Centralized USDC to decide the future of ETH hard forks says Vitalik Buterin, while speaking at the BUIDL Asia conference in Korea.
A centralized stablecoin like Tether (USDT) or Circle USD (USDC), according to Ethereum co-founder Vitalik Buterin, “could become a significant decider in future contentious hard forks.”
On August 3, Buterin and Illia Polosukhin, the co-founder of the Near Protocol (NEAR), spoke about Ethereum’s upcoming Merge at the BUIDL Asia conference in Seoul.
According to the co-founder of Ethereum, centralized stablecoins may play a “significant” role in determining which blockchain protocol the business will “respect” in case of a tough fork.
We are thrilled to invite @VitalikButerin as the keynote speaker! After his keynote speech on August 4th, Vitalik will be doing a fireside chat with @ilblackdragon on how the Merge affects L1 and L2 ecosystems.
— BUIDL Asia 2022 (Aug 4-5, Seoul) (@buidl_asia) July 14, 2022
A hard fork happens when a blockchain network’s protocol undergoes a significant change that effectively splits it into two versions. Typically, one chain becomes the preferred option.
“At the moment of the merge, you will have two [separate] networks […] and then you have exchanges, you have Oracle providers, you have stablecoin providers that are kind of deciding in a way, which one they respect.”
Because of the cryptographically equal number of USDT on each chain at that time, “they [Tether] need to stop respecting one of them,” said Buterin.
“Because at that point, you’ll have 100 billion USDT on one chain and 100 billion USDT on the other chain.”
Buterin countered that the centralized stablecoin issue is more of a concern for upcoming hard forks and claimed that he “had not seen any indication” that such a contention would be a problem in Ethereum’s upcoming Merge. And so it would appear that it is up to centralized USDC to decide the future of ETH hard forks.
“I think in the further future, that definitely becomes more of a concern. Basically, the fact that USDC’s decision of which chain to consider as Ethereum could become a significant decider in future contentious hard forks.”
In the subsequent five to ten years, he continued, Ethereum might experience more contentious hard forks where centralized stablecoin providers might have more sway.
Following the successful integration of the Goerli test net in mid-August, The Merge is expected to proceed. Ethereum developers are aiming for September 19 as the permanent date for the merger of the existing PoW chain with the PoS chain.
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