Grayscale, a major cryptocurrency investment firm, has officially made the decision to abandon all the rights to post-Merge proof-of-work (PoW) Ethereum tokens (ETHPoW). This announcement comes more than a year after the Ethereum Merge, which marked Ethereum’s full transition from PoW to proof-of-stake (PoS) on September 15, 2022.
The Decision to Abandon ETHPoW Tokens
After careful consideration and a thorough review, Grayscale has “irrevocably abandoned” all rights to ETHPoW tokens on behalf of the record date shareholders of each product. The firm’s decision was influenced by several key factors.
One of the primary reasons for this decision is the lack of meaningful liquidity for the ETHPoW tokens. Grayscale found that these tokens did not develop sufficient trading volume and liquidity to support their continued existence.
Custodian Support Issues and Delayed Decision-Making Process
Another critical factor contributing to Grayscale’s choice is the lack of support for ETHPoW tokens by the products’ custodian. Without adequate custodial support, it became impossible to exercise the rights to acquire and sell these tokens.
Grayscale’s decision-making process regarding ETHPoW tokens was not rushed. After the Ethereum Merge, the company contemplated whether to acquire EthereumPoW and sell ETHW on behalf of the record date shareholders. However, uncertainty regarding the support of ETHW tokens by digital asset custodians and trading venues led to a prolonged decision-making period.
Alternatives in the Market and Grayscale’s New Venture
Unlike Grayscale, some cryptocurrency investment firms, such as ETC Group, attempted to launch dedicated EthereumPoW exchange-traded products (ETPs). However, these efforts faced challenges. ETC Group eventually terminated its PoW-based ZETW ETP just six weeks after launch due to the absence of eligible custody providers.
In a recent development, Grayscale launched a new Ether futures exchange-traded fund, as reported by The Wall Street Journal. This move showcases Grayscale’s continued involvement in the cryptocurrency space.