum Foundation-backed Merger Chain. Cointelegraph previously stated in a report that given the dominance of these two stablecoins in the market, their support could lead to a smooth and hassle-free transition of Ethereum to proof-of-stake.

Meanwhile, the Ethereum Proof-of-Work hardfork development team has said that they are temporarily blocking tokens in the cash pools of certain DeFi programs to protect users’ assets after the hardfork.

The idea of ​​blocking users’ assets without their consent did not go down well. Some users also called the Twitter account behind the Ethereum hard fork a scam, because the Ethereum community did not vote to make such a change.

Decentralized applications have a function beyond facilitating transactions, because they require interaction with external data and the use of off-chain (outside the network) calculations. This is where Oracle Blockchain technology comes into play.

Chainlink enhances the functionality of smart contracts by linking them to real-world data, events, and transactions. The protocol announced in an official statement on August 8 that their services will remain based on the proof-of-stake blockchain platform supported by the Ethereum Foundation.

Leading programs encourage users to withdraw their forked tokens

On August 16 (25 August), Aave protocol asked its investors to participate in the vote of commitment to Ethereum’s proof-of-stake mechanism. This proposal gives the community the power to prevent the Avi protocol from being deployed in any alternative forks of Ethereum.

While Avi was designed exclusively as an application for Ethereum, over the years it has evolved into a cross-chain protocol. Currently, the official versions of this program are running on Phantom, Polygon, Optimism, Arbiterum, Olench and Harmony networks.

Investors have realized that the lack of support for decentralized applications and stablecoins from Ethereum hard forks means that free tokens and NFTs will be less accepted among these applications. Regardless of the potential value of the Proof-of-Work hardfork token, the usability of the Ethereum Proof-of-Stake network supported by the Ethereum Foundation will far exceed that of competing networks.

Ethereum Classic was never adopted

The idea of ​​Ethereum Classic showed us that the launch of a competing network will not weaken the price of Ethereum. The purpose of this hard fork, which followed a consensus change in 2016, was to restore $60 million worth of stolen tokens from the network. Ethereum Classic’s blockchain applications never caught on, despite its $4.5 billion market cap.

Available data suggests that Ethereum traders should ignore future (possible) hard forks. They should focus on the scalability roadmap; Whether or not Ethereum can maintain its position as the market leader with the most capital locked up.

source

Leave a Reply

Your email address will not be published.