As Ethereum's highly anticipated Merge approaches, transitioning the network from Proof-of-Work (PoW) to Proof-of-Stake (PoS), the possibility of a chain split has sparked intense debate. Various exchanges, projects, and influential figures within the ecosystem are now publicly choosing sides, setting the stage for a significant community divergence.
Exchange Stances on the Potential Fork
Gate.io Supports the Fork and Early Token Conversion
Gate.io is one of the first exchanges to openly support the potential Ethereum fork. According to its official announcement, the platform will enable users to convert their ETH into ETHS or ETHW at a 1:1 ratio between August 9 and the successful completion of the ETH 2.0 upgrade. ETHS represents the new PoS chain token, while ETHW would be the token of any persisting PoW chain. The exchange also stated that should the hard fork fail, ETHS would automatically convert to the upgraded ETH at a 1:1 ratio, and all related markets would be delisted.
Poloniex Backs the Fork and Lists Futures
Poloniex has announced its full support for the Ethereum upgrade and any potential fork. The exchange confirmed that if a split occurs, all users holding ETH assets would receive the new forked assets at a 1:1 ratio.
Huobi Respects Community Consensus with Caution
In an August 5 announcement, Huobi stated that it respects community consensus regarding the hard fork but does not encourage forks that lack genuine innovation or improvement. The exchange opposes any form of pre-mining. Huobi outlined five criteria for handling forked assets, emphasizing security, replay protection, and proper client software testing. It also urged other industry platforms to adopt similar standards for fork assessment.
OKX to Evaluate Listing Forked Tokens Based on Demand
OKX CEO Jay Hao indicated via Twitter on August 8 that the exchange is actively monitoring and will support the Ethereum Merge. Should a hard fork occur, OKX will evaluate listing the forked tokens based on market demand.
BitMEX Launches ETHPoW Futures Contract
BitMEX announced on August 8 the launch of an ETHPoZ futures contract (ETHPOWZ22) on August 9. The contract will be margined in USDT (ERC-20) and offer up to 2x leverage.
Other major exchanges, including Binance, Coinbase, and KuCoin, have not yet publicly commented on their positions regarding the Ethereum hard fork.
Project and Protocol Positions
Leading projects and protocols have largely expressed opposition to a potential Ethereum hard fork.
Chainlink Will Not Support Any Forked Chains
Chainlink has confirmed that its protocol and services will continue operating on Ethereum during and after the Merge. It will not support any forked chains, including a PoW fork, aligning with the broader Ethereum community's decision.
Argent and DeBank Oppose the Fork
Smart contract wallet Argent expressed excitement for the Merge but has no plans to support any fork. DeBank, a popular DeFi wallet, tweeted on August 9 that a hard fork would be catastrophic for the Web3 ecosystem and stated it would not support any forked chains during the transition.
Frax Finance Proposes Official Support for PoS Ethereum
Frax Finance co-founder Sam Kazemian has initiated a community proposal for the Frax DAO to recognize only the PoS Ethereum chain post-Merge for its stablecoin operations. The proposal highlights Frax's significant role in the Ethereum ecosystem and the importance of a clear governance decision.
Curve Finance Acknowledges Inevitable DAO Cloning
Curve Finance noted that its DAO is too decentralized to强制 choose one chain over another. A hard fork would inevitably clone the DAO and its CRV token, but the viable chain for Curve will be the one chosen by major stablecoins.
Vitalik Buterin, Ethereum's co-founder, recently stated at the BUIDL Asia conference that centralized stablecoins like USDC and USDT will be critical decision-makers in any future hard fork.
Influential Community Perspectives
Crypto Pragmatist founder Jack Niewold has compared a potential Ethereum hard fork to an "internal war." He argues that a PoW fork would become a "ghost town" devoid of developer activity, speculation, media coverage, or a way to cash out into fiat currency, as the merged chain is widely considered the legitimate Ethereum.
Niewold echoes Vitalik's concern that stablecoin issuers like Tether (USDT) and Circle (USDC) will play a pivotal role. However, he raises a alarming possibility: these issuers could have a significant economic incentive to support the PoW chain. By shorting the PoS ETH token and announcing redemptions on the PoW network, they could potentially profit massively, causing chaos, liquidations, and widespread damage to the crypto market. While such actions would likely be illegal, the profits could fund formidable legal defenses.
Despite this doomsday scenario, Niewold believes it is logically improbable. The overwhelming social consensus is that the post-Merge PoS chain is the true Ethereum, making a PoW fork unsustainable due to a lack of support and technical challenges like the difficulty bomb.
Potential Market Impact of the Fork
The debate is already causing ripples in the market. For instance, stETH (staked ETH) is currently trading at a 3.7% discount to ETH. stETH is a token representing ETH staked on Lido, intended to be pegged 1:1 with the underlying asset. This discount reflects market uncertainty and risk perception surrounding the Merge and any potential fork.
The alignment of key players is still evolving, and the situation remains fluid as the community moves closer to the Merge date.
Frequently Asked Questions
What is the Ethereum Merge?
The Merge represents Ethereum's transition from a Proof-of-Work consensus mechanism to Proof-of-Stake. It is designed to drastically reduce the network's energy consumption and set the stage for future scalability improvements.
Why is a hard fork being discussed?
Some miners and community members who wish to continue the Proof-of-Work model have proposed creating a new chain, splitting from the main Ethereum chain after it transitions to Proof-of-Stake.
Will I get free tokens if there is a fork?
If a hard fork occurs and you hold ETH in a self-custodied wallet where you control the private keys, you will likely have a claim on both chains. Exchanges have varying policies; some may support the distribution of forked tokens, while others may not. Always check your exchange's official announcement.
Which chain will be considered the 'real' Ethereum?
The broader ecosystem, including most major projects, developers, and users, considers the post-Merge Proof-of-Stake chain to be the canonical Ethereum chain due to its long-planned upgrade path and community consensus.
How do stablecoins affect the fork?
Stablecoin issuers like Tether and Circle must decide on which chain their assets will be redeemable. Their choice will significantly influence which chain retains economic value and liquidity, as many DeFi protocols rely on stablecoins. 👉 Explore more strategies for navigating market transitions
What are the risks of a hard fork?
A contentious hard fork could lead to market confusion, potential replay attacks, and a split in community and developer resources. It also creates uncertainty for DeFi protocols and could lead to short-term market volatility.