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August 4, 2022

Justin Sun’s Poloniex Plans for 2-Chain Ethereum

Poloniex said on August 4 that it will generate two unique coins to symbolize two distinct versions of the Ethereum chain that might arise after The Merge. This is the first exchange with this particular move.

The exchange will let users transfer ETH into ETHS and ETHW, two specialized tokens. ETHS represents the Ethereum chain using Proof-of-Stake, while ETHW represents the Ethereum chain using Proof-of-Work.

The exchange rate for ETHW/ETH and ETHS/ETH will be 1:1. In the future, the exchange will explore introducing other trading pairs. ETHS and ETHW will exist solely on Poloniex and will not be able to be deposited or withdrawn to other wallets.

Prior to The Merge, Poloniex will collect the balances of all accounts holding ETHS. If a chain split happens after this Ethereum update, the exchange will convert ETHS to ETH using PoS at a 1:1 ratio for all customers.

Poloniex will choose the Ethereum chain with the greatest Proof-of-Work hashrate as the primary blockchain to be converted to ETHW. Evidently, the exchange has also planned for the possibility that many Ethereum chains using PoW would emerge.

In contrast, if The Merge occurs without incident and no unit breaks the Ethereum chain to preserve Proof-of-Work, ETH will continue to be exchanged normally on the exchange, however, two ETHS and ETHW coins would be canceled.

Poloniex was formerly one of the top cryptocurrency exchanges. From 2017 to 2020, however, the standing of the exchange declined substantially as a result of the management team’s many errors. In 2019, TRON creator Justin Sun acquired it and included it in the TRON ecosystem.

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Justin Sun claims to have more than 1 million ETH, and if a hard fork happens between two chains, TRON will transfer a set quantity of ETHW to the new project to assist in the development of its ecosystem.