Most in the industry are looking forward to the Ethereum merge. Justin Sun isn’t one of them.
- Hard Fork Planned By Miners
- Justin Sun And What This Means For Ethereum
Hard Fork Planned By Miners
A group of Ethereum miners, mainly based out of China, have proposed a hard fork of Ethereum when the smart contract protocol moves to proof-of-stake (PoS) consensus. The proposed hard fork is currently being referred to as EthereumPOW.
The Ethereum merge is largely supported because proof-of-work (PoW) consensus has made it difficult to maintain or bring in new users to crypto thanks to high gas prices and slower transaction speeds. Not to mention, the PR around the environmental impacts of PoW make it difficult for corporate initiatives into the NFT and play-to-earn space.
The idea of a hard fork isn’t surprising in this situation. The move from PoW to POS for Ethereum means that many miners will see their business model change. PoS staking rewards more APY based on how much of a token you have, meaning it’s lucrative to have a lot of ETH in the bank. With PoW, earning ETH didn’t require keeping it.
Miners are often forced to sell what they earn because equipment (like GPUs) and the power are expensive. Also, any equipment they’ve bought isn’t necessary and a sunk cost now. So the incentive is out there.
But the question is why is the infamous Justin Sun getting involved?
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Justin Sun And What This Means For Ethereum
“We currently have more than 1 million ETH,” Sun said in a Thursday tweet. “If Ethereum hard fork succeeds, we will donate some forked #ETHW to #ETHW community and developers to build Ethereum ecosystem,” Sun said via Twitter.
Sun is the founder of Tron, which is a smart contract protocol that’s already on PoS. For whatever reason, he’s decided to support the miners. It can’t be because he’s worried about the competition from Ethereum because that would be self-flattery — Tron is akin to an actual ghost chain.
Though, where Tron lacks in development heft or an actual community, it makes up for it with Sun’s mysterious billions. For whatever reason, Sun has made it big in crypto without being particularly innovative — then again he wouldn’t be the first to stake claim to that. Nevertheless, that money is for real and it talks. For example, the Tron-supported crypto exchange Poloniex is also supporting the hard fork.
What does this mean for Ethereum? Should Vitalik and co. be shaking in their boots? Absolutely not.
Sure, PoW miners will get a development boost from Sun, but the only ones sticking around will be miners. Developers have little incentive to want to develop on a proof-of-work chain if it means bad PR, expensive gas fees, and slow transactions. It’s just bad for business for everyone, but the people who poured thousands into GPUs.
It’s unfortunate, but maybe they could use some of those Sun bucks to cash out.
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