Despite ETH Merge Enthusiasm, One Exchange Launches "Potential" Hard Fork Token
TRON Founder H.E. Justin Sun has launched two new tokens on his exchange, ETHS and ETHW.
While the majority of the crypto community seems to be in favor of the upcoming Ethereum merge, there are those like H.E. Justin Sun who would prefer to maintain a Proof of Work protocol (PoW). For this reason, Sun has launched what he calls “potential” hard fork tokens on his exchange Poloniex.
— H.E. Justin Sun??? (@justinsuntron) August 7, 2022
Sun’s exchange has listed two new tokens, ETHS which represents Ethereum under a proof-of-stake (PoS) standard, and ETHW represents Ethereum under a PoW standard. Both tokens are considered “potential” fork tokens and are only available to be redeemed on a one-to-one ratio prior to The Merge.
The exchange denotes these tokens as “IOU” or “I owe you” — this is due to the fact that no hard fork has taken place and because there is a chance it never will.
Granted the hard fork does happen, the idea would be to create a parallel blockchain after The Merge, which would allow for continued mining of the related token through PoW. Whereas, after ETH moves to PoS, mining will cease to exist.
Users of the Poloniex exchange are already able to swap their ETH for ETHS or ETHW, but as stated the only way to cash out on such pairs is by swapping back into ETH prior to the merge — deposits and withdrawals of the “potential fork” tokens themselves are not supported.
On its site, Sun’s exchange shares a “Risk Alert,” in that if the fork fails, both ETHS and ETHW would be delisted from its platform. Owners of ETHS would have their tokens converted to the new ETH 2.0 tokens, however, holders of ETHW would lose all value. The exchange warns users to “please be cautious about the potential risk involved.”
While he has garnered some support for his “potential” hard fork tokens, there are several members of the community in the announcements comment section that remain skeptical and hesitant of the founder’s intentions — however, the platform has shared the associated risk with trading these pairs and the decision is ultimately up to the individual trader.