Retail Investor Operation Guide: How to Ensure You Get the Most Airdrops Before the Ethereum Merger

Co-founder and COO Original translation: wzp&FYJ, BlockBeats

This article is based on the views of Bobby Ong, CoinGecko co-founder and COO, on his personal social media platform. BlockBeats has compiled and translated them as follows:

Ethereum is scheduled to merge on September 13, and soon ETH holders will receive airdropped ETH PoW Tokens. What should holders do? You can consider the following 7 steps to fully enjoy the bonus of the merger event:

Let's first explain what is happening? Ethereum is undergoing an upgrade and it will transition from PoW to PoS. After the transition, ETH miners will no longer be able to mine. Miners are forking ETH to keep the PoW chain so that they can continue mining.

1. To receive the ETH PoW Token airdrop, you need to hold ETH in a wallet that supports Ethereum forks.

It is best to keep ETH in a hardware wallet. If you hold ETH through an exchange, there is a possibility that the exchange will not give you forked tokens. You need to choose an exchange that supports forks and easily obtain forked tokens. Ideally, the exchange also supports trading. Some exchanges may take several months to transfer tokens to your account. The merger is coming soon, please check the announcement of the exchange you are using.

2. Send all tokens to the ETH mainnet

Users holding ETH in Optimism, Arbitrum, Polygon, Avalanche or any other L2 will not be able to receive ETH PoW airdrops. They need to be sent to the mainnet before merging to obtain ETH PoW Tokens.

3. Convert all WETH to ETH

Maybe there will be a DEX on the new ETH PoW chain that supports converting WETH PoW Tokens, but why rely on a newly created and unstable ecosystem? Just convert WETH to ETH before the merger and get ETH PoW Tokens immediately.

4. Extracting liquidity provided for DeFi

Users cannot get ETH PoW Tokens for ETH that provides liquidity to any protocol. I will withdraw liquidity now and provide it again after the merger. And as more and more people do this, DeFi protocols may experience a liquidity crunch.

5. Borrow ETH from Aave/Compound

Users can get ETH PoW airdrops for any ETH they hold during the snapshot, which means they can borrow as much ETH as possible. Combined with the possible liquidity crunch in DeFi protocols in step 4, I expect ETH utilization to be close to 100%. Aave and Compound current snapshots:

6. Monitor the stETH/ETH market

As the merger approaches, you can try to buy or sell stETH, which is a prediction of the behavior of others in the market. It is expected that some people will sell stETH for ETH to get PoW airdrops. Therefore, once the selling force is large, you can smoothly buy stETH at a low price. The price curve of stETH in the past 30 days:

7. Buy expectations, sell facts

Maybe speculating on ETH PoW is not worth it for you. Currently, the market price of ETH PoW IOU is about 2.8% of ETH. I think ETH may see buying in the hours after the merger and be sold immediately afterwards. You can choose to ambush in advance and take profits before others.

We have about 10 days to merge, and many markets and protocols will become unstable, chaotic, and complicated, especially in the hours before/after the merge. One or more ETH PoW forks may occur. I looked at an old crypto report on Bitcoin forks from 2017, and history confirms this.

Will we see another dozen ETH PoW forks emerge? Who knows! But I know that for the most part, I will only be eligible for all of these fork tokens if I hold ETH in my non-custodial wallet. This does not mean I will claim all airdrops, as some may be scams trying to obtain my signature/keys.

My strategy for these forked tokens is to sell them all at once: almost all forked tokens eventually die, because they are created only to keep miners busy temporarily, and there is no incentive to develop their community and ecosystem. There are many strategies you can take for the upcoming merger. I am sure I will miss some other interesting strategies.

Of course, it goes without saying that nothing I say above is financial advice, do your own research!