In an announcement on Twitter, they revealed that the use of the liquidity freeze technology was to protect users from hackers.
Liquidity pool freeze plan explained
On his Twitter account, the ETHPOW group reveals that it will freeze some smart contracts of the lending protocol. According to them, in the first few days after the fork, users’ ETHW tokens deposited in liquidity pools may be compromised. Pools like Uniswap, Aave and Compound will have deposited ETHW tokens.
ETHW Core to Introduce Liquidity Pool Freezing Technology to Protect Users’ Assets pic.twitter.com/LTA0p8Ghm0
– EthereumPoW (ETHW) Official #ETHW #ETHPoW (@EthereumPoW) August 16, 2022
According to the group, these tokens can be exchanged by hackers for worthless USDT, USDC and WBTC. As a result, ETHW Core is making the decision to freeze the smart contracts from the lending pools until these companies can find a better solution.
They also disclosed that the freeze will not be applied to staking contracts if they deal with only one asset. ETHW Core also recommended that users remove their tokens from liquidity pools such as decentralized exchanges and lending platforms.
This move has drawn criticism from various influential figures in the crypto community. Foobara blockchain developer and verifier, criticized the group for questioning its competence to carry out the move.
gonna be hilarious
turns out lending protocols do indeed lend out your assets
good luck getting them back https://t.co/Xy031O0gcT
– foobar (@0xfoobar) August 16, 2022
Alberto Rosas, the CEO of Gamium Corp, questioned the decentralization of the blockchain if a small group can make such important decisions. He believes that ETHW will become a slow, centralized blockchain with no market value.
Is Ethereum’s hardfork likely?
The Ethereum merger will change Ethereum’s consensus mechanism from Proof-of-work to Proof-of-stake. This will reduce Ethereum’s power consumption by over 99%. However, it also replaces the miners currently required by the PoW system with validators.
As a result, miners could switch to a PoW chain like Ethereum Classic, or to a hard fork of the Ethereum blockchain. However, given the strong pressure against the Ethereum hardfork, such a move is unlikely to have an impact.