Tether, Circle Pledge Support for Proof-of-Stake Ethereum
Important takeaways
- Tether and Circle will only support assets on Ethereum’s Proof-of-Stake chain after the merger, both companies announced today.
- Tether said the merger should not be “weaponized” against the Ethereum community, while Circle stated that only a “single valid ‘version'” of USDC could exist.
- Some of Ethereum’s miners plan to fork Ethereum when it transitions to Proof-of-Work to keep a Proof-of-Work version going.
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Neither USDT nor USDC will be backed by reserves on a potential Ethereum Proof-of-Work fork, Tether and Circle announced today.
Proof-of-Stake Ethereum Solidifies Support
Ethereum’s potential Proof-of-Work fork fails to gain support.
Tether and Circle, the two largest centralized stablecoin issuers in the crypto space, both announced today that they will support Ethereum’s transition to Proof-of-Stake and not a potential Proof-of-Work fork.
Tether stated in a blog posts that Ethereum’s move to Proof-of-Stake should not be “weaponized” and cause disruption to decentralized finance protocols (DeFi), centralized platforms and the crypto community at large. Circle declared that, regardless of Ethereum forks, it is The USDC stablecoin could “only exist as a single valid ‘version'” and that the company fully supported Ethereum’s upgrade to Proof-of-Stake.
Ethereum is set to change its consensus algorithm from Proof-of-Work to Proof-of-Stake, a highly anticipated transition known in the crypto community as “the Merge”. Upon completion of the merger, Proof-of-Work miners will become obsolete since consensus will be reached through another set of network participants called validators. This has recently led prominent figures in the Chinese mining community to state that they will fork Ethereum to keep a Proof-of-Work version going even after the blockchain officially switches to Proof-of-Stake. Tron founder Justin Sun has tired he would support such a plan.
Tether and Circle’s decision to support Ethereum’s future Proof-of-Stake chain instead of a potential Proof-of-Work chain casts doubt on the long-term viability of the mining-led initiative, as neither USDT nor USDC on Proof- the of-Work chain will be supported by reserves. And while crypto exchanges BitMEX and Poloniex have listed a token for the Proof-of-Work (ETHW) chain, interest in it has been low So far.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
