The two newly introduced chain split tokens that will allow users to trade on the fork event are ETHW and ETHS. These tokens will give users access to their original investment, as well as any potential profits that can be made from trading on the newly forked blockchain. The company responsible for Bitfinex Derivatives, iFinex, announced a new service that will be available to users before the Ethereum Merge.
The exchange now offers Ethereum CSTs (Chain Split Tokens). These tokens are each minted as an ERC20 token representing one share on either side of forks from chains such as Bitcoin Cash or Ethereum Classic. The tokens available for users represent the two systems involved in the Merge: ETHW, which is proof-of-work, and ETHS, which is proof-of-stake. Bitfinex made the new trading tokens available so that users could trade on the potential fork.
Paolo Arduino, Bitfinex’s chief technology officer expressed that they released these new tokens to better prepare users for all Merge-related possibilities. However, the tokens are set to expire at the end of this year. The exchange went on to say that there are three foreseeable outcomes for which these tokens can help users prepare.
If the consensus on the proof-of-work chain does not change, ETHS will expire and ETH will be airdropped to all ETHW holders. However, if the consensus change is successful with no fork, the opposite will happen: ETHW will expire and ETHS tokens will exchange. If both a successful consensus change AND a successful fork occur, both ETH holders and those who possess ETHS tokens count as winners–they’ll each be credited with an equal amount.
The impending Merge has gotten everyone in the industry anxious. Users are wondering if the event will take place as developers have promised and whether there will be any negative consequences. The Merge has been postponed numerous times in the past. Users on the network were encouraged to commit to PoS ahead of time via protocols like Aave, although there has been resistance from the PoW movement.
Miners have to make a decision about how they want to handle the Merge. Some mining pools that are large have already moved towards staking, but other PoW miners are going to freeze contracts in order to keep PoW running even though there are people who doubt it.