There is no denying that the crypto world is thrilled about the Ethereum Merge, Ethereum’s recent upgrade which changed its transaction verification mechanism to Proof-of-Stake. Ethereum, clearly, has grand plans. It is aiming to achieve 1,00,000 transactions per second with 99.98% environmental efficiency as the first step.
But with great ambitions come great risks. Come Merge, you may find yourself wondering: Is there going to be a knockoff chain? Can my Non-Fungible Tokens (NFTs) be duplicated? And bad actors could try to fool you into taking bad financial decisions. There is so much confusion and so much misinformation already that it’s easy to fall prey to a lot of it even now.
That’s why we, at CoinSwitch, decided to bring you a detailed Merge survival guide. This guide and its seven quick pointers should help you steer clear of all the confusion and the troublemakers.
1. Filter out the noise.
The Merge is finally past us. And we know how confusing social media can be whenever there is an important event of this kind.
Bad actors are sure to try to pump out legit-looking Twitter threads, insta reels, and other content pieces. Here is a list of issues that have already cropped up so far. (And it’s only been two weeks post-Merge!)
Airdrop scams asking users to share wallet access.
Phishing attacks through emails and DMs under some pretext or the other, including helping users migrate to ETH 2.0. (There is no token called ETH 2.0, of course!)
Impersonation of key actors, like Vitalik Buterin, to lure users with the promise of free ETH.
Here is CoinSwitch Editor-in-Chief Ankit Vengurlekar warning you against such scams:
Hundreds of FAKE accounts of @VitalikButerin are peddling such fake news. There are NO FREE ETHs to be won!
You do not have to do ANYTHING as an investor for the #EthereumMerge. Don't fall for scams. Be careful.
Refer to @CoinSwitchKuber for details and reliable information. pic.twitter.com/ZW5RJbA7Pv— Ankit.Today (@ankitv) September 15, 2022
Prepare yourself, so that if such scammers show up at your door, too, you know who’s who. Look for credible Twitter handles with organic followers. See how often a Twitter account is used, and if they seem to have only become active in the last few weeks, it’s better to stay away. For videos, rely on well-known YouTube channels, like the CoinSwitch one.
And if you still struggle to separate the wheat from the chaff, perhaps you could stay off social media for a while—especially for the first month after the grand event.
2. Do nothing post-Ethereum merge
Only brave the risks associated with trading the Merge (that is, buying and selling immediately during this phase) if losing the money involved won’t leave you high and dry. For most, it may be a better bet to not take any action post-Merge.
And remember, your holdings will remain with you so long as you just sit still. ETH deposits and withdrawals might be paused as the merged chain stabilizes, but your holdings will remain yours, even if the value and activity fluctuate.
3. Pick the right chain. (If you are keen to pick one, that is.)
It is not our place to say what’s right or wrong for you, but we are happy to share a few facts to help you make the right choice.
After the Merge, ETH PoS, the Ethereum Foundation-backed mainnet, is seeing a clear majority. Some unofficial chains, like the ETH PoW, have shown up. Tempting as these chains may seem, it may not be such a great idea to make any investment decisions just yet. Because there is a lot of shilling around the Merge. And with fewer people mining on these new forks (mostly the disgruntled miners), security is a huge concern. Remember, there’s at least one specific kind of attack—a 51% attack—which becomes possible when a chain has few nodes.
And if you are unsure about the security of a chain, it would be better to stay away. As mentioned before, cut out the noise and do nothing.
That said, where you put your money is ultimately your call; we are simply urging you to not take any hasty decisions and to Do Yor Own Research (DYOR).
4. Ignore the PoS vs. PoW narratives for now.
Many new investors are being led to believe that the community is fairly divided when it comes to PoS adoption over PoW, and there are people suggesting that things may go one way or another. Don’t fall for it. Things are still evolving.
And tokens belonging to unofficial chains or knockoffs (like ETHW) are not going to just show up in your account one morning; they will only make an entry if the exchanges concerned officially list them.
5. Secure your tokens and NFTs on the ETH PoS Chain.
All of your pre-Merge NFTs will reside, independently, on the major ETH PoS chain and the unofficial ETH PoW chain, but they are only valid on the former. And they are largely safe there, with the exception of replay attacks. Protecting yourself from such attacks is not impossible, though.
In a replay attack, hackers could sell an NFT or token on one chain to make it disappear on the other, too. One such replay attack concerning the unofficial PoW chain was in fact reported on 18 September 2022, days after the Merge. The attack didn’t impact any NFTs but drained the PoW chain of 200 ETHPoW tokens.
To ensure that your tokens and NFTs on the PoS chain stay safe, simply delist your NFTs from the chain and then list them back on the PoS chain after the Merge.
6. Expect some downtime.
Since Ethereum was attempting a live Merge, the idea was that the network will not shut down even when massive upgrades are in progress. And it didn’t. Yet, one cannot fully discount the possibility of a major bug taking the network offline for a while, even post-Merge. If that does happen, you should know that Ethereum is a mature network, and any downtime or outage like that is likely to be temporary.
7. Don’t let the price fluctuations make you panic.
Although all the Merge pieces are in place, a massive issue or a prolonged network outage could lead to a de-Merge or forking. However, the network seems to be holding up pretty well till now. The prices might even be impacted in the short term, but with Ethereum, you should be able to expect everything to come back to normal rather quickly.
Therefore, even though the “Merge” looks all successful as of now, it would be advisable to give the network some time to settle down. Maybe a couple of months even.
Wrap-up
If you haven’t been living under a rock all this while, you would know how important the Merge is for Ethereum and the entire crypto space. However, some tail risks remain. We believe that with proper guardrails in place, you should be able to manage these risks and focus on enjoying the afterparty associated with this grand event better. We hope that this article has helped you do just that.
