Poloniex Exchange Prepares For 2 Chain Ethereum Scenario

By August 4, 2022DeFi
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Poloniex said it would list 2 special tokens to prepare for the scenario where Ethereum will split the chain after The Merge.
Poloniex Exchange Prepares For 2 Chain Ethereum Scenario
Poloniex Exchange Prepares For 2 Chain Ethereum Scenario 1

On August 4, Poloniex announced that it would create two special tokens to represent two different versions of the Ethereum chain that could emerge after The Merge event. This is the first exchange to have this move.

The exchange will allow users to convert their ETH into 2 special tokens, ETHS and ETHW. Specifically, ETHS is the coin that represents the Ethereum chain using Proof-of-Stake and ETHW is the coin that represents the Ethereum chain using Proof-of-Work.

The conversion rate will be 1:1 for ETHW/ETH and ETHS/ETH pairs. The exchange will consider adding other trading pairs in the future. ETHS and ETHW will only exist on Poloniex and cannot deposit/withdraw to external wallets.

Before The Merge event, Poloniex will capture the balance of all accounts containing ETHS. After Ethereum conducts this upgrade, if a chain split occurs, the exchange will convert ETHS to ETH using PoS at a 1:1 ratio for all users.

Meanwhile, the Ethereum chain using Proof-of-Work with the highest hashrate will be chosen by Poloniex as the main blockchain to be converted to ETHW. It can be seen that the exchange has also prepared for the scenario where there is more than one Ethereum chain using PoW to appear.

Poloniex Exchange Prepares For 2 Chain Ethereum Scenario
Poloniex Exchange Prepares For 2 Chain Ethereum Scenario 2

Conversely, if The Merge happens smoothly and no unit splits the Ethereum chain to retain Proof-of-Work, ETH will continue to be traded usually on the exchange, and two ETHS and ETHW coins will be canceled.

Poloniex used to be one of the leading exchanges in the crypto space. However, after many wrong moves by the management team, the exchange’s position decreased significantly from 2017-2020. Since then, TRON founder Justin Sun bought it in 2019 and turned it into a part of the TRON ecosystem.

Poloniex Exchange Prepares For 2 Chain Ethereum Scenario
Poloniex Exchange Prepares For 2 Chain Ethereum Scenario 3

Justin Sun claims to hold more than 1 million ETH, and if a hard fork occurs in two chains, TRON will donate a certain amount of ETHW to help the new project develop the ecosystem.

Justin Sun is said to hold a large amount of ETH and is actively involved in farming on Ethereum’s DeFi protocols.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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