On the eve of the Ethereum merger (on the evening of September 5th), OKX & TokenInsight jointly launched “Talking About the Merger and Fork of Ethereum, How Can Ordinary Investors Participate?” “Themed AMA, TokenInsight CEO Wayne, OKX Web3 Wallet developer Zakk, Antpool developer Rory Hu, Lishuo founder Zhang Li, dForce founder Mindao and other guests discussed the merger and fork of Ethereum, and gave them from different perspectives. Judgments and opinions on the event itself and the development trend of the industry, as well as suggestions for ordinary investors, I hope to inspire you! Enjoy～
Wayne: Mr. Mindao, can you give the audience the background of the Ethereum merger?
Mindao: Okay, in fact, this merger is basically within expectations. When the Ethereum ICO, the white paper has already written that the future will be shifted from POW to POS. At that time, it was expected to be realized in 2018-2019, but it may be due to insufficient research on POS. , has been delayed so far. Of course, Ethereum is not the first to do POS. Public chains such as Eos in the last bull market and Solana in the last bull market all use the POS mechanism.
Now it is finally time to merge, the Ethereum community, smart contract participants and developers are actually looking forward to it, which is very friendly to them. On the one hand, the inflation of Ethereum will be reduced by about 90%, the GAS will also be reduced, and of course the income of miners will also be cancelled; on the other hand, it is more energy-efficient than before.
Wayne: Let me ask Rory Hu here. Antpool should be the first to express its attitude clearly. How do you think about the merger from the perspective of mining pools?
Rory Hu: Our attitude is very clear, that is to continue to support the POW ecology. Obtaining income through mining machine mining is like opening up a bridge between the physical world and the digital world. And POW has high security, high degree of decentralization, POS is relatively more centralized, and in the future, the logic of POS will be more and more similar to DPOS, the degree of centralization will be higher and higher, and the censorship resistance will also increase with If it weakens, the regulatory problem will become more and more serious.
Mindao: I personally don’t worry about this issue at all. Censorship resistance cannot be achieved simply by consensus algorithms, decentralization, and anonymity. The most effective anti-censorship ultimately depends on how many stakeholders can be bound, and the high dependence of the external system on the network is built through asset precipitation, ecological prosperity and application, and finally forces them to accept the established facts of technology neutrality and anti-censorship, allowing anti-censorship. Censorship has evolved into a part of social consensus at the legislative and judicial levels.
Wayne: What impact will the merger of Ethereum have on the cryptosphere? Will the existing public chain pattern be broken? Zakk can chat first.
Zakk: My personal opinion is definitely good, it means that Ethereum 2.0 is one step closer, and it is closer to solving industry-level problems. But for OKX, whether it is DeFi business or CeFi business, it is a platform that provides users with one-stop services. The focus is on users rather than on which chain. In theory, as long as users have needs, we will strive to meet them. Including the ETH fork chain, miners have needs, the community has needs, and users have needs, then our Web3 wallet will naturally support it, which is for DeFi. For Cex, there are more criteria to be evaluated. To evaluate whether the chain is truly valuable, it is hoped that we may have to wait until after the fork to observe. If the assets of the forked chain enter a death spiral as soon as they go online, then Cex will not. will support and vice versa.
Wayne: We all know that Layer 2 appeared to solve the performance problem of Layer 1 of Ethereum. Then, when Ethereum was upgraded to version 2.0, the performance has been improved. Does Layer 2 still exist? Including the recent hot high-performance new public chains, will it be untenable?
Mindao: I personally think that the POS transfer mechanism will not have a great impact on the expansion technology route of Ethereum. Even if sharding may take another three years, it remains to be seen how technically reliable sharding is. This was mentioned in the white paper, but it has not yet been implemented.
Moreover, the expansion idea of ​​Ethereum is different from that of POS chains such as Solana. The latter hopes to solve everything on one layer, but the first layer of Ethereum (Layer 1) includes data layer, consensus layer and incentive layer. , the second layer (Layer 2) has the contract layer and the application layer. The main role of Layer 1 is to ensure network security, decentralization and final state confirmation, achieve state consensus, and serve as a trusted “” “Encryption Court”, conducts arbitration through rules designed by smart contracts, and transfers trust to Layer2 in the form of economic incentives; and Layer2 pursues more efficient performance as its ultimate goal. Of course, sharding may be possible in the future, but will this solution definitely solve all problems? Not necessarily, new problems will be encountered during the implementation process, so there is still room for competition in terms of expansion ideas.
Wayne: What is the truth behind the controversy behind POS and POW?
Rory Hu: The root cause is a conflict of interest. In essence, POW and POS are two different degrees of decentralization, behind which they represent different interest groups.
Mindao: An interesting phenomenon. Ethereum used to have a large number of miners, but developers didn’t care about the opinions of miners, and miners didn’t have much affection for Ethereum itself. The relationship between the two sides is forcibly pulled together, and they are very uncomfortable. Miners have received most of the dividends on the development road of Ethereum, but ecological development has nothing to do with miners. DeFi and NFT are not done by miners, and the POS mechanism will bind all parties together through interests, no matter if you are a developer The owner or the project party, as long as you are a coin holder, you are bound to ecological development.
