While Ethereum’s long-anticipated Merge seems to have hardly dented its price at the time of the upgrade, one of its speculative offshoots experienced a storm of volatility.
Ethereum PoW (ETHW) – an Ethereum hard fork backed by a group of Ethereum miners – soared in value during the upgrade. However, it tanked to all-time lows just hours later.
According to live price data from CoinGecko, ETHW rallied from roughly $30 at 21:30 UST on Wednesday to $51.88 just an hour later.
The price slowly trickled back down over the early morning hours, during which Ethereum’s Merge became official. As of now, the second largest cryptocurrency by market cap uses a proof of stake consensus mechanism, eliminating all energy-intensive mining from the network.
ETHW experienced an aggressive dump at roughly 4:30 on Thursday, plunging from $40 to $25 over the next hour. It’s only continued to slide after that, trading for just $19.46 at the time of writing – an all-time low.
As of now, ETHW value is not based on the trading of an actual cryptocurrency. Rather, its gleaned from trading data on a few select exchanges (including Gate.io, Poloniex, MEXC, FTX, Bybit, and others) in the form of an IOU of a token that is yet to launch.
ETHW seeks to retain the proof of work consensus mechanism that the Merge left behind, and to continue to give miners a home. As a fork of the former Ethereum chain, ETHW will effectively airdrop duplicate tokens to anyone who held Ethereum prior to the merge.
Granted, the value of these new tokens depends on how the market perceives the legitimacy of the new chain. Given how many major Ethereum businesses and infrastructure providers have voiced support for the canonical POS chain, experts believe it could struggle to find success.
For example, Tether and CIrcle – the two largest stablecoin providers – have confirmed that they will only support token redemptions on the POS chain. That means ETHW-based USDC and USDT tokens will lose their peg to the dollar, which will likely hurt trade and transaction volume on the chain.
ETHW is set to launch roughly 24 hours after Ethereum’s Merge. The unofficial Twitter account representing ETHW has published various data resources for those looking to use the network, including an RPC URL and a block explorer.
So far, it seems the ETHPoW hash rate is being beaten out by Ethereum Classic (ETHC), which absorbed a substantial number of Ethereum miners after the merge. Vitalik Buterin has personally recommended ETHC as a “fine” proof of work alternative to Ethereum.