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Editor: Remember to follow
Source: William M. Peaster
Original title: How to Win the Ethereum PoW Fork
When the countdown is zero, most Ethereum ecosystem will be transferred to the new POS chain, except for a few dissatisfied Ethereum miners who have millions of dollars in mining equipment.
These miners did not zero their business, but announced their merger fork plan and maintained the Proof of Work version of Ethereum (ETHPOW).
If this happens, you may have a copy of each existing digital token on the ghost town copy version of the old Ethereum chain.
Some tokens may be valuable, but most do not.
If you are considering selling them for quick profits, proceed with caution!
You need to pay attention to many technical challenges.
Today, William provides us with a handy list of what we should pay attention to.
Here is how to win the Ethereum PoW fork (if any).
- Bankless team
During the merger, a group of miners planned to fork and maintain a Proof of Work (PoW) alternative when other members of the Ethereum community migrated to Proof of Stake (PoS).
This fork, known as EthPoW, is not ready for a serious future, but it should offer new EthPoW tokens to Eth holders at a 1:1 ratio.
interacting with ETHPOW can be very dangerous, so this Bankless strategy will give you a list that you can use to safely navigate forks.
● Goal: Sell your EthPOW as much as possible in exchange for ETH
● Skills: Intermediate
● Strive: 1 hour
● ROI : Potentially increase your ETH
ETHPOW Security Checklist
Understand the basics of merger
"The Merge" refers to the Ethereum blockchain changing its consensus mechanism. It uses Proof of Stake POS instead of Proof of Work POW. What does this mean?
https://twitter.com/lay2000lbs/status/1569077819916914690
TL;DR:
● Ethereum is migrating from PoW to PoS consensus.
● PoW uses energy (in the form of calculation) to ensure safety. PoS uses capital (in the form of crypto tokens) to ensure security. The former is obviously very energy-consuming, while the latter is extremely energy-saving.
● As a result, after conversion to PoS, Ethereum's energy use will drop by about 99%.
● This merger with PoS has received overwhelming community support, which means that almost all Ethereum community members and projects are migrated to the updated Ethereum chain without supporting any PoW forks.
Understand the basics of ETHPoW fork
If they start after the merge, I am very suspicious, how much computing power they will get. By then, computing power will be on other chains, and the value support of ETHPoW is already very fragile.
https://twitter.com/hudsonjameson/status/1567673840293056515
TL;DR:
● Since July 2022, miners such as Chandler Guo have accelerated their plans to fork out a PoW version of Ethereum during the merger or shortly after the merger.
https://twitter.com/ChandlerGuo/status/1552860643799302144
● Since basically all Ethereum activity is transferred to the PoS chain, EthPoW fork does not have a serious value proposition—it is a money grab game in the form of a permissionless blockchain, and participating miners can maintain some dominance in the merged world.
● When it starts, EthPoW will "airdrop" EthPoW tokens to ETH holders at a 1:1 ratio. Trying to sell these tokens may cause you to suffer from replay attacks , where the attacker will "replay" your EthPoW transactions on the real Ethereum chain and steal your funds accordingly.More information about this attack is directly below:
Check ChainID
ETHPoW team soon had no time to release client binary before the merge, and the closest thing they did to change chainID was to add comments in the code base. If the fork passes without changes, the searcher will have a live day for replay.
https://twitter.com/FrankieIsLost/status/1567657248545198082
TL;DR:
● ChainID was originally introduced in EIP-155 to mitigate replay attacks between Ethereum and Ethereum Classic; the former ChainID remains at 1, while Ethereum Classic moves to 61.
● At the time of writing, EthPoW developers have not updated the forked ChainID from 1 in their code base - meaning EthPoW is about to launch the same ChainID as Ethereum.
So, what is a replay attack? A replay attack is to get transactions from one network and use it on another network. If you send 100 WETH to someone on the Ethereum PoW fork after the merge, the replay attack may repeat this on the Ethereum PoS without your permission.
https://twitter.com/MakerDAO/status/1567953179333066753
● If EthPoW continues this dangerous dynamic, it will create ideal conditions for black hat organizations to perform replay attacks.
If the ChainID is 1 when the network is started, do not interact with the EthPoW fork in any case. You may lose all your ETH.
● In other words, the first major item on this checklist is to check if the initial ChainID of EthPoW is 1 or the planned alternative 10001. If the creator chooses the former over the latter, then don't try to interact with the fork at any time.