Wayne: As a result, will developers not have the freedom they used to be?
Mindao: Yes, many people think that POW introduces a group that has no interest in the ecology, which will play a check and balance role on the development team, but in fact, the game power of Ethereum is multi-party and complex. For example, this fork, the biggest The checks and balances are not miners, nor the foundation, but the USDT and USDC asset issuers. With so many checks and balances, do you still need miners who have no direct interest in ecological development? It may not be necessary. This is also the biggest difference between Ethereum and Bitcoin. The ecology on Ethereum is rich, but there is no application and ecology on Bitcoin. In the end, the game of interests must be concentrated on each large group, but the game of Ethereum is multi-party. By no means can one side have a decisive influence.
Wayne: Would forking be a good option for miners?
Zakk: The choice is determined by interests. Miners are very shrewd. They will calculate the income and will follow the money in the end, but since the community has not stopped POW, the miners have found enough interests to leverage them. In the short term, fork Indeed a good choice.
Rory Hu: It is not very suitable for miners to switch to ETC, so their current graphics cards can only be forked so that their current graphics cards will not return to zero, but in fact, it should be noted that each fork will have a certain conspiracy in the short term, and the assets on the chain will be changed from the original ones. One has become the current two, and many successive assets will face all kinds of strange problems, including the emergence of speculative phenomena. But in the long run, it’s hard to say. There are some forks that I think are relatively successful, such as BCH, BSV, etc.
Mindao: I think it’s a social consensus issue, and it can’t be said to be a good or bad choice. After the fork, the forked coins actually have market value and no value. It is difficult to get out of your own way, especially top technical talents are needed to support them.
Zhang Li: I think that forking is a natural human right, and there is no right or wrong, but for some existing forking teams, it seems that there is no long-term road plan, and the prospects are not very clear.
Wayne: We entered the merger phase on September 6. What other threats and risks do you think have not been addressed?
Zakk: If the blockchain is regarded as the world computer, the current POW is its database. Fork is nothing more than copying the database, and the user’s on-chain assets will also be copied simultaneously, but the price depends on the price. The market’s recognition of the forked chain.
We’ve seen a lot of protocols that openly say they don’t support forks. That means that the assets forked by these protocols will be quickly sold, especially robots or scientists. They will exchange LP Tokens back to ETH as much as possible. After all, the mainnet coins can be finally realized.
There are also some DeFi protocols that have not clearly issued an announcement. If these protocols support the fork and the subsequent miners maintain their ecology well, it may retain users and enter a positive cycle. Moreover, the ETHW official also issued a statement saying that there will be a lock-up proposal to the DeFi protocols that support the fork, so as to prevent these protocols from entering a death spiral at the moment of the fork. If the proposal is finally passed, I believe this is a more responsible approach to user assets.
Of course, if you are just an ordinary user who wants to participate in free gift, you can choose to deposit the ETH in your hand to the Ethereum mainnet wallet in advance. Of course, the most convenient way is to directly deposit it into the trading platform that supports the Ethereum fork chain; If you are a scientist or a senior player, there are many complex arbitrage strategies on the market that you can refer to, but you must pay attention to the risks. If ETHW’s lock-up proposal does not take effect, the asset price on its chain can easily enter a death spiral.
Wallets are nothing more than a display of databases, but now many wallets do not publicly support ETHW. If you are a small fox wallet, you can find a miner node, and you can see the assets with Rpc. Senior players are familiar with this, but they are not very friendly to ordinary players. At that time, everyone can use the Ouyi Web3 wallet, and the assets will be displayed directly. We will help you manage it.
Mindao: I have a few suggestions and advice:
Before the fork, it is best to mention the coins on the cross-chain, side-chain and second-layer network to the main network;
If you are a stable currency LP, I do not recommend doing too many arbitrage operations, because you are not sure what the price of the forked asset will be, which will increase the risk;
If you plan to borrow ETH through Aave and Compound to obtain airdrops, but because many people do this, the interest is now very high, and it is not recommended;
During the merger and fork period, it is best not to do any operations between the two chains. No one is sure whether the forked chain will be stored for protection. Happening;
Wayne: There has always been public opinion that Ethereum 2.0 will be the starting point for the market value of Ethereum to surpass the market value of Bitcoin. What do you think?
Tension: This issue has risen to an ideological level. Although I think Ethereum and Bitcoin are now completely following two routes, it is entirely possible to surpass them. After all, Ethereum will be issued indefinitely, with a good ecology and a good mass base. .
Rory Hu: I think it is unlikely to surpass. The payment scene of Bitcoin has not changed much, and the scene of Ethereum has not changed much. The application scenarios have not changed much, and both have their own fields.
Mindao: My point of view is very clear. It should be exceeded in the last cycle. This can be proved from mathematics. The market value depends on the flow of people. For example, Bitcoin is more like the ancient and single city of Xi’an, while Ethereum More like Beijing and Shanghai, it is a political, cultural, economic and financial center that attracts many people at any time.
Zakk: I take a similar view, nothing can be good all the time, we can clearly see the potential and advantages of Ethereum.