Binance Will Support Ethereum Merging, Consider Fork Tokens
Important takeaways
- Binance has said it is “monitoring” Ethereum’s upcoming “Merge” event and plans to evaluate potential fork tokens based on the support they receive.
- With Ethereum’s move to Proof-of-Stake approaching, some community members plan to split the blockchain to preserve a Proof-of-Work network.
- Ethereum is expected to ship the merge in mid-September, but the date is not yet final.
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The Binance update comes as some members of the crypto community push to preserve a Proof-of-Work version of Ethereum after the “merger”.
Binance May List Ethereum Forks
The world’s largest cryptocurrency exchange will support Ethereum’s landmark “Merge” event, and may go so far as to list some Ethereum fork tokens.
In a Wednesday blog post, Binance said it is “closely monitoring” the merger and will support it at launch. The exchange noted that the event could potentially lead to the creation of some forked Ethereum tokens, adding that it would “evaluate support for the distribution and withdrawal of the forked tokens.” In other words, Binance has indicated that it plans to support the Proof-of-Stake version of ETH as the decisive update, but it has not ruled out listing other ETH-related fork tokens.
Ethereum’s so-called “Merge” update is considered to be one of the biggest crypto events in recent years. It will see the number one smart contract blockchain “merge” its current Proof-of-Work execution layer with a Proof-of-Stake consensus layer, moving the network to a new consensus mechanism that relies on validators instead of miners. The upgrade, which is currently being tested and is set to ship in mid-September, is expected to reduce Ethereum’s energy consumption by 99.9% and reduce ETH issuance by approximately 90% because the network no longer needs to pay miners to add new blocks to the chain.
Support for Proof-of-Work Fork
While the Ethereum community has widely supported the merger, there has been some backlash over the impact it will have on miners. As a result, some notable names in the crypto community – TRON founder Justin Sun and established miner Chandler Gou among them – have backed a plan to split the Ethereum blockchain to preserve a Proof-of-Work network. If a fork happens, it will likely lead to the creation of new ETH tokens, which is why Binance has said it will review any new coins.
Circle and Tether, the issuers of the USDC and USDT stablecoins, announced that they would exclusively support Proof-of-Stake Ethereum following their merger yesterday. For exchanges in the business of making relevant assets available for trading, the Proof-of-Work Ethereum plans present a potentially lucrative opportunity. Sun-backed Poloniex said it would support two potential hard fork tokens earlier this week, but so far none of the major exchanges have committed to listing any new tokens.
Ethereum is set to complete its final Merge testnet early Thursday, with the date for the Mainnet Merge to be completed sometime after.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
