After the upgrade, Grayscale, the world’s largest digital asset manager, plans to review and decide whether to sell PoW system tokens. But in a new report, the company notes that it is continuing its review.
In September 2022, the Ethereum blockchain network will move from the old Proof-of-Work system to the current Proof-of-Stake consensus mechanism. The move is necessary because the PoS consensus protocol is not energy-intensive but more secure and useful for using new scaling solutions.
Grayscale Beyond ETHPoW Review
According to Grayscale announcement, the review extension will last 180 days. This will give many companies time to decide on the method, timing, and possibility of selling ETHPoW – the asset after the Network Merge in September 2022.
The asset manager cited environmental concerns surrounding PoW, namely the high level of energy consumption to validate transactions, as a critical motivator for the review. In addition, the company is also concerned about the uncertainty in trading venues and custodians of crypto assets. It was noted in the announcement that a trading venue has not yet been established for the EthereumPoW token.
Based on the report, the price of ETHPoW may fluctuate if crypto asset custodians support the token or if there are important developments in the trading market.
Meanwhile, the Grayscale review is an important step in implementing PoS, because asset managers have a significant amount of Ethereum in the Grayscale Ethereum Trust. Perhaps through the ETHPoW review, other major institutions will also reconsider their stance on proof-of-work systems.
Ethereum Forks into Two Blockchains
The Ethereum network completed Merge in September 2022, a significant upgrade. After the Merger, the network now operates a PoS consensus algorithm, with a distinct difference from the former PoW.
However, some members of the community seem to prefer the PoW model mining system. This resulted in the network being split into two blockchains – EthereumPoW and the main Proof-of-Stake network.
While ETHW can benefit community members who prefer to mine through the system, it is also a challenge for digital asset companies that only provide Ethereum. This is especially true as some investors may want exposure to EthereumPoW.
Meanwhile, some companies have contributed to the challenge by designing to provide a new ETP (exchange-traded product) to facilitate investor exposure to EthereumW. However, due to sustainability uncertainty, the new ETP will act as a buffer for ETHW.
Meanwhile, the extension of the Grayscale review is considered a positive step for ETH and the cryptocurrency industry as a whole. As the network continues to develop PoS systems, the adoption of this consensus mechanism by important institutions such as Grayscale will increase.
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