The lack of Oracle support, the majority of DApps that support fusion, and minimal developer activity on Ethereum Classic suggest that PoW hard forks will disappear.
Ether (ETH) is the second largest cryptocurrency by market capitalization and the absolute leader in decentralized applications through deposits. A victim of its own success, fees increased in November 2021 when the average transaction value exceeded $50.
That’s why merging is an important step in implementing a fully featured scaling solution. Confirmation of the transition to Proof-of-Stake (PoS) consensus was the main driver of the August 15 move to $2,000.
Investors were partly excited about the shortened issuance schedule and the likely move to a deflationary scenario, but there is also an expectation of impending forks. As a result, hard fork coins can be issued to Ether holders on different blockchains, although there is no guarantee that they will find support or sufficient liquidity.
On the one hand, there is a temptation to get free money and even non-fungible bonus tokens (NFTs), since the forked chain is initiated with the same state as the original Ethereum network, meaning that each address has exactly the same content in relation to it on tokens and contains the transaction history.
On the other hand, there is also a feeling of disappointment following the agonizing 29% Ether correction that occurred after the $2,000 resistance proved more difficult than expected. Perhaps when investors realized that the practical benefits of forks would be much less than expected, the euphoric expectation of free money dissipated and reality set in.
For now, ETHPoW is a possible new chain powered by Proof-of-Work (PoW) miners. Some exchanges have begun trading futures on the native asset of the ETHW forkchain. The markets appear to have made their decision as the contract is now trading below $55 on Poloniex and Gate.io.
No support and oracle support for forked stablecoins
The two leading stablecoins, namely USD Coin (USDC) and Tether (USDT), have officially confirmed their intention to exclusively support the Ethereum Foundation-backed merger chain. Cointelegraph previously reported that given the dominance of the two stablecoins, issuer support “should lead to a smooth transition for Ethereum.”
Meanwhile, the EthereumPoW (ETHW) core team has said it will temporarily freeze tokens in certain DeFi application liquidity pools to protect user assets after the hard fork.
Many people did not like the idea of freezing users’ assets without their consent. Some users have called the Twitter account behind EthereumPoW a scam because the community did not vote for any such change.
DApps go beyond simply facilitating transactions as they require off-chain computing when interacting with external data, and this is where blockchain oracle technology comes into play.
Chainlink improves smart contracts by linking them to real data, events and transactions. In an official statement dated August 8, the protocol announced that its services would remain on the Ethereum PoS blockchain backed by the Ethereum Foundation.
Related: MakerDAO co-founder recommends depegging DAI-USD to limit attack surface
Leading DApps will urge users to say goodbye to fork tokens
On August 16, Aave (AAVE) holders were asked to vote to “accept” the Ethereum PoS consensus, which allows authorities to stop all Aave deployments on all alternative Ethereum forks.
While Aave was developed purely as an Ethereum application, it has evolved into Interchain over the years, with official versions currently running on Avalanche, Arbitrum, Optimism, Polygon, Fantom, and Harmony.
Investors are beginning to realize that DApps and stablecoins will not support forked chains, meaning that “free” tokens and NFTs are less likely to be accepted on marketplaces and in leading DeFi applications. Regardless of the value of the ETHPow token, the utility of the Ethereum Foundation-backed PoS network far exceeds that of competing chains.
The value of Ethereum Classic has never risen
Ethereum Classic (ETC) is a pre-existing example that supports the thesis that the competing chain is the price.