With the Bellatrix hard fork passing, the merge is inching ever closer.
Scheduled for mid-September, the hard fork will help Ethereum achieve scalability while reducing energy consumption.
However, it also comes with major headaches – especially for DeFi applications
Also Read: The Four Best Ways To Play The Ethereum Merge
Magic Internet Money
In a previous article, we covered how the Ethereum merge may double your tokens.
Essentially, third parties may create forks of the current Ethereum Network, which will result in your tokens getting cloned.
With such a lucrative opportunity on the horizon, crypto participants are rushing to stack up as much $ETH as possible.
This led to borrow rates exceeding 20% on major DeFi platforms such as Aave.
In response, the popular automated market maker has proposed to temporarily halt Ethereum borrowing.
With a final count of 77.87% in favor, the proposal was executed earlier today in order to “mitigate the risk of high utilization“.
This follows Binance’s decision to suspend Ethereum withdrawals ahead of the merge.
Not The Only Ones
Aave is not the only protocol to halt Ethereum-related activities ahead of the merge.
Compound Finance, an Ethereum-based Money Market protocol, is looking to pass a hard limit on $ETH borrows.
While there are still 18 hours left, the proposal has been unanimously agreed to, with a 100% voting in favour.
At the time of writing, it is uncertain how many other DeFi protocols are planning similar contingencies.
Most platforms have also expressed the opinion that they will solely be supporting the Proof-of-Stake Network, and not forks.
In fact, most in the crypto space will not have to do anything in preparation for the upcoming merge.
Also Read: What Are Replay Attacks? Why You Need To Know Them Before The Ethereum Merge
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
Featured Image Credit: Chain Debrief
