On the eve of the merger of Ethereum (the evening of September 5th), Ouyi OKX & TokenInsight jointly launched the "Talk about Ethereum merger and fork, how can ordinary investors participate?" 》Theme AMA, TokenInsight CEO Wayne, OKX Web3 Wallet developer Zakk, AntPool developer Rory Hu, Lishuo founder Zhang Li, dForce founder Mindao and other guests discussed the merger and fork of Ethereum, and gave Judgments and views on the event itself and the development trend of the industry, as well as suggestions for ordinary investors, I hope to inspire you! Enjoy～

Wayne: Mr. Mindao, can you explain the background of the merger of Ethereum to the audience?

Mindao: Well, in fact, this merger is basically within expectations. During the Ethereum ICO, the white paper has already written that it will shift from POW to POS in the future. It was expected to be realized in 2018-2019, but it may be due to the lack of perfect research on POS. , it was delayed until now. Of course, Ethereum is not the first to do POS. Public chains such as Eos in the last bull market and Solana in the last bull market all use the POS mechanism.

Now that it is finally about to merge, the Ethereum community, participants and developers of smart contracts are actually looking forward to it, which is very friendly to them. On the one hand, the inflation of Ethereum will be reduced by about 90%, and the GAS will also be reduced. Of course, the income of miners will also be cancelled; on the other hand, it will be more energy-efficient than before.

Wayne: Let me ask Rory Hu here, AntPool should be the first to clearly express its attitude. How do you view the merger from the perspective of the mining pool?

Rory Hu: Our attitude is very clear, which is to continue to support the POW ecology. Obtaining income through mining with mining machines is like opening a bridge between the physical world and the digital world. And the security of POW is very high, the degree of decentralization is also very high, POS is relatively more centralized, and the logic of POS in the future will be more and more similar to DPOS, the degree of centralization will become higher and higher, and the resistance to censorship will also increase. If it is weakened, the regulatory problem will become more and more serious.

Mindao: Personally, I am not worried about this issue at all. Anti-censorship cannot be achieved simply by relying on consensus algorithms, degree of decentralization, and anonymity. The most effective anti-censorship depends on how many stakeholders can be bound. Through asset accumulation, prosperous ecology and application construction, the external system is highly dependent on the network, and finally forces them to accept the established facts of technology neutrality and anti-censorship, so that the anti-censorship Review has evolved into a part of social consensus at the legislative and judicial levels.

Wayne: What impact will the merger of Ethereum have on the encryption circle? Will the existing public chain structure be broken? Zakk can chat first.

Zakk: My personal opinion is definitely beneficial, which means that Ethereum 2.0 is one step closer, and it is closer to solving industry-level problems. But for OKX, whether it is DeFi business or CeFi business, it is a one-stop service platform for users. The focus is on users rather than which chain. In theory, as long as users have needs, we will try our best to meet them. Including the ETH fork chain, miners have needs, the community has needs, and users have needs, then our Web3 wallet will naturally support it, which is for DeFi. For Cex, there are more criteria to be evaluated. To evaluate whether the chain has real value, it is hoped that we may have to wait until after the fork to observe. If the assets of the forked chain enter the death spiral as soon as it goes online, then Cex will not will support and vice versa.

Wayne: We all know that Layer 2 was created to solve the performance problems of Ethereum Layer 1. Then Ethereum has been upgraded to version 2.0, and the performance has improved. Does Layer 2 still exist? Including the recent hot new high-performance public chains, will they be untenable?

Mindao: I personally think that switching to the POS mechanism will not have a great impact on the expansion technology route of Ethereum. Even sharding may have to be looked at in three years. To be honest, how reliable sharding is technically remains to be studied. This matter was mentioned in the white paper stage, but it has not yet been implemented.

Moreover, the expansion idea of ​​Ethereum is different from POS chains such as Solana. The latter hopes to solve everything on one layer, but the first layer (Layer 1) of Ethereum includes data layer, consensus layer and incentive layer. , Layer 2 (Layer 2) has a contract layer and an application layer. The main role of Layer 1 is to ensure network security, decentralization and final state confirmation, to achieve state consensus, and to serve as a credible " Encrypted Court", arbitration is conducted through rules designed by smart contracts, and trust is transferred to Layer 2 in the form of economic incentives; while Layer 2 pursues more efficient performance as the ultimate goal. Of course, fragmentation may be possible in the future, but will this solution solve all problems? Not necessarily, new problems will definitely be encountered during the implementation process, so there is still room for competition in terms of expansion ideas.

Wayne: What is the truth behind the controversy behind POS and POW?

Rory Hu: The fundamental reason is the conflict of interests. In essence, POW and POS are two different degrees of decentralization, and behind them represent different interest groups.

Mindao: It’s an interesting phenomenon. Ethereum used to have a large number of miners, but the developers didn’t care about the opinions of the miners, and the miners didn’t have any feelings for Ethereum itself. The relationship between the two parties was forcibly pulled together, and they were very unhappy. Miners have enjoyed most of the dividends on the development path of Ethereum, but ecological development has nothing to do with miners directly. DeFi and NFT are not created by miners, and the POS mechanism will bind all parties together through interests. Whether you are a developer The holder is still the project party, as long as you are a currency holder, you are bound to the ecological development.

