ETHPOW Buzz Fizzles as Would-Be Token’s Price Tanks
Earlier this month, some cryptocurrency exchanges rushed to list ETHPOW, the token of a potential, duplicate Ethereum protocol, betting that crypto traders would want to speculate on the token's price even before its launch.
After more than a week of trading, their expectations have fizzled as crypto traders’ appetite have faded.
Data shows that daily trading volume dropped 66% to $4 million from $13 million after the first trading week. Meanwhile, ETHPOW’s price fell to $50 from as high as $140, according to cryptocurrency price tracker CoinMarketCap. Trading data on Poloniex and BitMEX, two exchanges that listed the token, also show low trading interest and falling prices.
ETHPOW’s declining fortunes underscore the unpredictability of forks and illustrate how fickle investor interest can be. The precedent may also discourage other crypto exchanges from listing the token too hastily.
The Ethereum blockchain is gearing up for its highly anticipated upgrade to proof-of-stake technology known as "the Merge," which would make ETH miners obsolete.
To counter that, Chandler Guo, a prominent crypto miner and investor, proposed crafting a duplicate of the Ethereum blockchain via a hard fork that would keep proof-of-work mining. When the fork occurs, every ether owner should receive the same number of ETHPOW tokens as their ETH holdings.
Read more: Who Will Mine Ethereum After It's Gone?
BitMEX analysts said earlier this month that ETHPOW “may generate a lot of excitement” and forecasted that ETH/ETHPOW “will be a popular trading pair post-split.”
Yet other than exchange listings and the support of Tron founder Justin Sun, the protocol has yet to build much momentum. Information about what applications ETHPOW would support or how it would generate users has been scarce.
“Pertinent details on its core functioning are few and far between,” Walter Teng, a crypto analyst at Fundstrat, told CoinDesk. “Will stablecoin providers fully or partially back coins on ETHPOW? Will decentralized finance protocol contributors maintain product development on ETHPOW, or will they require others to step in? Will non-fungible token (NFT) projects recognize IP (internet protocol) addresses in the fork?
“These are key questions in determining the value of the PoW fork after the Merge, yet they remain unanswered," he said.