● In addition, some DeFi projects such as Maker's Dai stablecoin are hard-coded using ChainID of 1, which means that interaction with their EthPoW version will allow you to suffer replay attacks in any case. Check the items' recent communications one by one to see where they are here.
Some replayable interaction examples: interact directly with any Maker contract on the forked Ethereum PoW chain from the same address you used on Ethereum before the fork.
https://twitter.com/MakerDAO/status/1567953195925635075
Determine if ETHPOW is worth the trouble
Some people pay more than 80% of the APY to borrow ETH. So if you borrowed for a week, you hope ETHPoW will net you $25-30, just to make up for the interest. Futures prices are currently $30. https://binance.com/en/price/ethereum-pow There are better opportunities than this.
https://twitter.com/intocryptoast/status/1568689788731129858
TL;DR:
● Assuming EthPoW is started with ChainID of 10001, it alleviates the concerns of most replay attacks - even without considering this issue, is the value of EthPoW worth the time and effort to claim the token?
● This is the biggest problem at present! At the time of writing, ETHPOW IOU is worth $29.30 per token.
● In addition, the difference between the current spot price of ETH ($1726) and the current price of ETH futures on September 30 ($1710) indicates that the implied price of ETHPOW before release is about $16.
● For many ETH holders, claiming each token worth $16-30 is not economically cost-effective, although its price may be pulled above that range when exchanging on ETHPOW. On the other hand, the price of ETHPOW may drop rapidly as many people sell tokens in large quantities.
Prepare your ETH stack
Ethereum merger is scheduled to take place on September 13. Christmas is here again. ETH holders will soon receive the airdropped ETH PoW tokens.What should you do to get yourself in the best position? Here are 7 steps you can consider taking advantage of the merger:
https://twitter.com/bobbyong/status/1566616585015422976
● If EthPoW actually starts with a ChainID of 10001 and the EthPoW token starts with some good price, it might be worth it to sell your ETHPOW as real ETH, USD, etc.
● To prepare for sale of ETHPOW, you can get the best guarantee by placing your ETH in a non-custodial wallet with your full control before the ETHPOW is forked. If you have ETH in your exchange wallet, the exchange will retain your ETHPOW airdrop.
● Also, make sure you hold ETH on Ethereum before forking, not on L2 (such as Arbitrum). Only ETH on Ethereum will be included in the ETHPOW tokens on ETHPOW.
● Unpack your Wrapped ETH ( WETH ) into an ETH prefork so you don't have to bother trying to unpack WETH on the EthPoW side once/if it goes live.
● Also extract your ETH from the DeFi liquidity pool, because any ETH you have in the liquidity pool will not be counted into ETHPOW when forking.
● Consider borrowing ETH using the DeFi lending protocol to maximize the amount of ETH you hold before the fork; however, note that some lending protocols like Aave have suspended lending for ETH amid a surge in lending.
overnight interest rate in the Aave ETH market has fluctuated significantly (queued for execution later today). The last moment borrower matches the redemption and pushes utilization to 75%
https://twitter.com/parsec_finance/status/1567164923527962625
Select your exchange
BitMEX and Poloniex will support ETHPoW transactions
https://twitter.com/BitMEXResearch/status/1556593323695112192
● Some exchanges, such as BitMEX, have announced plans to support ETHPOW trading.
● That said, it may take some exchanges to spend days, weeks, or months supporting ETHPOW deposits and/or account credits – make sure the exchange you log in to clearly and in detail so you know what you can do and when you can.
are you worried? Then do nothing
Now, there are a lot of "ifs" when considering whether ETHPOW should be sold. The key to remember is that "not playing" is a feasible strategy.
If you can't confidently complete the list listed above, "winning EthPoW fork" may just mean giving up and watching the chaos aside. The biggest problem with
is whether the ChainID of this inconspicuous fork is 1 or 10001. If 1, then don't interact with the fork, as the risk of replay attacks on your real ETH is far more than the benefits you get from selling forks. What is the best case for
?
EthPoW Starting with 10001 ChainID, you can deposit EthPoW into a supported exchange and then exchange a substantial amount for USD, or buy more ETH, or anything that suits you.
At this point, however, it seems unlikely that the startup of EthPoW will go smoothly.
Action Steps
☑️Before deciding how to deal with ETHPOW, please carefully read the above ETHPOW security checklist
🕵If you missed it, you can also check out our previous How to use DeFi strategies privately!
Editor in charge: Kate
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