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Why Might Ethereum Merge Affect your NFTs?
The Ethereum Merge is scheduled for 15 September 2022. This is sooner than expected and many people are bullish on it. However, are there any risks involved? How can you stay safe during the merge?
A possible risk that could occur during the merge is called a replay attack.
What is a Replay Attack?
During the merge, one of Ethereum's Proof of Work (PoW) fork will be live. This will create two versions of your NFT. Exciting, right? Free NFT? One on the old PoW chain and one on the new PoS chain.
Hold up. There's a catch to it. This is too good to be true. So what's the catch? Your original NFT is recreated when a transaction occurs on one blockchain and is repeated on another.
A problem occurs when someone can replay your transaction on the other chain to acquire versions of your NFT. This is what is called a "replay attack" .
"…For example, after the merge, you sell your CryptoPunk NFT on the PoW chain for 10 ETH.
The problem is that once you make that sale, someone may be able to 'replay' that same transaction on Ethereum 2.0,
Selling your PoS CryptoPunk NFT for 10 ETH. Ouch!…"
What Is the Possibility of the Replay Attack Occurring?
The probability of the replay attack occurring is from zero to a probable 100 percent. We do not guarantee that it might happen, but what if it happens. Of course it might happen.
Remember when Do Kwon was told by Blockchain engineers to watch out for the instability of TerraLuna? They even explained how the system could collapse and it is the same way it collapsed? This is what we're telling you now to stay safe.
So What Can You Do to Protect Your NFTs From a Replay Attack?
Before the merge,
Delist any NFTs you have for sale on the old ETH network. This is before 15 September 2022.
After the merge,
Transfer your NFTs on the old PoW chain to a NEW wallet.
This helps to break the link between your PoW NFTs and PoS NFTs. The transfer will also be inexpensive given the expected drop in price of ETH transactions after the merge.
Note: The 'replay attack' also applies to the ETH token itself and other assets, so please be careful out here.
Also Do Your Own Research (DYOR) because we are just trying to raise awareness to a potential problem so we're all best prepared for the merge.
Crypto Firms Are Preparing for the Ethereum Merge Too
You should prepare for the merge too. Companies like Coinbase will pause any Ethereum or ERC-20 transactions as a precautionary measure. However, this is a standard practice and all networks will employ the same precautionary measure, including Binance, FTX and Crypto.com.
What about users who have locked their Ethereum? This is the question that remains. How can they make early transfers to prevent losses? Seems the only possible solution is to hold their breath and unstake after the merge. Another solution is to contact the platform you are using.
I have also heard that many people are moving to the Dogechain. What do you think? Both billionaires and common investors are there. Well, let's wait and see.
Info credits: AdamMcBridge.eth
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