As the highly anticipated Ethereum “merge” approaches, many companies have made public their support for the upgrade. Among them is now Uniswap Labs.
“Uniswap Labs is eagerly awaiting the merge. It’s an important step in scaling Web3 and immediately reduces the environmental impact of Ethereum,” a Uniswap Labs spokesperson tells Coins2Day. “During this transition, users should know that the Uniswap protocol and web app will continue to work seamlessly.”
Being the largest decentralized exchange on Ethereum, the Uniswap protocol is noncustodial, permissionless, and self-executing through the use of smart contracts—or collections of code that run on a blockchain. But Uniswap Labs is the studio largely behind the protocol’s development, and its endorsement of the post-merge Ethereum proof-of-stake chain is significant.
The merge will shift Ethereum from a proof-of-work consensus mechanism to proof of stake. This means that mining on Ethereum will be eliminated, and instead a network of validators will verify transactions.
Though most in the Ethereum community are excited about the merge, as it reportedly will reduce Ethereum’s ecological footprint by 99% or more, miners—unsurprisingly—aren’t pleased, as they’ll lose their source of income. Many have invested tens of thousands of dollars in mining equipment.
A cohort of miners are even planning an Ethereum hard fork post-merge, to create what they call “ETHPoW,” in an attempt to continue a proof-of-work chain that lets them keep generating income. If a fork happens post-merge, projects will have to determine which chain—proof of stake or miners’ proof of work—retains value.
With big names like Uniswap Labs, and recently stablecoin giants such as Circle and Tether, in support of the post-merge Ethereum proof-of-stake chain, attempts to create a successful forked chain have declined, especially as decentralized finance (DeFi) protocols provide much of the total value locked on Ethereum.
The possibility of ETHPoW has stirred conversation on crypto Twitter—even Ethereum creator Vitalik Buterin acknowledged it earlier this month during a press meeting, noting that “if a proof-of-work fork becomes large, then there’s definitely a lot of applications that will have to choose one way or the other.”
However, Buterin expressed that he isn’t worried about a fork hurting Ethereum and its merge, adding that most major applications have shown support for proof of stake, and those pushing for a fork are just “a couple of outsiders that basically have exchanges, and most just want to make a quick buck.”
And the majority of the crypto community agrees. “No one in the ETH community apart from miners want to stay on proof of work,” the Flashbots strategy lead and research collaborator at Paradigm known as Hasu tweeted in early August. “This fork chain will be a giant retail trap. Miners, exchanges, traders are all trying to talk it up for their own self-interested reasons.”