The leader of the exchanges has just announced various provisions after the Ethereum Merge. The platform will refund its customers affected by a potential Ethereum fork after it has been moved to proof-of-stake.
An upcoming Ethereum fork?
The Crypto Industry Prepares for an Ethereum Merge, which will probably happen in the second half of September. This shift of Ethereum from a proof-of-work consensus mechanism to proof-of-stake is being scrutinized by the entire crypto market and beyond.
Recently, there has been a debate within the crypto community: Ethereum fork after the Merger. It is especially Chandler Guo, known minor from the Ethereum community who was one of the first to raise this tough question. He particularly mentioned the possibility of forking Ethereum to keep blockchain as a proof of work and therefore keep the mining on it.
However, it is a dangerous idea for some people as it would merge two blockchains and put various DeFi applications in particular at risk.
Some players like Bitfinex are benefiting from this debate. In fact, the exchange sends you to bet on the winning Ethereum fork. For this, Bitfinex issued two different tokens: ETHS to represent Ethereum as proof of stake and ETHW to represent Ethereum as proof of work. Way to get a few extra dollars for the exchange!
Binance will refund injured users
To address this issue of a possible fork, Binance offers to refund affected users. For this, the exchange offers a refund in an amount equal to their ETH deposits. With this announcement, Binance emphasizes its support for users regardless of the outcome of the Ethereum Merge.
In addition to these measures, Binance announced that it will freeze Ether deposits and withdrawals but also ERC-20 tokens (running on the Ethereum blockchain) during the Bellatrix and Paris updates. These last implementations will take place on 6 and 15 September. These are the last two steps before the final transition to proofs in question.
#Ethereum Migrate to the PoS chain at approximately 12:30am UTC on September 15, 2022.
Before any implications that may arise from this event, #binance taking steps to reduce trading risks and preserve SAFU users’ funds.
🧵 on some things to note about our plans for The Merge.
— Binance (@binance) August 25, 2022
Binance considered two cases
According to the exchange, there are likely to be two scenarios for the Ethereum Merge job. The first case, the mainnet does not undergo any fork and therefore no signal is created. In this case, the deposits and withdrawals will resume as soon as possible.
The second case, we are witnessing the fork of Ethereum and thus the birth of a new token. The proof-of-stake version of Ethereum will retain its name of ETH. Binance will take a snapshot (capture the fund state) before the Paris update and a one-to-one distribution will be done.
Finally Binance specifies that customers who have put ETH in the BETH pool will not be able to no deposits or withdrawals to be made from 14 to 16 September. Same for ETH stacking which will not be possible during the Merger. These will be restored once the switch is made.
As for the trading part, the exchange giant has no worries. It will be possible to trade ETH pairs under almost normal conditions. In fact, Binance recalls that, given the exceptional circumstances,. volatility is likely to be even higher than usual.
As expected, the Merger requires a lot of adjustments and Binance as the leader of the exchanges must force itself to do so. As to the probabilities of a fork, there are many competing opinions. However, some observers seem to believe in a second Ethereum blockchain in the long term, given the even temporary uncertainty that would result from such an event.
In addition, many people think that such a hard fork would be of no interest in creating a proof-of-work blockchain. that Ethereum Classic already exists.
In recent months we have seen Ethereum miners move to Ethereum Classic or other blockchains to continue their activity. Also, the Ethereum consensus change is widely accepted by the crypto ecosystem and should go smoothly. The final testing stages went well and there is no doubt that the Ethereum core team is preparing this event with the greatest attention.
To learn more about Merge Ethereum, find our article here.