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- DappRadar is a decentralized application that conducted a report and mentioned the demerit of Ethereum Merge.
- Grayscale, a crypto investment firm, is currently acquiring a market cap of $142.82 billion.
DappRadar is a decentralized application based in Kaunas, Lithuania. The platform warned in its report about the harms which would occur to the major sector of the crypto industry after the Ethereum Merge.
The warning in the DappRadar report mentions a crypto investment giant, Grayscale, which is currently acquiring a market cap of $142.82 billion, could be an unintended casualty of Ethereum’s transition to a proof-of-stake mechanism.
“Grayscale voiced concerns over the potential impact on the Merge, especially on tokens that run natively on Ethereum. The crypto investment firm believes that the Merge may lead to a fork that might have unexpected and unfavorable outcomes.
Grayscale’s concern is that the Merge might create a scenario where stablecoins and tokens locked in smart contracts might not be redeemable.
The crypto investment firm also notes that token and stablecoin holders might panic and start liquidating their holdings. Such an outcome would create a substantial amount of sell pressure.”
The reports also mentioned MakerDAO, a decentralized autonomous organization, another pessimistic party about the Ethereum Merge.
“MakerDAO developer of DAI stablecoin has expressed concern through Twitter that the Merge could do more harm than good.”
The report also illustrates that the Merge could lead to perpetual contract backwardation and negative funding.
According to the DappRadar report, MakerDAO also worries that the upcoming upgrade could negatively impact the Ethereum network’s security and performance.
“There’s also the potential of network downtime because not all Ethereum-based protocols would move to PoS with the Ethereum chain. Maker noted that this could affect users and transactions alike. Similarly, a replay attack on DAI-fork or MKR-fork was not left out of the options.”
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
