Grayscale, a prominent cryptocurrency investment firm, has made a significant decision regarding the post-merger proof-of-work (PoW) Ethereum token (ETHPoW). On September 18, the company announced that it is relinquishing all rights to the ETHPoW tokens on on behalf of its registration date shareholders.
This move by Grayscale follows a thorough review, which concluded that the ETHPoW token has not yet established substantial liquidity and lacks support from the product custodian. Consequently, Grayscale stated that it cannot exercise its rights to acquire and trade ETHPoW tokens, and on behalf of its record date shareholders, it is waiving its rights to these assets.
The decision to relinquish rights to the ETHPoW token comes more than a year after the Ethereum merger. This merger, which occurred on September 15, 2022, marked Ethereum's complete transition from proof-of-work (PoW) to Proof of Stake (PoS) . It effectively divided the Ethereum blockchain into Ethereum (ETH), primarily PoS-based, and Ethereum (ETHW), which retained a PoW component.
Grayscale took 180 days after the merger to decide whether to acquire and sell the PoW tokens, primarily due to uncertainty regarding support for ETHW tokens from digital asset custodians and trading platforms.
Interestingly, while Grayscale has chosen to relinquish its rights to ETHPoW, some other cryptocurrency investment firms, like ETC Group, have attempted to launch dedicated EthereumPoW exchange-traded products (ETPs). However, ETC Group discontinued its PoW-based ZETW ETP shortly after its launch, citing difficulties in finding qualified custody providers.
This development from Grayscale comes just a day before the company submitted a proposal to the SEC for the launch of new ETH Futures Exchange Traded Funds (ETFs). The application, filed on September 19 under NYSE Arca Rule 8.200-E, aims to list and trade shares of the Grayscale Ethereum Futures Trust (ETH) ETF.
