Home Ethereum Will the new tokens be airdropped to ETH holders after the Ethereum hard fork?

Will the new tokens be airdropped to ETH holders after the Ethereum hard fork?

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Will the new tokens be airdropped to ETH holders after the Ethereum hard fork?

It’s safe to say that most of the crypto-related conversation right now is centered around Ethereum’s merging of proof-of-work (PoW) to proof-of-stake (PoS).

Known as “The Merge”, this event is the first of its kind and is the most significant upgrade in Ethereum’s lifetime. We have prepared a dedicated guide, and if you want to know everything about it, you can consult it here.

However, with something of this magnitude set to happen in about a month (barring unforeseen circumstances), there are also plenty of questions worth considering.

For example, some notable exchanges have announced hard fork support, and they have stated that they will also support trading the resulting tokens. This raises the question of whether users will receive new tokens after the merger, and that’s what we’ll explore in this article.

To understand whether or not you are going to receive new tokens, there are a few important clarifications to consider. Let’s unpack.

What happens after the merger?

As mentioned above, The Merge will mark the end of ETH mining. This is due to the new consensus algorithm – proof of stake – which has entirely different economic implications for the network.

With PoS, network validators no longer need to compete to solve increasingly complex computational problems. Instead, they are randomly selected based on the stake they have in the network.

That said, switching to PoS has a few important advantages:

  • Makes it easier to run a knot
  • Consumes much less electricity
  • Unlocks additional possibilities such as sharding

However, there are those who also make strong arguments about the disadvantages of proof-of-stake networks. Without going into details, it is important to understand that many people support proof of work. Namely, and somewhat expectedly, some ETH miners and mining groups have joined forces to push for a hard fork that would also see the creation of a new token that will remain on the PoW consensus algorithm.

This is where things get interesting.

Will there be a hard fork?

To answer this question, we first need to look at what a hard fork is. It can be described as a permanent divergence from the latest version of the blockchain, which leads to a separation of the blockchain. Some nodes will no longer meet consensus, which means there are two different versions of the network operating separately.

By this definition, the merger is a hard fork because it will mark the end of the proof-of-work blockchain and the start of a new one that is powered by proof-of-stake.

However, for a hard fork to have economic or social significance, it needs to be supported – there must be nodes that will continue to operate on the old network.

Justin Sun – the founder of TRON – has stirred the waters considerably over the past few weeks, who claimed to hold over 1 million ETH.

“We currently have over a million ETH. If the Ethereum hard fork is successful, we will donate forked ETHW to the ETHW community and developers to build the Ethereum ecosystem.

This was in response to Poloniex (a cryptocurrency exchange he owns) indicating that they will be “the first to support the potential forking of ETH with a list of two potential ETH tokens: ETHS and ETHW”.

Other exchanges that have announced support for the hard fork and the tokens that may come out of it include BitMEX, which will even enable leverage for POW-based ETH post-merger.

The world’s first cryptocurrency exchange, Binance, said:

“In the event of new forked tokens, Binance will assess support for the distribution and withdrawal of forked tokens.”

What does Vitalik Buterin think?

Speaking at a developer event called ETH Seoul from August 5-7, Vitalik Buterin shared his concerns.

First, he dismissed the possibility that a potential fork would harm Ethereum “significantly.” Discussing new forks, he argued that this is what Ethereum Classic is for.

Vitalik_Buterin

“I think Ethereum Classic already has a superior community and a superior product for people with these proof-of-work values ​​and preferences. […] Almost everyone in the Ethereum ecosystem supports the move to proof-of-stake validation and is pretty united.

Moreover, he even stated that those who support the trading of potential tokens resulting from the hard fork are trying to make a quick profit.

Will ETH holders receive new Airdrop tokens?

As of this writing, it’s unclear how the whole situation will play out, as all of the above largely depends on whether or not the merger succeeds.

In any case, it is also up to the exchanges that support the resulting tokens to determine how ETH holders will receive them and how much they will get.

If one thing is certain, however, it is that Vitalik Buterin, as well as the Ethereum Foundation, strongly oppose it and have openly rejected any support for forked tokens.

It should also be noted that during events of this magnitude, some will try to take advantage and scam unsuspecting users of their ETH. Therefore, it is highly recommended to take a look at some of the the most common ETH 2.0 scams and keep in mind that promising an airdrop is one of the most popular ways of phishing and scamming victims of their funds.

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