Why Users Will Prefer ETC Over Ethereum PoW (ETHW)?

The Ethereum Platform is all set to start its Merge upgrade next month with the platform changing from Proof-of-Work to Proof-of-Stake. However, the miners are not ready to end the PoW working model and are getting ready to continue their work with a Proof-of-Work (PoW) version of the blockchain as Ethereum PoW (ETHW).

The biggest asset manager Grayscale believes that there is strong possibility that the Ethereum PoW (ETHW) version is going to fail. Comparing the hard fork of 2016 which created the Ethereum Classic, the Ethereum platform today is much more complex and gargantuan. Since the hardfork of 2016, Ethereum has grown into a healthy ecosystem with high number of users, decentralized finance (DeFi), smart contracts, decentralized applications (dApps), and much more.

Grayscale explained that a hard fork will create duplicates of thousand and millions of entities which did not exists during the 2016 Ethereum Classic Fork. It will create a huge challenge to developers and market participants.

The sheer gargantuan complexity of the DeFi and the number of assets backed tokens attached with the Ethereum Ecosystem will lead to a calamitous peril to the price of ETHW due to on-chain positions attempting to be liquidated.

In 2016 when the hard fork was done the DeFi ecosystem did not exist but today Ethereum blockchain is hosting more than 500 DeFi protocols and also has $40 billion locked as smart contracts within its ecosystem.

If the Ethereum PoW (ETHW) goes live the users of the protocol will attempt to off load their positions and try to get leverage against the earlier asset-backed tokens into ETHW tokens. On the other hand, ETH holders will try to divest themselves of the free ETHW tokens which they received against ETH/USD. Grayscale feels that this will precipitate inconsistent selling pressure on ETHW.

Minimal Support For Ethereum PoW (ETHW) Hard Fork

Major blockchain players like like Chainlink (LINK), stablecoin players like Tether (USDT) and Circle (USDC), did not give their nod for the Ethereum PoW (ETHW) hard fork. Vitalik Buterin, the creator of Ethereum has said that he and his team will not help in any technical challenges for ETHW after the successful completion of the Merge event.

Also, Grayscale said that ETHW will not constitute a major challenge for Ethereum Classic (ETC). Even if ETHW succeeds, ETC will continue to be normal since the users will be able to compare and realize that when there is a stable version of the Ethereum POW in the form of ETC why will they bother with ETHW with all its complexities and uncertainty