The ETH network’s merge with the beacon chain is just two weeks away. Since its announcement in mid-August, this Bellatrix merge has been one of the biggest buzzwords on the lips of everyone in the crypto community. The logic behind the merge is simple.
- The Ethereum network moves from a proof of work (POW) mechanism to a proof of stake (POS) mechanism.
- There will be no need for miners anymore, as ETH holders can now become validators and secure the network.
However, moving from proof of work to proof of stake can be a problem for the miners as it would mark the end of mining and, therefore, their activities. As a counter-argument to this, many have considered the possibility of the miners creating a fork of the POW version of the Ethereum Network, so they can continue mining.
If such a fork happens, it will produce two new competing blockchains: One in which the miners can continue their activities and another that operates completely on the new POS protocol. Recently, Bobby Ong, Co-Founder of CoinGecko, shared his thoughts about the matter, highlighting ways for ETH holders to take advantage of this fork when it happens.
How to Stay Profitable from ETH Merge
In a Twitter thread, the CoinGecko cofounder shared his strategies for making profits and staying safe in the upcoming merge.
According to Ong, ETH holders who had tokens before the merge will get airdrops of the new ETH proof of work tokens and can make a few clever moves to take advantage of this. Among the seven tips Ong shared, the first and easiest way to ‘hold eth in a wallet that supports the fork.’
He also noted that some exchanges may or may not give out forked tokens, and having full custody of one’s ETH in a hardware wallet is the most effective way to take advantage of this airdrop.
To maximize how much users get, Ong noted that it might be a good idea for users to:
- Bridge all tokens back to the ETH mainnet
- Unwrap all wrapped ether (WEth)
- Remove liquidity from Defi protocols
Ong noted that claiming all airdrops might be unwise because some are bound to be scam attempts to access users’ private keys. ‘Sell them all immediately’, he says. “Almost all the fork tokens are now dead as they are created solely to keep miners temporarily occupied with mining and have no incentive to grow their community and usage.”
Meanwhile, OpenSea, the NFT buy-sell platform, has stated that it will not support post-merge ‘forked NFTs’ on its platform. The NFT marketplace has made it clear that it would concentrate on serving just the NFTs that are on the enhanced proof of stake protocol. This comes as a measure to ensure a seamless transition along with the ETH network.