In the dynamic world of cryptocurrency, network upgrades and forks are significant events that require clear communication and precise action from trading platforms. AAX Exchange provided a detailed plan for handling the Bitcoin Cash (BCH) upgrade and fork, scheduled for November 2020. This article breaks down their approach, explaining the key timelines, service adjustments, and user protections implemented during this period.
Understanding the Bitcoin Cash Upgrade and Fork
A fork occurs when a blockchain splits into two separate paths, often due to changes in the protocol or fundamental disagreements within the community. These events can be planned upgrades or contentious hard forks that result in a new cryptocurrency.
The November 2020 BCH event was one such significant network update. For exchanges like AAX, supporting these events requires careful planning to ensure user assets are protected and all processes run smoothly.
Key Dates and Timelines for the BCH Event
AAX announced that the upgrade was anticipated to occur around 8:00 PM Hong Kong Time on November 15, 2020. To prepare for this, the exchange implemented a structured timeline.
All BCH deposit and withdrawal services were temporarily suspended starting at 6:00 PM HKT on November 15th. This precautionary measure is standard practice to prevent any transaction conflicts or losses during the unstable period of a chain split.
Additionally, all BCH spot trading pairs were paused at this time. However, the BCHUSDT perpetual contract market remained operational, allowing traders to continue their derivative strategies during the fork.
Service Adjustments During the Fork Period
The temporary halt on deposits, withdrawals, and spot trading is a common procedural step. It allows the exchange to safely take a snapshot of user balances without any ongoing transactions affecting the record.
For users participating in AAX's savings products, such as the BCH "Chaochao Ying" program, interest distributions continued as usual. This ensured that users did not miss out on expected earnings due to the network event.
The Snapshot Process and Asset Distribution
A critical part of managing a fork is the snapshot. AAX took a snapshot of BCH holdings across all user accounts—including spot, contract, fiat, and financial account types—just before the upgrade.
This snapshot served as the official record for distributing any new tokens that might emerge from the fork. The process is designed to be fair and transparent, ensuring that every user's holdings are accurately recorded.
Handling the New Forked Asset
The outcome of some forks is two distinct blockchains and assets. AAX stated that should a new coin be created, they would support the chain that garnered the most community support, which would retain the BCH ticker.
The other chain’s token would be distributed to users via an airdrop. The airdrop ratio was set at 1:1, based on the snapshot taken at 8:00 PM HKT on November 15th. This meant users received one new token for every BCH they held at that time.
This approach allows users to benefit from the new asset without needing to take any immediate action themselves. For a deeper look into how leading platforms manage such technical events, you can explore more strategies used in the industry.
Frequently Asked Questions
What is a cryptocurrency fork?
A fork is a change to the software protocol of a blockchain that can result in two separate versions of the chain. A hard fork is a permanent divergence, often creating a new cryptocurrency, while a soft fork is backward-compatible.
Why did AAX suspend BCH deposits and withdrawals?
Exchanges suspend deposits and withdrawals during a fork to prevent transaction reversals or losses that can occur due to network instability. This ensures a clean and accurate snapshot of all user balances can be taken.
Did trading completely stop on AAX during the fork?
No. While spot trading for BCH pairs was paused, the BCHUSDT perpetual contract market continued to operate, allowing traders to manage their positions in the derivatives market.
How did AAX determine which chain would be called BCH?
AAX committed to following the consensus of the broader BCH community, naming the chain with the most miner and user support as BCH. This is a common practice to minimize confusion and align with the dominant network.
What happened to the new forked token?
The token on the less-supported chain was distributed to users via a 1:1 airdrop based on their BCH balance at the time of the snapshot. This token was then credited to their AAX accounts.
Was there any risk to my BCH holdings on AAX during the fork?
AAX's procedures were designed to protect user assets. By pausing certain services and using a snapshot, the exchange ensured that user holdings were safe and that they would receive any new tokens they were entitled to.