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Vitalik Buterin calls out ETHW hard fork proponents as “trying to make a quick buck”

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Vitalik Buterin calls out ETHW hard fork proponents as “trying to make a quick buck”

Vitalik Buterin calls out ETHW hard fork proponents as “trying to make a quick buck” Liam ‘Akiba’ Wright · 5 seconds ago · 2 min read

Vitalik Buterin believes a proof-of-work hard fork of Ethereum is being pushed by “people who own exchanges trying to make a quick buck.”

2 min read

Updated: August 6, 2022 at 4:36 am

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Cover art/illustration via CryptoSlate

Speaking in a closed press conference during South Korea Blockchain Week, Ethereum founder, Vitalik Buterin, called people pushing for a hard fork of Ethereum to retain proof-of-stake “simply trying to make a quick buck.”

Justin Sun recently announced support for a hard fork of Ethereum post-merge by listing two new tokens on his Poloniex exchange. The tokens will be named ETHS and ETHW, related to proof-of-stake and proof-of-work, respectively. ETHW will represent a newly created hard fork of Ethereum where GPU miners continue to mine Ethereum after the merge of the Beacon chain. Some Chinese miners have reportedly signed up to be a part of this new chain in conjunction with Justin Sun.

Further, Sun is looking to incentivize a move to fork Ethereum to retain a version of the current network within a proof-of-work chain. He is offering up to 1 million ETHW to build a developer community should the chain become realized.

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. https://t.co/ee4kGSuVoK

— H.E. Justin Sun🌞🇬🇩 (@justinsuntron) August 4, 2022

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Vitalik stated that he has seen nothing but support for proof-of-stake from within the community and noted that most people who want to retain proof-of-stake are “outsiders” from the Ethereum ecosystem.

Justin Sun, the founder of the Tron blockchain, is undoubtedly an outsider to the Ethereum ecosystem by many accounts. Vitalik also referenced that proponents of a hard fork “own exchanges and are just trying to make a quick buck.”

Speaking on a question as to whether a hard fork could cause issues with NFTs living on both forked chains, Vitalik replied, “I foresee market confusion if that proof-of-work hard fork becomes something substantial.”

However, Vitalik quickly put the onus on the proof-of-work chain instead of accepting that this could cause issues with what many will consider “mainnet.” Should a fork gain traction, Vitalik expressed, “I’m sure there’s going to be problems… if they want to make a fork, it’s on them to mitigate those problems.”

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Circle to ‘fully and solely support Ethereum PoS’

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Circle to ‘fully and solely support Ethereum PoS’

Circle to ‘fully and solely support Ethereum PoS’ Oluwapelumi Adejumo · 8 hours ago · 1 min read

Circle said it would not have any problem with the Merge, and USDC will function efficiently on a PoS blockchain.

1 min read

Updated: August 9, 2022 at 5:42 pm

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Cover art/illustration via CryptoSlate

USD Coin (USDC) issuer Circle has revealed that it would fully support the Ethereum (ETH) proof-of-stake (PoS) chain post-merge.

According to an Aug. 9 blog post, the stablecoin issuer was looking forward to “the future scaling opportunities (the Merge) unlocks as well as the reduced energy consumption profile of the network.”

While we don’t speculate on the possibility of forks post Ethereum Mainnet merge, USDC as an Ethereum asset can only exist as a single valid “version,” and as stated previously, our sole plan is to fully support the upgraded Ethereum PoS chain.

Additionally, the issuer clarified it would not have any problem with the Merge, and USDC will function efficiently on a PoS blockchain.

Circle’s testing environment is connected to the Goerli Ethereum testnet, and we will monitor closely as it merges with Prater in the coming days.

It means the two largest stablecoins in the crypto space, USDT, and USDC, will not support any potential hard forks of ETH.

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Circle’s USDC is not only the largest fiat-backed stablecoin on Ethereum but also the biggest ERC-20 asset within the ecosystem.

Meanwhile, crypto exchanges like Huobi, OKX, Poloniex, BitMEX, and others have revealed that they would support ETH hard forks if there is enough demand in the market.

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ETH 2.0

MakerDAO identifies risks of an Ethereum hard fork

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MakerDAO identifies risks of an Ethereum hard fork

MakerDAO identifies risks of an Ethereum hard fork Oluwapelumi Adejumo · 36 seconds ago · 2 min read

MakerDAO said there are seven major risks to the protocol if Ethereum is forked.

2 min read

Updated: August 9, 2022 at 10:28 am

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Cover art/illustration via CryptoSlate

DeFi protocol MakerDAO (MKR) has identified seven risks its protocol faces if Ethereum (ETH) is forked.

Futures backwardation and negative funding

According to the protocol, the first risk it faces is future backwardation and negative funding.

In this case, while spot ETH will get forked PoW tokens, those exposed to ETH perpetual contracts and quarterly futures would not.

1️⃣ Futures Backwardation & Negative Funding.

Spot ETH would receive PoW forked tokens, while exposure to ETH quarterly futures or perpetual contracts would not.

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4/

— Maker (@MakerDAO) August 5, 2022

If this happens, it could cause a decline in the cost of leverage through futures contracts which will create competitive pressure on Maker vaults.

stETH discount

An Ethereum PoW hard fork post-Merge might lead to a stETH discount because staked coins are likely to become worthless.

