Ethereum Proof of Work Fork Pumps and Dumps Post Merger

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While the long-awaited Ethereum merger appears to have barely brought its price down at the time of the upgrade, one of its speculative offshoots has seen a storm of volatility.

Ethereum PoW (ETHW) – an Ethereum hard fork backed by a group of Ethereum miners – rose in value during the upgrade. However, it hit historic lows a few hours later.

The ETHW roller coaster

According to live price data from CoinGeckoETHW fell from around $30 at 9:30 p.m. UST on Wednesday to $51.88 an hour later.

The price slowly declined during the early morning hours, during which the Ethereum meltdown became official. Currently, the second-largest cryptocurrency by market capitalization uses a proof-of-stake consensus mechanism, eliminating all power-intensive mining from the network.

ETHW saw an aggressive dump around 4:30 a.m. Thursday, plunging $40 to $25 over the next hour. It only continued to slide after that, trading for just $19.46 at the time of writing – an all-time low.

Currently, ETHW value is not based on trading an actual cryptocurrency. Instead, it’s gleaned from trading data on a few select exchanges (including Gate.io, Poloniex, MEXC, FTX, Bybit, and others) in the form of an IOU of a token that doesn’t has not yet been launched.

ETHW seeks to retain the proof-of-work consensus mechanism that the merger left behind and continue to give miners a home. As a fork of the old Ethereum chain, ETHW will effectively drop duplicate tokens to anyone who held Ethereum before the merger.

Admittedly, the value of these new tokens depends on how the market perceives the legitimacy of the new chain. Given the number of large companies and Ethereum infrastructure providers that have expressed support for the canonical POS chain, experts believe it may struggle to succeed.

For example, Tether and Circle – the two largest stablecoin providers – have confirmed that they will only support token redemptions on the POS chain. This means that ETHW-based USDC and USDT tokens will lose their peg to the dollar, which will likely hurt trading and on-chain trading volume.

When will ETHW be launched?

ETHW is set to launch around 24 hours after the Ethereum merger. The unofficial Twitter account representing the ETHW has published various data resources for those looking to use the network, including an RPC URL and a block explorer.

So far, it seems that the ETHPoW hash rate is beaten by Ethereum Classic (ETHC), which absorbed a significant number of Ethereum miners after the merger. Vitalik Buterin personally recommended ETHC as a “good” proof-of-work alternative to Ethereum.

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