Free Ethereum Airdrop? What Happens After the Ethereum Merger

The Ethereum merger is one of the most anticipated and exciting events in blockchain history. When it arrives, the Ethereum blockchain will switch from being run through a proof-of-work to a proof-of-stake mechanism. While the vast majority of people view this change as a positive, some critics have denounced it and are planning to create their own version of Ethereum where anyone holding ETH will receive their new tokens. Let’s look at what this means, whether the new tokens are valuable, and how to qualify for airdrops.

The Ethereum merger has been described as trying to change the engines of a passenger plane while it is in the air. After the merger, anyone can stake their Ethereum as collateral, validate transactions, and receive a portion of the transaction fees. This will pave the way for mass adoption of Ethereum as it will reduce energy consumption by 99.97% and make it a potential investment for ESG-conscious companies. In addition, it could also make Ethereum deflationary and significantly increase the decentralization of the blockchain.

Even with these positive changes, some skeptics have expressed concerns about potential issues with proof of stake. For example, through the recent sanctions on Tornado Cash, it has been proven that governments control DeFi to a certain extent, and the infrastructure around Web3, such as websites, code bases, stablecoins, and communication channels, is still subject to government scrutiny. With the shift to proof of stake, some believe that governments may crack down on custodial services that help users stake, such as Coinbase or Lido, and force them to shut down or cripple the blockchain in some way.

While this seems like a legitimate concern, it is grossly overblown. Despite this, a minority of advocates for keeping proof-of-work Ethereum on Twitter and other platforms plan to hard fork the network to keep the proof-of-work chain running. This means that at the moment of the merge, two separate chains will exist: the proof-of-work chain and the new proof-of-stake chain. Users who hold funds in Ethereum addresses at the time of the merge will receive duplicate assets on both chains, which includes not only ETH, but any token, stablecoin, or NFT.

Unfortunately, this doesn’t mean everyone will double their money. Each asset will trade separately depending on the chain it’s on. For example, two versions of ETH are listed on Poloniex. Currently, proof-of-work ETH, or ETHW, is trading at around $70, while proof-of-stake ETH, or ETHS, is trading at $1,921. Interestingly, the combined value of both versions is the same as Ethereum’s current price.

While buying proof-of-work ETH may seem like a good investment, it will likely fail post-merger for several reasons. First, there is already an existing Ethereum chain that will use proof-of-work indefinitely: Ethereum Classic (ETC). ETC was created after the Ethereum hack in 2016, and there was disagreement over whether to compensate users. Ethereum as we know it today is the result of this compensation, while the original chain exists as Ethereum Classic and is a mature smart contract platform. Second, almost all major stablecoin issuers and DeFi protocols have chosen to support the merged Ethereum. This means that stablecoins like USDC will not have any support on the proof-of-work chain, and therefore have zero value. This will have a chain domino effect throughout the ecosystem, as the worthless stablecoin will ruin all decentralized exchanges, lending protocols, and decentralized stablecoins like DAI. The proof-of-work chain will be in a catastrophic state once it is launched, and there is no obvious solution to keep DeFi protocols working as intended.

Ultimately, the new Ethereum chain appears to be a cash grab for influencers who spread fear on social media. Most Ethereum holders will be unaffected by this chain and will probably make a few hundred dollars from the airdrop before abandoning Ethereum Proof of Work entirely. Merged Ethereum is the future and will usher in a new era.