Despite Ethereum’s (ETH) much-talked-about software update, dubbed the ‘Merge,’ over the past few weeks, which raised expectations of a price rally, the ETH value continued to fall.
After the merge, the Ethereum fork created two versions—ETH, which runs on the new proof of stake mechanism, and ETHW, which runs on the older proof of work consensus mechanism.
According to Coinmarketcap data, ETHPoW (ETHW) was down by 36.58 per cent in the last 24 hours to Monday morning. In the past seven days, the token dropped 83.16 per cent, while Ethereum (ETH) was down 24.78 per cent in the same period. As of 10.30 am on Monday, it was trading below $1,300.
ETHW runs on the older proof of work consensus mechanism, where complicated computer equations are solved to gain rewards in the form of Ethereum tokens.
Interestingly, the forked version of Ethereum has been the most trending crypto since the merge on September 15.
According to Vineet Budki, managing partner and CEO, Cypher Capital, a Dubai based venture capitalist firm, "We are still far away from the implementation of sharding on ETH which has promised to bring the much-required throughput and reduction in fees. ETH foundation plans to execute sharding by late next year."
"Until such a moment, we expect ETHW to co-exist in the ecosystem and foresee the demand for POW mining to gradually fade away over time," Budki further added.
Binance Clarifies Its Position On Forked Ethereum (ETHW): In a Tweet, Binance, the world’s largest crypto exchange by volume, has clarified that “If the potential Ethereum Proof-of-Work chain (ETHW) is successfully implemented, eligible users will be credited ETHW at a ratio of 1 ETH = 1 ETHW in their Spot wallets.”
Binance further clarified that they will notify users in a separate announcement after the distribution (1 ETH = 1 ETHW) is complete and when deposits and withdrawals for ETHW are enabled or if in case the ETHW chain is unsuccessful.
Regarding listing the forked version of Ethereum (ETHW), Binance said that their support for the token’s distribution does not automatically mean they will list it since it will have to go through their internal listing process and requirements first.
Grayscale Investments To Liquidate Its ETHW Rights: On September 16, Grayscale Investments, the world’s largest crypto asset management company, filed a declaration with the US Securities and Exchange Commission (SEC) regarding ETHPoW (ETHW). Grayscale, which has invested in Ethereum, received more than three million ETHPoW token rights after the merge. The company said it appointed an agent to acquire the tokens before selling them and distributing the cash proceeds to shareholders, possibly within 180 days.
“The agent, on behalf of the record date shareholders of each product, will look to acquire the ETHPoW tokens as soon as practicable after the receipt of the rights from the applicable product and sell them
over a period, which is currently not expected to exceed 180 days,” said Grayscale in a declaration to the SEC.
FTX, Houbi Global, Among Exchanges Listing ETHW: Media reported that crypto exchanges like FTX, Houbi Global, Kraken, and Bitrue had listed the ETHW token on their platforms. According to Investopedia, FTX recorded a trading volume of about $47 million at one point in ETHW trading.
OKK, a Seychelles-based crypto wallet and exchange, said in a press release that it had enabled spot, margin, and perpetual trades for ETHW since the Ethereum merge.
Bitrue also launched an ETHW interest-yielding product on September 16. Its current annual percentage yield (APY) is six per cent.
In an interview with Coindesk on September 16, Chandler Guo, a crypto miner, said that 90 per cent of Ethereum miners could go bankrupt soon since Ethereum no longer needs expensive graphics cards and other hardware to mint new tokens.
According to a report by digital media publication Tom’s Hardware, unless proof of work token miners who are using their graphics cards like Nvidia GeForce RTX 3090, AMD Radeon RX 6800 or 6800XT, with an electricity cost of about $0.1 per kilowatt-hour, “they won’t be profitable.” This graphics-card configuration will yield about $0.06 daily after factoring in electricity costs.
