What You Need to Know About Ethereum Merge on Kraken | Cryptocurrency News

seven years ago, on 8 August 2015Kraken was the first exchange to make Ethereum (ETH) available to millions of users. Today, we are pleased to announce that Kraken will support ethereum merge Which is estimated to happen between September 10-20, 2022.

Merge marks the end of Ethereum Proof of Work (PoW) mechanism and the beginning of its transition a Proof of Stake (PoS) pattern. This transition is a two-stage process. The first step is a network upgrade, “Bellatrix” (scheduled for September 6, 2022), at the consensus layer. “Paris” (expected between September 10-20, 2022), the transition of the execution layer from PoW to PoS, will follow.

The merge is a major milestone for the Ethereum community and Kraken seeks to support this event in a way that helps our customers and Kraken’s mission. To accelerate the adoption of cryptocurrency so that you and the rest of the world can achieve financial freedom and inclusion.

Normal Operation: Holding, Staking

After the merge the Ethereum PoS will retain the ETH ticker and the ETH trading markets will remain active and available as they were before the network update.

To ensure a smooth transition, deposit and withdrawal for ETH and all Ethereum-Based (ERC20) Token will be temporarily suspended during the merger. meeting Status.kraken.com For real-time updates.

Your property will remain safe as always, and no action is required on your part. There will be no need to convert your existing ETH to anything else before, during or after the merge. This will continue to show up in your balance as ETH.

After the merge, the staked ETH (ETH2.S) balance will not be unlocked or made available for unstake or transfer until further updates.The Ethereum Network (“Shanghai Upgrade”) is complete, enabling those features for the ecosystem. Please note: Kraken has no control over this process and no official date has been announced for this upgrade.

The reward rates for the ETH you stake are currently estimated at between 4% and 7% per annum (RPY); These rewards are locked in your account as ETH2. These rewards will continue as usual after the merger. Additionally, you will also receive a new set of rewards for post-merge on-chain activity. These new rewards will be credited to your account as follows Fixed ETH,

forked token

A fork is an event that occurs when a blockchain switches into two possible further paths. In this case, it is possible that Ethereum will be forked into a PoW blockchain and a PoS blockchain.

Kraken will be subject to any new forked token(s) that may come into existence before, after, or during a merger through our standard, strict review process, before any token(s) become available for trading. We will pay close attention to potential fork chains. However, there is no guarantee that any such forked token will be made available for trading, according to our policy,

If Kraken decides to support trading of ETH PoW (or other forked tokens), new spot markets will be created.

Even if Kraken does not decide to support the trading of ETH PoW (or other forked tokens), Kraken may decide to support the custody of ETH PoW (or other forked tokens). In that case, if you hold ETH in your account, we will credit your account with a new ETHW (or other specified ticker) token.

Please note: It is possible that ETH deposits sent at the close of the merge event may not be counted in the snapshot of users’ ETH balances. Only the balance of the account settled at the snapshot time will be considered.

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Traders holding open margin positions should be aware of the behavior of their positions during the merge, as forking tokens can affect your account once credited/debited.

In the event Kraken decides to support custody of ETH PoW (or other forked tokens resulting from the merge)., Margin positions will be treated as if the user has underlying ETH, which means Kraken:

  • add Relevant amount of forked tokens in the account for ETH long positions
  • Cutting Relevant amount of tokens forked from the account For ETH short position

Below is an example of how Kraken supports the custody of the ETH fork token (eth_fork,

If a client is 10 ETH long on ETH/USD at the time of the merge, we will add 10 eth_fork Once supported the custody of Kraken in their account eth_fork (+10 eth_fork,

If a client is 5 ETH short on ETH/USD at the time of the merge, we will decrease 5 eth_fork From his account once backing Kraken’s custody eth_fork (-5 eth_fork,

To reflect that reduction, customers who have low ETH positions at the time of the merge will see a negative balance Access to their account, if and when supports Kraken’s custody eth_fork, The negative balance can be resolved either by depositing the appropriate token and amount or by purchasing the appropriate token and amount on Kraken.

Clients who have been on ETH/BTC, ETH/EUR, ETH/GBP, ETH/USD or ETH/USDC for a long time are Long ETH.

Shortening those pairs will make a customer Short ETH.

However, customers who have been on ADA/ETH, LINK/ETH or DOT/ETH for a long time are short ETH,

Shortening those pairs will make a customer Long ETH,

This treatment of forked ETH tokens applies to any and all liabilities/borrowings in the Kraken Products.

Why deduction on short margin positions?

You were provided with an amount of ETH to support the transaction with leverage. To close the position, you must return the same amount of ETH, but you are also responsible for refunding any proceeds from the network fork that occurred while the ETH was awarded to you.

Updates will be made available on our Official Kraken Blog and the official Twitter account (@krakenfx And @krakensupport) as more information becomes available.

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These materials are for general information purposes only and are not intended to be investment advice or recommendation or to buy, sell or hold any digital asset or engage in any specific trading strategy. Some crypto products and markets are unregulated, and you may not be protected by government compensation and/or regulatory protection schemes. The unpredictable nature of crypto asset markets can lead to a loss of money. Any return and/or any increase in the value of your crypto assets may be taxable and you should seek independent advice on your taxation situation.

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