Bitfinex launches derivatives on a PoW fork of Ethereum

The bitcoin exchange Bitfinex launched derivative products tied to potential Ethereum forks on the Proof-of-Work (PoW) and Proof-of-Stake (PoS) consensus algorithms.

Bitfinex is introducing new Chain Split Tokens (CSTs) that will allow you to trade on the potential Ethereum Merge ✅

Discover more details on how you can prepare for the fork:https://t.co/Z2B44DM8tV pic.twitter.com/3QFxVX0L02

— Bitfinex (@bitfinex) August 23, 2022

Split tokens ETHW and ETHS are available on Bitfinex’s derivatives platform.

“We are pleased to provide our users with access to these new split Ethereum tokens to help prepare for all eventualities as the network Merge approaches,” said Paolo Ardoino, the CTO.

Clients can create the asset in exchange for an equivalent amount of ETH. Back-conversion is possible at any time. The products expire on December 31, 2022.

The exchange team outlined the following possible scenarios for the new tokens:

• If in the existing Ethereum network (PoW) there is no change in the consensus algorithm, ETHS will expire and ETHW will be exchanged for ETH;
• If the consensus changes to PoS successfully without a PoW fork appearing, ETH will be swapped for ETHS;
• In the scenario of a consensus change in the main network and the launch of a new chain on PoW, both derivatives will be swapped for ETH.

“ETHW and ETHS are high-risk products and may lose some value on redemption. Please read the terms carefully and ensure you understand the split tokens available on the derivatives platform,” the statement said.

In late July, miner Chandler Gu proposed launching a fork of Ethereum that would continue to operate on the PoW algorithm. The new network is intended to let miners continue mining after the main chain moves to PoS.

In early August, some exchanges, including Poloniex and MEXC, launched trading of tokens for potential ETHPoS (ETHS) and ETHPoW (ETHW) forks. The assets trade as IOU debt notes issued 1:1 to ETH.

The BitMEX derivative platform offered users futures based on ETHPoW.

In early August, Ethereum developers planned The Merge for around September 15–16.

Ahead of the event, TC Cooperative head Bob Summerwill doubted the feasibility of a fork. Supporters of the project replied that the network split was “inevitable”.

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