Ethereum Miners Will Freeze Liquidity Pool After Hard Fork
With the upcoming Ethereum upgrade Merge, there has been a variety of reactions from the crypto industry. The upgrade is expected to migrate the Ethereum blockchain to a Proof of Stake (PoS) mechanism using the Proof of Work (PoW) consensus mechanism.
This transition will change the transaction verification process from mining to staking. Because of this, many people are getting different ideas of what to expect during and after the transition.
While there is a waiting period for defragmentation, many have expressed concerns about some potential hard forks. Additionally, there are some miners on the Ethereum network that are still working on the system, creating more tension within and outside the community.
With the completion of the merge, miners can switch to Ethereum Classic, which still works as PoW. But if they continued to work on the Ethereum blockchain, they would hard fork the chain.
In a recent paper , some Ethereum miners announced a technology to freeze their liquidity pools. This one came mainly from the ETHPOW group. This group of miners plans to hard fork the Ethereum blockchain after its transition.
The ETHPOW group has released its plan to freeze some lending protocols and smart contracts on its Twitter platform.
In addition, the group announced that ETHW tokens deposited in different liquidity pools of clients will be a compromise. Some listed pools that may be affected include Aave, Compound, and Uniswap.
The group clarified that the freeze action along with its plan does not include any stock contracts that deal with a single asset. However, the ETHW core advises clients to remove their deposits from all liquidity pools. This is largely about lending platforms and decentralized exchanges.
The group said in a statement that its action is to ensure users are protected from hackers and scammers. He mentioned that hackers and other bad actors can easily exchange deposited tokens for less valuable WBTC, USDT and USDC. Therefore, it has decided to freeze the smart contracts of the credit pools expecting a better solution from the platforms.
Reactions to Ethereum Miners Plan
Following the post by Ethereum miners, several people criticized the move. Most cryptocurrencies and influencers are not left out in the reactions. However, Foobar, a developer and blockchain auditor, questions the group’s capacity to carry out its absurd plan.
Also, Gamium Corp CEO Alberto Rosas is skeptical of the decentralization of the Ethereum blockchain. He argued that this move was too big for a small group to succeed. For him, the ETHW chain could end up as a slow centralized chain with no market cap.
It’s pretty clear that Ethereum miners are putting pressure on the entire ecosystem with their freeze plans.