Ethereum Merge may Affect Stablecoins and DeFi- Reports Claims
- DappRadar reports claim red alerts for Stablecoins and DeFi after Ethereum Merge.
- The Ethereum Merge is Likely to happen in mid of September.
DappRadar is a decentralized application mentioned in its report about the harms which would occur to the major sector of the crypto industry after the Ethereum Merge.
The Ethereum Merge will launch in mid-September, and this Merge will shift the Ethereum blockchain to a proof of stake mechanism, which is easier and less power-consuming than proof of work.
The reports also mentioned MakerDAO, a decentralized autonomous organization, another pessimistic party about the Ethereum Merge.
“MakerDAO developer of DAI stablecoin has expressed concern through Twitter that the Merge could do more harm than good.”
According to the DappRadar report, MakerDAO also worries that the upcoming upgrade could negatively impact the Ethereum network’s security and performance.
“There’s also the potential of network downtime because not all Ethereum-based protocols would move to PoS with the Ethereum chain. Maker noted that this could affect users and transactions alike. Similarly, a replay attack on DAI-fork or MKR-fork was not left out of the options.”
In addition to discussing potential issues, the tweet included a solution. Negative funding, eternal contract backwardation, network outages, replay attacks, etc., are a few of the problems noted.
Circle(USDC) and Tether(USDT) are renowned stablecoin issuers that earlier revealed their support for the Merge. Regardless, some community members are concerned about this planned migration.
Furthermore, Grayscale, a digital currency investment firm, expressed concern that the Merge could impact ERC-20 tokens. This is especially likely if there are hard forks, which are likely.
According to Grayscale, the Merge could result in tokens locked in smart contracts indefinitely, forcing holders to begin liquidating their tokens before the Merge.
The Merge means to wipe out the energy-escalated mining process while at the same time getting the Ethereum network with the assistance of marked ETH.
Following quite a while of deferrals, the Ethereum mainnet will converge with the Ethereum 2.0 Beacon Chain to finish the change from Proof-of-Work (PoW) agreement component to a Proof-of-Stake (PoS).
