3 reasons why Ethereum PoW hard fork tokens won’t gain traction

The second-largest crypto market capitalization is Ether (ETH). It also ranks as the leader in decentralized applications via deposits. The network became a victim to its success and experienced a fee increase in November 2021, when the average transaction cost exceeded $50.

The Merge is an important step in implementing a functional scaling solution. The main driver of the rally to $2,000 was Aug. 15’s confirmation that there had been a transition from a proof-of-stake (PoS), consensus.

Investors were partly excited by the reduced issuing schedule, which will likely lead to a transition into a deflationary situation. However, there are also expectations of future forks. Hard-forked coins could be given to Ether holders on other blockchains. However, there is no guarantee that they will find sufficient liquidity or traction.

There’s also the temptation to get free money or bonus non-fungible tokens. The forked chain will start with the same state as the original Ethereum network. Each address will have the exact same contents in terms transaction history and tokens.

There is also disappointment following Ether’s 29% correction, which took place after the $2,000 resistance was broken. The exuberant expectations of receiving free money may have been dispelled when investors realized the practical utility of the forks was much lower than expected.

ETHPoW is a new possible chain that has been backed by proof of work (PoW), miners. Futures trading has been initiated by some exchanges for the native asset of the fork chain, ETHW. The contract now trades below $55 on Poloniex, Gate.io and is currently trading at $55 on Gate.io.

Forked stablecoins don’t have any support or backing.

Tether (USDT) and USD Coin (USDC), the two most popular stablecoins have confirmed their support for the Ethereum Foundation-backed Merge Chain. Cointelegraph reported previously that, given the dominance of the two stablecoins, the support of the issuers “should result in an easy transition for Ethereum.”

The core team behind EthereumPoW, (ETHW), stated that they would temporarily freeze tokens in DeFi liquidity pools to protect user assets following the hard fork.

Many people didn’t like the idea of freezing assets without users consent. Many users called EthereumPoW’s Twitter account, which is behind EthereumPoW, a fraud because it has not been voted on any such change.

DApps do more than facilitate transactions. They interact with external data and request off-chain computing. This is where blockchain oracle tech comes in to play.

Chainlink enhances smart contract performance by connecting them with real-world events, data and transactions. The protocol announced that it will continue to be available on the Ethereum PoS blockchain, which is supported and maintained by the Ethereum Foundation.

Related: MakerDAO cofounder recommends depegging DAI-USD to limit attack surface

Leading DApps will encourage users to abandon forked tokens

Aave (AAVE), holders were asked to vote to “commit” to Ethereum’s PoS consensus on Aug. 16. This gives power to the authority to stop any Aave deployments using any other Ethereum forks.

Aave was originally designed as an Ethereum application. However, it has evolved to be interchained over time and has official versions on Avalanche and Arbitrum.

Investors are realizing that DApps, stablecoins won’t support forked chains. This means that “free” tokens or NFTs will be less accepted in DeFi applications and marketplaces. Regardless of the ETHPoW token’s value, the Ethereum Foundation supports PoS networks that are far more useful than those of rival chains.

Ethereum Classic has never gained traction

Ethereum Classic (ETC), a pre-existing Ethereum Classic, supports the theory that Ether’s (ETH), price will not be affected by a rival chain. The 2016 consensus change was followed by the original hard fork. It aimed to reverse an exploit worth $60 million. Despite its $4.5 billion market capitalization, the DApps on this rival proof-of-work chain (PoW), never gained traction.

According to current data, Ether traders should ignore the forks that are coming and instead focus on the roadmap towards scalability and whether the network remains the leader in total value locked.

Risk is inherent in every investment or trading move. Before making any investment or trading move, you should do your research.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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