Three reasons why proof-of-work ETH1 will survive Ethereum Merge
- Crypto hedge fund Galois Capital believes Ethereum Merge could result in ETH1 and ETH2 and proof-of-work could survive the event.
- Analysts are exploring the possibility of two Ethereum chains post the merge, one proof-of-work and one proof-of-stake.
- Analysts believe there is a likelihood of Ethereum price drop to $300.
As the Ethereum Merge draws closer, analysts are evaluating the possibility of proof-of-work’s survival as ETH1, while proof-of-stake is launched as ETH2. Galois Capital believes refuting the possibility of ETH1 post the Merge would imply there is a parallel with the Terra-LUNA collapse.
Also read: Ethereum hits exchanges amidst rising negative sentiment ahead of the Merge
Analysts explore proof-of-work’s survival post Merge
Analysts at Galois Capital explored the outcome of Ethereum Merge. Merge is the transition of Ethereum from proof-of-work to proof-of-stake consensus mechanism, however analysts believe there is a possibility that both chains will co-exist. Meaning ETH1, proof-of-work will continue to exist in parallel to ETH2, proof-of-stake.
This event can be considered a fork, if ETH1 and ETH2 exist. At the same time, analysts argue that the belief that ETH1 will cease to exist post the transition is like comparing Ethereum with Terra, where LUNA2.0 was launched, without UST (one of the two sister tokens).
Galois Capital asked the crypto community on Twitter what they think about the outcome of the Merge. Whether miners will continue to mine ETH1, removing the difficulty bomb or they will switch to Ethereum Classic. The community was divided with 51.8% in favor of ETC and 48.2% in favor of ETH1 minus the difficulty bomb.
Question 1: What happens during the merge? If Choice 2 or 3 go to Questions 2-5.
— Galois Capital (@Galois_Capital) July 27, 2022
66.2% poll respondents believe exchanges will follow ETH2 for perpetual contracts and futures, the rest believe they will either follow ETH1 or a basket.
Analysts criticized Galois Capital’s approach to extrapolate from the LUNA situation to Ethereum. While Terra witnessed a massive collapse, analysts like Chainyoda.nyc believe the proof-of-stake fork would be a useful move and nothing can go very wrong.
Maybe a stretch for @Galois_Capital to extrapolate from $LUNA situation to #eth situation. Luna was an emperor with no clothes but in this case something would have to go very wrong with the PoS fork for the PoW fork to be useful. The PoW COIN of course can have a life of its own
— chainyoda.nyc☀️ (@chainyoda) July 30, 2022
Analysts evaluated likelihood of Ethereum price drop to $300
Analysts at FXStreet evaluated the Ethereum price trend and explored the possibility of ETH visiting $300. With a bearish outlook on Ethereum, analysts set price targets for ETH. For more information, check the video below:
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
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