Ethereum is about to implement a long-awaited “merger” that will significantly reduce the network’s environmental impact.
There may be forked versions of Ethereum, which could cause confusion and lead to scams as duplicate NFT assets enter the market.
We are days away from The long-awaited Ethereum mergerwhere the leading network of dabs And the NFTs It will turn into a more energy efficient system. It’s years in the making, but as the mid-September target approaches, many users are wondering what could go wrong – and whether anything would change with their assets.
This is especially true when it comes to NFTswith tens of millions of profile pictures, collectibles, and pieces of artwork in action right now Ethereum—Some of them ordered staggering sums in the middle Impulse rush of NFT market over the past two years. What happens to NFTs after merging?
The simple answer is: probably nothing. They will be on file Pocket wallet And it should work as usual in the markets and within dapps. But the overall picture is more complicated than that, mainly due to the expected emergence of Community Led Post-Merge Ethereum Forks. Duplicate NFTs will appear as a result, which can lead to confusion and deception.
What do you need to know about Ethereum NFTs entering the merger, and what could happen next? Decrypt Talk to Ethereum experts about what to expect as the multibillion dollar NFT market with some expected volatility looks ahead.
on the compact series
The merger will see Ethereum go mainstream proof of work The mining model – which requires sufficient decentralized power to process transactions – to a proof of stake The consensus system is expected to use over 99% less power, according to the Ethereum Foundation. This is a huge step forward for Ethereum and especially for NFTs, effectively eliminating one of the biggest criticisms leveled at NFTs.
As mentioned, the merger has been in the works for years, and the core Ethereum developers have painstakingly tested each process and worked through potential hurdles. While this does not guarantee that the transition will be smooth, developers and creators widely expect a very smooth process in the future.
“Ethereum is software and all software suffers from it downtime problemIn other words, it is impossible to say for sure whether there are any technical hurdles,” Eric Dieb, co-founder of Diversified smart start contractTell Decrypt. “However, I would not bet on the ETH developer community.”
However, if all goes according to plan, the Ethereum NFTs should do well to upgrade the fresh Ethereum. mainnet. It will still be held within your portfolio(s) and operate as normal in the markets, and you don’t have to do anything to prepare for the consolidation. This is all handled by the developer of things to ensure a smooth transition.
“Users should expect that their NFTs will reside securely on the new Ethereum.” [proof-of-stake] Chain along with their ETH tokens,” confirmed Johnna Powell, co-head of NFT at Ethereum-centric software firm ConsenSys.
While most of the Ethereum community appears to be willing with the merger and its potential benefits, there are notable detractors. Some Ethereum proponents don’t want the chain to shift away from Proof of Work Miningeither because of the security benefits of the energy-intensive process or the rewards for miners who run computer platforms.
As a result, some creators in the Ethereum community are planning to fork The blockchain and the creation of a sub-chain that continues to progress with the current Proof of Work system. The most prominent example so far is called ETHPOWled by the well-known Chinese miner Chandler Gu.
ETHPOW will not be the same as the main network built into Ethereum. It would be similar in some way to how Ethereum itself forked away from its original chain in 2016 to deal with the fallout. DAO اختراق hackAnd some users continued to support the original chain under the new name, Ethereum Classic. But a lot has changed since then, and there are a lot of assets – including NFTs.
As ETHPOW and any other forks emanating from the Ethereum mainnet will produce duplicates of Ethereum’s NFTs. NFT is simply a blockchain Code, and can act as a property document for digital items such as artwork and collectibles. Thus, the forked Ethereum chain will have duplicate verbs that refer to the same artwork or media.
What does this mean? If an NFT marketplace supports both the Ethereum-integrated mainnet and the respective Proof of Work fork, you will probably see both versions of the token listed. This is sure to cause confusion, and there may be scammers with the goal of selling duplicate copies of notable NFTs, such as bored monkeys And the whistles—For less experienced coding users.
“If the proof-of-work forks succeed and the markets support them, Powell said,[then] There is bound to be market confusion and arbitrage that we can’t really predict, which will play into the market.”
She added: “One can imagine more sophisticated NFT traders selling their high-value assets in the Proof of Work chain at bargain prices for a quick profit, while newer traders may not even spot the difference.”
What about replay attacks?
In the lead up to the merger, there was some chatter about a file Possibility of a “re-attack”—This means that a transaction on the Proof of Work fork can then be ‘replayed’ on the Proof of Ownership of the Ethereum mainnet.
