Many ETH holders are hoping for bonuses in the form of “powETH” airdrop tokens, although it is uncertain whether the fork will occur or the token that the fork will have any value. This cannot stop those speculators.
Many have taken the approach of borrowing ETH on the blockchain, with plans to pay it back after The Merge and sell the fork tokens they received. But this has led to an increase in the amount of ETH borrowed from today’s lending platforms. Make those protocols have to find a way to cope.
Before the airdrop happened, the DAO lending protocol was taking different approaches to reduce its widespread market spread. due to soaring borrowing activity
For example, Aave has proposed to stop borrowing ETH and increase variable borrow APR from 103% to 1000% during The Merge. to reduce the risk
Michael Bentley, Co-Founder and CEO of Euler Labs warns that “borrowers who try to borrow ETH in hopes of fork and rush to sell powETH may find that by the time The Merge takes place, they will have to pay more interest on the ETH loan than the profit they generate on powETH due to The cost is high at the last minute.”
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