A year following the Ethereum Merge, Grayscale ultimately decided to relinquish all rights associated with proof-of-work Ethereum tokens.
Grayscale, a major cryptocurrency investment firm, has recently made the decision to relinquish all their rights to the Ethereum tokens (ETHPoW) that exist after the merge from proof-of-work (PoW) to a new
On Sept. 18, Grayscale made an announcement stating that the firm has completely relinquished all rights to ETHPoW tokens on behalf of the record date shareholders of each product.
After conducting a comprehensive evaluation, Grayscale concluded that the ETHPoW tokens lack significant liquidity. Additionally, the custodian of these tokens does not provide support.
In their statement, the firm expressed that exercising the rights to acquire and sell the ETHPoW tokens is not feasible. Consequently, Grayscale has decided to relinquish its claim on these assets on behalf of its shareholders as of the record date.
Grayscale’s recent decision to relinquish the rights for ETHPoW tokens follows over a year after the momentous Ethereum Merge. This pivotal event marked the complete shift of Ethereum from proof-of-work (PoW) to the more efficient proof-of-stake (PoS) consensus mechanism.
Furthermore, the Merge, which took place on Sept. 15, 2022, resulted in a significant split within the Ethereum blockchain—creating the main PoS-based Ethereum and a subsidiary PoW-based Ethereum network.
Grayscale’s ETHW Choice Precedes Ethereum Futures ETF Proposal
After the Merge, Grayscale deliberated on whether to acquire EthereumPoW and sell ETHW on behalf of the shareholders who held their positions until the record date. The company took six additional months to reach a decision due to uncertainties surrounding the support for ETHW tokens from digital asset custodians and trading venues.
Some investment firms, like ETC Group, have tried creating dedicated EthereumPoW exchange-traded products (ETPs), unlike Grayscale. However, ETC Group ultimately discontinued its PoW-based ZETW ETP a mere six weeks after launch due to the unavailability of suitable custody providers.
The announcement of Grayscale’s ETHW decision preceded their proposal to introduce a new Ether futures exchange-traded fund by just one day. They formally requested the listing and trading of shares for the Grayscale Ethereum Futures Trust (ETH) ETF under the New York Stock Exchange Arca Rule 8.200-E on Sept. 19, as documented in their filing with the United States Securities and Exchange Commission.
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