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- In his statement, Ong advised that ETH holders should first move their funds from centralized exchange and non-custodial wallets to a hardware wallet to get absolute control.
- Also, Ong believes that there could be decentralized exchanges (DEX) on the ETH PoW chain which could assist in unwrapping WETH PoW tokens.
One of the biggest upgrades in blockchain history is expected to happen this month. The Ethereum merge is very popular among crypto enthusiasts who await for the network to be massively transformed as it transitions to the Proof of Stake algorithm. According to the co-founder of CoinGecko, Bobby Ong, there is a way to take advantage of this upgrade. Firstly, it is important to note that all ETH token holders would get the chance for an Ethereum PoW token airdrop.
Before we get to the steps, what is happening again? Ethereum is going through an upgrade where it will transition from Proof of Work to Proof of Stake. After the transition, ETH miners can no longer mine. Miners are forking ETH to keep a PoW version so they can continue mining.
In his statement, Ongs advised that ETH holders should first move their funds from centralized exchange and non-custodial wallets to a hardware wallet to get absolute control. This will give them a free PoW token after the fork.
1. To get the ETH PoW tokens, you must first hold ETH on a wallet that supports this fork.
The best would be to have full custody of your ETH on a hardware wallet. If you are holding ETH on an exchange, your exchange may or may not give you the fork tokens.
— Bobby Ong (@bobbyong) September 5, 2022
Avoid keeping Ethereum on Layer 2
Ongs further discloses that ETH holders should keep their assets away from layer 2 to take advantage of the merge. The reason is that keeping ETH on Ethereum alternatives like Optimism and Arbitrum would not guarantee holders getting the PoW tokens. Before the Merge, it is important to keep assets on exchanges that support the PoW tokens, then after the upgrade, holders can move them to wherever they prefer.
For exchanges that support the fork, this is probably the easier option as you get the fork tokens without doing work. Ideally, the exchange supports the trading too. Some exchanges may take months before crediting your account. Do check your exchange policy on the upcoming Merge.
Also, Ong believes that there could be decentralized exchanges (DEX) on the ETH PoW chain which could assist in unwrapping WETH PoW tokens. However, doing that in an unstable ecosystem would be complicated. For this reason, it is better to unwrap them before the Merge.
He also advised that people withdraw and provide liquidity after the Merge as ETH being used to provide liquidity would not receive PoW tokens.
In addition, he advises that people borrow ETH from Aave and other lending platforms before the snapshots to get more of the PoW tokens.
Monitor stETH / ETH market. You could either buy or sell stETH as we get closer to the Merge depending on what others are doing. Would expect some to sell stETH to ETH to get the PoW airdrop. But if selling becomes too strong, you could buy stETH on the cheap.
