Chainlink Plans to Only Support PoS After Ethereum Merge
Chainlink has announced that it will not support any proof-of-work Ethereum forks after Ethereum’s merge to proof-of-stake.
In a memo to the community, the smart contract oracle provider said it wants to align with the Ethereum community’s social consensus to change Ethereum’s consensus mechanism to proof-of-stake. To ensure minimal disruption, Chainlink is conducting a thorough quality check.
Ethereum has been undergoing a transition from being a network that relies on so-called miners to validate transactions (proof-of-work), an energy-intensive process, to a network that instead relies on so-called validators that “stake” Ethereum tokens for a chance to validate transactions (proof-of-stake).
One Chinese developer Hongcai Gu has reportedly assembled a team of 60 developers to remove the difficulty bomb, a part of the Ethereum code designed to push Ethereum miners away from the proof-of-work consensus mechanism.
Other miners may continue mining ETC on the Ethereum Classic blockchain, the first version of Ethereum, to ensure that their mining equipment doesn’t become obsolete.
Analysts have cautioned against forks developed for short-term goals without considering how the network will be supported in the long run.
Ethereum co-founder Vitalik Buterin said he does not expect forks to harm the Ethereum network.
Chainlink asks developers to test smart contracts before & after merge
Chainlink assured the community that the protocol and its services would be operational throughout and after Ethereum’s merge. It recommended that customers unsure of the merge’s impact on their decentralized applications and smart contracts pause their operations to protect users. Smart contracts developed and deployed on proof-of-work blockchains may behave in unexpected ways. Developers accessing any of Chainlink’s oracles in their smart contracts must test whether the service works before and after the merge.
Ethereum developer Tim Beiko, spearheading the software development for merging the current Ethereum blockchain with the Beacon chain, a new proof-of-stake consensus layer, said that ideally, users of Ethereum should not notice any material differences in the network’s operation.
Chainlink hit by TerraUSD meltdown
Chainlink provides data feeds to smart contracts on programmable blockchains like Ethereum and Cardano, informing them of real-world conditions. Recently, the company suspended the LUNA price oracle after the collapse of the TerraUSD/LUNA ecosystem in early May, causing the Venus protocol to suffer an exploit resulting from a LUNA price discrepancy. The Venus protocol is the second-largest DeFi protocol on the Binance Smart Chain, with approximately $750 million in total value locked at press time. Chainlink’s native token LINK experienced a sharp selloff in May as whales and institutional investors dumped the token, causing its price at the end of May to sink by 32% compared to the start of the month.
At the 2021 Cardano Summit, a partnership with Chainlink’s oracles was announced to support the burgeoning ecosystem of Cardano decentralized applications. One of the critical use-cases of oracles was to provide reliable weather data for agricultural insurance in Sub-Saharan Africa. Election results, sports statistics, and cryptocurrency rates were also mentioned as potential use cases.
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