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Business News/ Markets / Cryptocurrency/  Crypto cos bet on Ethereum Merge to revive volumes

Crypto cos bet on Ethereum Merge to revive volumes

The Merge, one of the most anticipated events in the short history of cryptos, begins around 10.30am IST on Thursday

Vitalik Buterin, one of the co-founders of Ethereum. bloombergPremium
Vitalik Buterin, one of the co-founders of Ethereum. bloomberg

NEW DELHI : Indian crypto exchanges are banking on the Ethereum Merge to revive trading volumes, which have fallen drastically since April. Firms like CoinSwitch and KuCoin are running online campaigns to create awareness among users about the Merge and encourage them to invest in ETH and other cryptos based on the Ethereum blockchain.

The Merge, one of the most anticipated events in the short history of cryptos, begins around 10.30am IST on Thursday. It is an update to the Ethereum blockchain, which moves it from the current proof-of-work (PoW) consensus mechanism to the more environment-friendly proof-of-stake (PoS) system.

The PoW system of mining cryptocurrencies, used by tokens like Bitcoin, allows all miners to lend computing power to validate crypto transactions, and hence draws a lot of computing power. Since most of this power comes from fossil fuels, POW mining is said to be bad for the climate. On the other hand, PoS limits the number of miners, hence reducing the total power consumed by crypto mining.

In a blog post in May last year, the Ethereum Foundation, a non-profit dedicated to supporting the Ethereum ecosystem, claimed that Ethereum will use 99.95% less energy post merge. Ether, the native token of the Ethereum blockchain, is already the second most valuable crypto in the world, and the Merge is expected to boost its value as more developers take interest in building apps on the Ethereum blockchain.

In fact, the Merge has already been driving trading volumes on crypto exchanges. Indian crypto exchange BuyUcoin said the exchange has seen a 25-30% jump in ETH trading on its platform. Crypto unicorn, CoinSwitch, said it has seen a 61% increase in traffic for ETH while the number of ETH trades has grown by 36% since 5 September.

“Trading activities on ETH have seen increased traction with volumes increasing by 70-80% than the usual volume on ETH," said Minal Thukral, executive vice president (growth & strategy) at CoinDCX.

In a bid to boost trading activity around the Merge, the exchanges are also running special offers to incentivize crypto traders, many of whom had stopped trading due to the ongoing bear phase of the market. These include lucky draws for top traders to win prizes, discounts on trading fees, and more.

For instance, CoinSwitch is running a campaign called “Ethereum Trading League" that will reward users who book profits on ETH trades. “Points will be calculated based on the profit percentage and ETH trading volume. The prize pool is 2 lakhs," a CoinSwitch spokesperson said.

KuCoin is also running events timed around the merge offering a prize pool of 100,000 USDT stablecoins.“We provided our users with generous rewards for promotions. With those promotional programs, the asset amount of ETH and trading volume on the KuCoin platform have increased significantly," said Johnny Lyu, chief executive of KuCoin.

Shivam Thakral, chief executive of BuyUcoin noted that the shift will impact other crypto assets too. “We can expect significant price movement across crypto assets post the Merge," he said.

The Ethereum Foundation itself is giving away 50,000 ETH on a first-come, first-served basis, to drive mass adoption of ETH after the Merge.

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Abhijit Ahaskar
Abhijit writes on tech policy, gaming, security, AI, robotics, electronics and startups. He has been in the media industry for over 12 years.
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Published: 15 Sep 2022, 01:03 AM IST
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