Wayne: In this way, will developers lose their freedom?

Mindao: Yes, many people think that POW introduces a group that has no interest in the ecology, which will act as a check and balance to the development team, but in fact the game power of Ethereum is multi-faceted and complicated. The checks and balances are not miners, nor foundations, but USDT and USDC asset issuers. With so many checks and balances, is there still a need for groups of miners who have no direct interest in ecological development? It may not be necessary. This is also the biggest difference between Ethereum and Bitcoin. The ecology on Ethereum is rich, but there are no applications and ecology on Bitcoin. In the end, the game of interests must be concentrated on various large groups, but the game on Ethereum is multi-party. It is by no means one-handed that can play a decisive role.

Wayne: Will forking be a good choice for miners?

Zakk: The choice is determined by interests. Miners are very shrewd, they will calculate the benefits, and they will follow the money in the end. But since the community has not stopped POW, the miners have found enough interests to leverage them. In the short term, fork It is indeed a good choice.

Rory Hu: It is not very suitable for miners to switch to ETC, so they can only prevent their current graphics cards from being reset to zero through forks. One has become the current two, and many assets in succession will face various strange problems, including the emergence of speculation. But in the long run, it’s hard to say. I think some forks are relatively successful, such as BCH and BSV.

Mindao: I think this is a matter of social consensus, and it cannot be said to be a good or bad choice. After the fork, the forked currency actually has a market value but no value. It is difficult to get out of your own way, especially the support of top technical talents.

Tension: I think forking is a natural human right, there is no right or wrong, but for some existing forked teams, it seems that there is no long-term route planning, and the prospects are not very clear.

Wayne: We entered the merger stage on September 6th. What do you think are the threats and risks that have not been paid attention to?

Zakk: If the blockchain is regarded as a world computer, the current POW is a database of it. A fork is nothing more than a copy of the database, and a copy of the user’s assets on the chain will also be copied synchronously, but the price depends on the price. The degree of market recognition of the forked chain.

We have seen that many protocols have publicly stated that they do not support forks. That means that the assets forked from these protocols will be quickly sold off, especially robots or scientists, who will exchange LP Token back to ETH as much as possible, after all, the main network currency can be finally realized.

There are also some DeFi protocols that have not made a clear announcement. If these protocols support forks and subsequent miners maintain their ecology well, it may retain users and enter a positive cycle. Moreover, the ETHW official also issued a statement stating that there will be a lock-up proposal for DeFi protocols that support forks, so as to prevent these protocols from entering a death spiral at the moment of forks. If the proposal can finally pass, I believe this is a more responsible approach to user assets.

Of course, if you are just an ordinary user who wants to participate in the free gift, you can choose to deposit the ETH in your hand into the Ethereum main network wallet in advance. Of course, the most convenient way is to directly deposit it into an exchange that supports the Ethereum fork chain; If you are a scientist or a senior player, there are many complex arbitrage strategies on the market that you can refer to, but you must pay attention to the risks. If ETHW's lock-up proposal does not take effect, then the asset prices on its chain can easily enter a death spiral.

A wallet is nothing more than a display of a database, but now many wallets have not publicly expressed their support for ETHW. If you are a little fox wallet, you can find a miner node and match it with Rpc to see the assets. Senior players are familiar with this, but it is not very friendly to ordinary players. At that time, you can use the Ouyi Web3 wallet, and the assets will be displayed directly, and we will help you manage it.

Mindao: I have a few suggestions and advice:

1. Before the fork, it is best to mention the coins on the cross-chain, side-chain and the second-tier network to the main network;

2. If you are a stablecoin LP, I do not recommend doing too many arbitrage operations, because you are not sure what the price of the forked asset will be, which will increase the risk;

3. If you plan to borrow ETH through Aave and Compound to obtain airdrops, but because many people do this, the interest is already very high now, so it is not recommended;

4. During the merge and fork period, it is best not to do any operations between the two chains. No one is sure whether the fork chain will be protected. It is very likely that when the assets of the fork chain are sold, the assets of the main network will be sold at the same time Condition;

Wayne: There has always been public opinion that Ethereum 2.0 will be the starting point for the market value of Ethereum to surpass the market value of Bitcoin. What do you think?

Tension: This question has risen to an ideological level. Although I think Ethereum and Bitcoin are currently taking two routes, it is entirely possible to surpass them. After all, Ethereum will issue infinitely more, and its ecology is good, and its mass base is also good. .

Rory Hu: I think it is unlikely to go beyond. The payment scene of Bitcoin has not changed much, and the scene of Ethereum has not changed much. There is no change in the application scenarios, and both have their own fields.

Mindao: My point of view is very clear. It should have been exceeded in the last cycle. This can be proved mathematically. The market value depends on the flow of people. For example, Bitcoin is more like the ancient and single city of Xi’an, while Ethereum More like Beijing and Shanghai, it is a political, cultural, economic and financial center, and it attracts many people at any time.

Zakk: I hold a similar point of view, nothing can always be good, we can clearly see the potential and advantages of Ethereum.