If the ETH Merge does result in a fork, the way to ensure you qualify for any additional tradable assets is to hold ETH. Ideally you’ll want to hold it as spot on the ETH main-net. However, it is likely that you will qualify all the same holding it on other networks and on many centralized exchanges.
TLDR: Most people don’t have to do anything for the ETH Merge. The Merge may or may not result in a fork the produces additional tradable assets. If there is a fork, you’ll keep your ETH. In other words, if you have 1 ETH before the fork, you’ll have one ETH after. You may also be able to claim other tradable assets, like was the case for the fork that produced ETC and the fork that produced BCH.
Here is what you need to know going into the Merge in terms of potential forks:
- The Ethereum Network is going through a major update between Sept 10 – Sept 20 called “the Merge.”
- The Merge is a major part of ETH 2.0, a series of updates that improves the Ethereum Network and moves it from Proof-of-Work mining to Proof-of-Stake.
- The Merge specifically is estimated to reduce Ethereum’s energy consumption by ~99.95% and set the stage for future scaling upgrades such as sharding.
- According to the official Ethereum Foundation website, the Merge is expected to occur within Q3/Q4 2022. There is a soft deadline of Sept 19th (although this can change), and the Merge is more specifically estimated to occur Sept 15 2022.
- For your ETH to be upgraded, you can pretty much hold it anywhere (although if you run your own Consensus Software, you have to upgrade your software to be compatible as part of the update).
- With that said, to ensure you qualify for any forks that may occur that would result in another asset (like the Bitcoin fork that produced Bitcoin Cash), you need to have your ETH somewhere that allows you to claim any forked coin produced.
- If you hold ETH on the Ethereum main-net, for example in a MetaMask wallet on the ETH network. You will automatically qualify. Doing this will allow you to use your public and private key to claim any fork (although you should move other funds first as a best practice before interacting with any contract that would allow to claim a fork as a safeguard). All this should also be true for L2s and for wrapped ETH on other chains, although there is less certainty here.
- If you hold ETH on major centralized exchanges, you would also likely qualify for any major fork. However, there is less certainty here as well. If we look at past forks like the fork that produced ETC and the Fork that produced BCH, we can see that some centralized exchanges credited these right away and others credited them far down the line. In cases of other forks, some exchanges have not credited forks at all.
- One thing to keep in mind is that if someone(s) forks ETH, they may pick a block number other than the block(s) at which the Merge occurred as the block at which you qualify for the fork. They could also have other qualifications. like having traded on a specific L2. There are no specific rules for what developers will require. So keep in mind trading into ETH and then out quickly before and after the Merge might not be enough on its own.
- Lastly, it is important to note that the Merge may not result in any other tradable assets and instead you’ll just end up with upgraded ETH. If this is the case it mostly doesn’t matter where you hold ETH or what form it is in. You’ll have ETH and continue to be able to trade it after the fork.
That is the gist of what to expect based on my experience in crypto since 2015. Make sure to take a deep breath, confirm any information above, and take the steps that you think are best for you.
TIP: Be careful sending and trading ETH right around the time of the Merge. If something goes wrong, you don’t want to be stuck in a transaction on the block that the Merge occurs. Many centralized exchanges will shut down trading during this time, but main-net will continue to operate, so use best practices.
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