The cryptocurrency world braced for one of its most significant network upgrades in 2022—the Ethereum Merge. As anticipation built around the transition from proof-of-work (PoW) to proof-of-stake (PoS), major exchanges like Binance took proactive steps to ensure user safety and platform stability. Among the most notable moves was Binance's announcement regarding Ethereum withdrawal suspension and support for a potential Ethereum PoW fork, branded as ETHW.
This article dives into the details of Binance’s strategic preparations ahead of the Merge, explains what ETHW is, how users were affected, and what it all means for the future of Ethereum and its ecosystem.
Ethereum Merge: A Brief Overview
The Ethereum Merge marked the long-awaited shift from energy-intensive mining to a more sustainable staking model. Scheduled around September 15, 2022, this upgrade aimed to improve scalability, security, and environmental efficiency. However, such a fundamental change also opened the door for a possible network split—commonly referred to as a hard fork.
In anticipation, several groups signaled intentions to continue supporting the original PoW chain under a new ticker: ETHW (Ethereum Proof-of-Work). While the majority of the community backed the PoS transition, the existence of a minority PoW chain created uncertainty—and opportunities.
👉 Discover how leading platforms handled blockchain transitions like the Ethereum Merge.
Binance’s Pre-Merge Actions
To manage risks associated with network instability and potential forks, Binance implemented a series of precautionary measures:
- Suspension of Ethereum (ERC-20) Deposits and Withdrawals: Approximately one hour before the Merge—starting around 08:30 UTC on September 15, 2022—Binance paused all ETH and ERC-20 token transfers on the Ethereum network.
- WETH Services Temporarily Halted: Starting September 14 at 08:00 UTC, Wrapped Ether (WETH) deposits and withdrawals were suspended. Additionally, the conversion between WETH and ETH was disabled until post-Merge network conditions stabilized.
These actions ensured that user funds remained secure during a period of high volatility and technical unpredictability.
Supporting the ETHW Fork: What Users Needed to Know
One of Binance’s most critical announcements was its conditional support for ETHW, should a viable PoW chain emerge from the Merge:
- If a new Ethereum PoW mainnet persisted after the fork, Binance committed to supporting it under the ETHW symbol.
- Eligible users who held ETH or WETH in their Binance accounts prior to the fork would receive 1:1 compensation in ETHW tokens.
- The distribution process and eligibility criteria were to be detailed in a follow-up announcement.
This move aligned with Binance’s broader policy of supporting major forks (like Bitcoin Cash or Ethereum Classic), provided they demonstrated sufficient community and technical viability.
Why WETH Holders Faced Restrictions
A key point of confusion for users involved WETH (Wrapped Ether). Unlike native ETH, WETH is an ERC-20 token designed to represent ETH on decentralized applications. Due to the complexity of unwrapping and managing wrapped assets during a fork:
- Any WETH deposited during the suspension period would not be credited to user accounts.
- Users who held WETH instead of ETH would not qualify for ETHW airdrops.
This underscored the importance of holding native assets rather than wrapped versions when major network events occur.
Key Implications for Crypto Investors
The Ethereum Merge wasn't just a technical upgrade—it had real financial implications. Here’s what investors should understand:
1. Forked Tokens Can Have Real Value
While many dismissed ETHW as a short-lived protest chain, it gained traction among miners and certain exchanges. Early supporters saw speculative value, and trading began shortly after the fork.
2. Exchange Policies Shape Access
Not all platforms chose to support ETHW. Binance’s decision gave millions of users automatic exposure—but only if they held qualifying assets. Those using unsupported exchanges or self-custody wallets had to manually claim or trade their forked coins.
3. Timing Is Critical
The one-hour withdrawal freeze highlighted how timing affects asset control. Users moving funds close to the Merge risked delays or missed opportunities.
👉 Learn how top exchanges manage blockchain forks and protect user assets.
Frequently Asked Questions (FAQ)
Q: What is ETHW?
A: ETHW stands for Ethereum Proof-of-Work, a continuation of the original Ethereum blockchain using mining instead of staking. It emerged as a result of opposition to the PoS transition following the Merge.
Q: Did everyone receive free ETHW tokens?
A: No. Only users who held ETH or WETH on supported exchanges like Binance before the fork were eligible. Those on non-supporting platforms or with funds in cold wallets needed to manually claim them.
Q: Why did Binance pause WETH services?
A: Wrapped tokens like WETH introduce complexity during forks due to smart contract dependencies. Pausing services prevented errors in fund crediting and ensured accurate distribution of any forked assets.
Q: Is ETHW still active today?
A: Yes, ETHW continues to operate independently with its own network, miners, and community. However, it holds significantly less market value and developer activity compared to mainstream Ethereum (ETH).
Q: Could the Merge cause my ETH to split automatically?
A: Not automatically. Without exchange or wallet support, users must take technical steps to access both chains after a fork. Most centralized platforms handle this process behind the scenes for supported tokens.
Q: What happens to staking rewards after the Merge?
A: After transitioning to PoS, validators earn rewards through staking rather than mining. Regular stakers—either solo or via pools—continue earning yield based on network inflation and participation rates.
Strategic Takeaways for Future Upgrades
The Ethereum Merge serves as a blueprint for how large-scale blockchain transitions should be managed:
- Exchanges play a gatekeeping role in determining which forks gain legitimacy.
- User education is essential—many were unaware of the difference between ETH and WETH until it affected their eligibility.
- Proactive communication from platforms reduces panic and ensures smoother transitions.
As blockchain networks evolve, similar events may occur with other major protocols—making awareness and preparedness crucial.
👉 Stay ahead of blockchain upgrades and fork events with real-time market insights.
Conclusion
Binance’s handling of the Ethereum Merge demonstrated a balanced approach between risk management and user empowerment. By pausing withdrawals, clarifying WETH policies, and committing to support ETHW under specific conditions, the exchange helped safeguard user interests during a pivotal moment in crypto history.
For investors, the episode reinforced key lessons about asset custody, the impact of governance splits, and the importance of staying informed. Whether you're holding through upgrades or positioning for fork gains, understanding platform policies can make all the difference.
As Ethereum continues to evolve through future upgrades like Surge, Verge, and Splurge, being prepared for technical shifts will remain a cornerstone of smart crypto participation.
Core Keywords: Ethereum Merge, ETHW, Binance, proof-of-work, hard fork, cryptocurrency exchange, blockchain upgrade