Here’s a theoretical case: the owner of Bored Ape Yacht Club NFT may sell the duplicate on the Proof of Work chain, but then if the same transaction is “replayed” by a malicious actor on the built-in Proof of Stake chain, the seller may also lose the original version of that chain. This can be a very expensive lesson learned for some NFT collectors.
However, all this is unlikely to happen, at least with ETHPOW, the most prominent Proof of Work fork on the horizon. Ethereum core developer Marius van der Wijden said that replay attacks are only possible if the blockchain shares the same chain identifier. Decrypt– and Guo Separately confirmed to Decrypt that ETHPOW will use a different string identifier.
“There will be no problem with replay attacks,” said Van Der Wijden, given that ETHPOW will have its own unique string identifier.
This may not be the case with any other Proof of Work chains that have been forked from Ethereum, however, opening the window to potential cross-chain chaos. Powell offered a simple tip for NFT collectors to follow to avoid any problems – but that would mean losing potential money for flipping duplicate assets.
The best way to protect against replay attacks is to not interact at all with [proof-of-work] Chain,” she said. “If you do not interact with [proof-of-work] series, [then] You don’t need to do anything and you won’t have to worry about replay attacks.”
Projects and platforms decide
In any case, duplicate NFTs will exist due to the ETHPOW chain and other potential forks, and there is likely to be a level of confusion about the “official” or “legitimate” origins. However, there can be a frenzy of feeding these copies as NFT owners try to flip the Proof of Work versions of their valuable tokens.
This may be a short-lived window. Few in the Ethereum community believe that any Proof of Work fork into the blockchain will be a long-term endeavor with great user support.
We could see an initial barrage of NFT sales in the Proof of Work series, but if there is a bit of social sentiment around the value of the assets in the chain, there may be little demand. Duplicate asset prices are probably a small part of the real deal when it comes to popular projects, and even then, prices for Proof of Work NFTs can drop quickly.
“It is very likely that the resulting Proof of Work series will become just a shadow of the novel [proof-of-stake] String, and the amount of extractable value will drop significantly over time,” said Depp of Manifold Decrypt. “Something along the lines of, ‘If a tree falls in a forest and no one is there…’
There is a broader social consensus at the blockchain level apparently forming around the Proof of Stake chain that is integrated as the “official” home of Ethereum NFTs. But then the creators of projects and marketplaces are also indicating that they will treat the mainnet built into Ethereum only as legitimate, and the forked copies will be just unofficial ones.
The Ethereum network is preparing to merge in mid-September. In line with the broader Ethereum community, in the event of a viable PoW fork, Yuga intends to recognize only NFTs in the PoS ETH chain as subject to the relevant NFT license and eligible for the benefit offered by Yuga
Yuga Labs, creator of Bored Ape Yachting Club and now CryptoPunks IP . OwnerTwo weeks ago, he confirmed that only people who own NFTs in the proof-of-stake chain built into Ethereum are eligible for benefits within the Yuga communities. Similarly, only those owners can Marketing their photos For derivative artworks and projects.
“In line with the broader Ethereum community, in case there is a viability [proof-of-work] fork, Yuga intends to only recognize NFTs in the PoS ETH chain as subject to the relevant NFT license and eligible for facilities offered by Yuga,” the company Tweet on August 17.
Getting Started Behind the Proof of Members Only group and value moon birds The NFT project, expressed a similar position in a statement to Decrypt.
“When the Ethereum integration is successfully completed, Proof will follow the broader Ethereum community in learning about [proof-of-stake] series—including their NFTs,” wrote Proof Product Manager, Angharad “Harri” Thomas. [proof-of-work] Forks made after merging will not be recognized.”
It’s not just projects either. Market leader OpenSea, which holds a leadership share in the Ethereum NFT market, has said that it will do so Only supports Proof of Stake chain. By refusing to include NFT assets on the forked Ethereum Proof of Work chains, it could help a large section of collectors avoid confusion and deception around scam NFTs.
In other words, the creators of Ethereum believe that NFTs will function normally after merging, that any momentum around duplicate NFTs on forked chains will be short-lived, and that the creators and major markets will not even recognize the official versions on these forked chains.
Granted, this does not guarantee that everything is going according to plan. There may be technical hurdles around merging or high interest around duplicate NFTs, which can lead to confusion and deception. The best game for NFT collectors in the coming weeks may be to stay informed, avoid risky transactions or interactions, and wait for any issues to be resolved.
Additional reporting by Sander Lutz.
Stay up to date with cryptocurrency news, and get daily updates in your inbox.