Forking Profitable? Compound Founder: Don't Sell Useless USDC, Swap for a Bit of PoW ETH

"Please exercise extreme caution with any transactions you sign on a forked chain." Compound founder Robert Leshner warns those looking to profit from PoW forks.

Things to Watch Out for During the Merger

Robert Leshner stated that the Ethereum merger is expected to take place in a few weeks, and he wants to offer some advice to beginners and experts.

• First, do not fall for any scams. In times of uncertainty, people are more susceptible to deception. Be extra cautious with the content you read, click on, and sign.
• Avoid overleveraging, taking on too much risk, or doing anything foolish with your investment portfolio. This is not a good time to follow the trend. The volatility will remain high in both directions.
• Ensure that your assets are securely custodied, either by an exchange you trust or a hardware wallet that you fully control.

Things to Watch Out for in a PoW ETH Fork

Robert Leshner mentioned that if Ethereum forks, the entire state of Ethereum will not transition. Stablecoins and DeFi applications on the forked chain are likely to become immediately invalid.

You will not double your wealth as a result.

Robert Leshner advised to be extra cautious with any transactions signed on the forked chain. Since your private key is valid on both chains, miners could potentially replay transactions on the Ethereum chain. Note: Leshner likely refers to a replay attack. He warned against selling any invalid USDC on the PoW forked chain in exchange for a little PoW ETH.

Be extremely careful about signing transactions on a fork chain; you have one private key that works on both chains, and a miner could potentially replay a transaction on Ethereum.

Don’t “sell all my worthless (POW) USDC for a little bit of (POW) Ether”.

— Robert Leshner (@rleshner) August 17, 2022

About Replay Attacks

According to Binance Academy, in the blockchain realm, a replay attack refers to the theoretical ability of attackers to conduct such an attack during a hard fork. This is because a transaction processed on one ledger remains valid on the other ledger before the hard fork. Therefore, someone who receives a specific amount of cryptocurrency on one ledger can replicate and resend the transaction on the other ledger. However, most hard forks have protocols in place to protect against replay attacks.