- Poloniex and MEXC became the first spot exchanges to list such tokens last week
- The futures contract will open up doors for trading under the ETHPoWZ22 ticker
- Ethereum activated the Grey Glacier hard fork to diffuse the difficulty bomb
The Poloniex, MEXC and BitMEX cryptocurrency exchanges now back the trading of tokens representing a future Ethereum’s proof-of-work fork.
Poloniex and MEXC became the first spot exchanges to list such tokens last week while BitMEX joins the two exchanges by spearheading a futures product based on the tokens called ETHPoW.
Crypto exchanges and futures
ETHoW futures will support the exchange of ETHPoW as a derivative trading contract. The futures contract will rely on Tether USDT stablecoin. Tether acts as marginal collateral.
The futures contract will open its doors for trading under the ETHPoWZ22 ticker on Tuesday.
Earlier last week, Chinese crypto miner, Chandler Guo teased about a miner-led Ethereum fork. Guo, on Twitter, claimed that he would fork the Ethereum blockchain. He further insisted that the fork will allow miners to continue operations after Ethereum’s transition.
Ethereum plans to transition from a proof-of-work (PoW) to a Proof-of-stake (PoS) consensus. The transition will take place in the coming months.
Chandler’s efforts led to the idea of a miner-led Ethereum fork gaining momentum. Both Poloniex and MEXC allow ether holders to swap ETH into ETHPoS (IOU) and ETHPoW (IOU).
The swapping rate remains at a 1:1 ratio for both tokens.
Poloniex and MEXC
IOU tokens function in the same manner as derivatives. IOUs allows users to trade the native asset of a blockchain yet to be launched.
In both exchanges, the ETHPoS (IOU) token trades roughly the same as ETH. The ETHPoW (IOU) changes hands at a much lower price between $125-$130.
Poloniex and MEXC claimed that they will suspend and delist IOU tokens if conditions are not met. The exchanges insisted that the proof of stake upgrade must hence incorporate a fork.
The listing of IOU tokens seems highly speculative. However, listing allows the trading of an asset that may come into existence or not.
Other crypto exchanges now coalesce around the fork. Some of these crypto exchanges include Huobi, Digifinex, Gate and OKX. The four crypto exchanges offered their support to listing the forked versions of ether.
However, these exchanges remain silent on provision of details. The crypto exchanges are mandated to provide details on their plans related to listing of ether forks.
Last Saturday, Huobi claimed that it will list any Ethereum hard forks. The crypto exchange insisted that it would do so as long as Ethereum met certain requirements.
Ethereum’s Hard Fork
The Ethereum planned hard fork passed without incident on August 4th. The hard fork brought the blockchain’s transition to proof of stake one step closer.
Ethereum activated the Grey Glacier hard fork to diffuse the difficulty bomb. The hard fork pushed back the difficulty bomb that slowed down Ethereum’s block production. Grey Glacier improved its performance in the short term.
The difficulty bomb does not go off all at once. It gradually forces an exponential increase in proof of work difficulty setting. The setting motivates the transition from proof of work to proof of stake consensus.
Moreover, it deliberately increases the time it takes to make a new block of transactions. An increase in transaction time ultimately slows down the network. As a result, miners present no incentive to continue mining the proof of work chain.
Grey Glacier aimed at postponing the so-called difficulty problem by about three months.
Notably, a hard fork represents a software upgrade that splits a blockchain into two. All network participants coordinate around the new chain. A prior hard fork in December 2021, postponed the difficulty bomb until June 2022.
With the incorporation of IOU tokens in the Ethereum space, traders may predict a myriad of opportunities. As the Merge comes into play and more exchanges follow suit, the future seems bright for crypto.