Staked Ethereum is locked in and expected to be unlocked after the network upgrades to Ethereum 2.0.

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2️⃣ stETH Discount

stETH is likely to become worthless on any PoW Ethereum fork.

This is because further chain upgrades would be required to unlock staked ETH from the deposit contract, and there is arguably little economic incentive for the fork chain to accommodate this

11/

— Maker (@MakerDAO) August 5, 2022

But with a PoW hard fork, these staked coins would become worthless as they would remain locked until a network upgrade is done.

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The above may result in stETH’s value declining based on the expected value of the forked PoW ETH. For Maker, that represents a higher risk of stETH liquidity risks and downside volatility.

Additionally, a discount in liquid staking assets could incentivize leveraged staking behavior, increasing the “risk of negative price gaps while raising ETH supply rates on lending protocols.”

External assets

A forked Ethereum presents a challenge for external assets operating on the network. A fork would force centralized stablecoin issuers, cross-chain bridges, and others to pick an Ethereum chain.

3️⃣ External Asset Fork Choice

Ethereum hosts a broad variety of externally backed assets.

This includes cross-chain bridges, centralized stablecoins, and real-world assets.

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17/

— Maker (@MakerDAO) August 5, 2022

While some, like Chainlink (LINK), has expressed support for the Merge, there is the possibility that others could recognize ETH forks, given the level of traction it has gained recently.

Such actions may make their asset bridged into or out of Ethereum worthless, and any protocol that accepts such assets as collateral could have significant liquidity issues.

Liquidity pool protocols

Another challenge the protocol faces is the issue that faces liquidity pool protocols if Ethereum is forked.

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1️⃣ Liquidity Pool Protocols.

A significant subset of assets would become worthless in the hypothetical forked chain.

This could cause insolvency in lending markets, and incentivize users to borrow all available ETH as the asset most likely to retain some post-fork value.

4/

— Maker (@MakerDAO) August 8, 2022

According to the DeFi protocol, a significant number of assets could become useless if the network is forced, leading to insolvency in the lending market.

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Other risks

Additionally, the protocol faces other risks like oracle networks supplying bad data or network downtime during the Merge period, which could cause insolvency or liquidation for Maker vaults. Replay attacks could become more prevalent on both the mainnet and PoW chains.

This thread is focused on the following potential fork risks that could impact Maker:

1️⃣ Liquidity Pool Protocols.

2️⃣ Oracle Networks and Indices.

3️⃣ Network Downtime.

4️⃣ Replay Attacks.

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3/

— Maker (@MakerDAO) August 8, 2022

However, Maker has also identified ways to minimize these risks in the post. Most of the responses to the risk rely on communicating information about the risks to users.

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Ethereum: Going long on ETH? You are duty-bound to read this

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Ethereum: Going long on ETH? You are duty-bound to read this

Since 2016, over 44 million contracts have been deployed on Ethereum [ETH]. Interestingly, the number has been on the rise. 

Users might have imagined that all smart contracts would have contributed to exchange interactions and Decentralized Applications (DApps) management. However, it has been a little different from the public’s perspective.

Source: Electric Capital

The details

According to an engineer from crypto venture firm Electric Capital, only 15 million out of the 44 million live contracts were copies. 

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1/ Over 44 MILLION contracts have been deployed to @Ethereum since genesis 🤯

I analyzed all 44M using @InsightsFlow so you don’t have to.

Turns out, 70% of live contracts (~15M) are copies from one of 15 templates.

🧵 Here’s a breakdown of the dominant contract codes pic.twitter.com/aGKtaDSpH0

— Emre ⚡ (@n4motto) August 3, 2022

So how has Ethereum fared, and what effect does this information have on the ETH state?

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The data powered by the blockchain data tool, Insight flow, revealed that the rest of the contracts were not utterly useless. 22 million, representing 50% of all the contracts, were vital to help users save gas.  

Additionally, 10% of these contracts acted as gas token contracts, contributing to storage and providing cheap gas fees. They worked as self-destruct elements in helping the Ethereum Virtual Machine (EVM) operational structure.

Furthermore, 0.1% and 0.5% of live contracts were deployed for processing NFT transactions and integrating DApp compatibility, respectively. AAVE, MakerDAO [MKR], and Compound [COMP] are beneficiaries.

What about ENS and NFTs?

Based on the report, the ENS ecosystem, which hosted domains, formed an essential part of the ETH contracts. 

The revelation made it known that about 150,000 out of the live contracts were vital to the domain registration process earlier employed. However, recent updates have halted the use of contracts for the ENS domain system.

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Non-Fungible Tokens [NFTs] had almost no impact on the contracts. This part might come as a surprise, but there seemed to be no space for ERC-20 tokens and the ERC-721 standard. 

Despite the disclosure, the Ethereum blockchain has not ceased to contribute effectively to the crypto ecosystem. At press time, the ETH price was still above $1,600 even though it had fallen 3.56% over the last 24 hours.

Source: CryptoQuant

As per CryptoQuant, the trading volume saw a 19.73% decline within the same period. The exact figure stood at $15.44 billion. With the merge to Proof-of-Stake (PoS) almost happening, many ETH enthusiasts may want to observe the live contracts’ input. 

This anticipation may be connected to the revelation that millions of contracts affect the gas fees and scalability challenges Ethereum aims to solve.

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