Ethereum Merge– The CrossFi Outlook
All eyes are on The Merge. When Ethereum’s mainnet integrates with the Beacon chain, a Proof of Stake (PoS) network, everything will change. The Proof of Work (PoW) era will draw to a close and a new period will emerge for the most important blockchain network in DeFi!
Ethereum’s next-generation Layer 2 networks are pumping, with their total value locked (TVL) hitting $7B several days after posting a record high of $7.4B on April 2.
Since the news of the Ethereum Merge slated for September, several DeFi protocols and platforms have shown support for the Merge. However, others have noted that their services would cease to operate on the network following the Merge.
Crossfi will also follow the merge!
Meanwhile, a recent report by DappRadar noted that Ethereum’s move to the PoS consensus mechanism could affect stablecoins and DeFi protocols operating on the blockchain. Moreover, the stablecoin market has expanded over the years.
Another question remains unanswered, as we move deeper into what some experts call the “make or break year” for the world’s second-largest blockchain network, Ethereum. Could the migration trigger a decentralized finance (DeFi) year for 2022?
Ethereum could be on the verge of realizing its vision for a more scalable, secure, and sustainable network. The completion of what Ethereum calls “The Merge” and the advent of its new consensus mechanism represents a major milestone in its multi-year journey to bring Ethereum 2.0 online.
Focusing on ETH’s price jumps in the short term may grab headlines, but the real takeaway is The Merge’s long-term effect on the broader DeFi ecosystem. It will consolidate the DeFi giant’s position as a desired network for developing layer 2 Blockchains.
This will create a bullish market for other altcoins since they are correlated to Ethereum like Crossfi!
Ethereum merge could affect stablecoin stability and probably smart contracts?
It seems to be more of a problem with decentralized stablecoins than with smart contracts and DeFi projects (which don’t use stablecoins):
On Twitter, MakerDAO (Stablecoin) highlighted some problems such as replay attacks, network downtimes, backwardation of contracts, negative funding, etc. In addition, the DeFi platform also highlighted some ways to solve the issues.
Another platform that expressed concern about The Merge is the investment giant, Grayscale. The company said The Merge could affect ERC-20 tokens if hard forks should happen.
As per the report, most stablecoin projects depend on public blockchains such as Ethereum. This makes the Ethereum network very important to its operations.
Hence, DappRadar noted that The Merge could affect stablecoin stability since the network hosts most DeFi projects. Meanwhile, reports state that Ethereum would move from the PoW to PoS consensus mechanism on September 15th.
Major issuers of stablecoins, such as Circle (USDC) and Tether (USDT), have shown great support for The Merge. However, some members of the community are not entirely in support of the transition.
Additionally, Grayscale argued that The Merge could make tokens in smart contracts remain locked forever. This could force holders to liquidate their tokens before the migration.
Meanwhile, developers in the Ethereum ecosystem noted that they have considered these issues and made solutions for them. They pointed out that the upcoming Merge would occur on the base layer.
Hence, it would not affect smart contracts and other network protocols. However, other protocols in the DeFi sector are not bothered by such issues. For instance, Uniswap has revealed that the POS transition would not interrupt its services.
However, it is not certain if these issues will arise post Merge.
CrossFi is very close to the action and informs the community about updates and possible changes. CrossFi reserves the right to freeze the ecosystem if necessary and to make certain updates so that all community members are safely accompanied through the merge!
We are looking forward to the historically important merge in the blockchain space and are bullish on CrossFi in the close future.
We will also be launching the DEX soon, with final testing underway. We expect to launch DEX immediately after the ETH merge to ensure the highest level of security.
Best, our CrossFi-Team
CrossFi is a cross-chain protocol that provides liquidity for Filecoin staking and rewards.
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