[Battered DeFi investors bet on Ethereum reform] Decentralized finance (DeFi) investors are betting on Ethereum reform to get the market through the more than two-month-long cold winter. The collapse of the stablecoin TerraUSD and the Federal Reserve’s monetary tightening have caused a sharp decline in DeFi assets. The Ethereum “merger” could be one of the few catalysts that gives DeFi a much-needed boost. Ethereum co-founder Vitalik Buterin said the upgrade will take place in August. The “merger” would move the Ethereum blockchain from a “proof-of-work” (PoW) consensus mechanism to a “proof-of-interest” (PoS) mechanism, with the new mechanism replacing miners with ether coin holders to perform the same tasks. Vance Spencer, co-founder of venture capital firm Framework Ventures, said the merger would be the most important event in crypto so far this year. The upgrade could reduce the number of new ether coins issued by as much as 90 percent.
Pow: Proof-Of-Work. Miners use powerful computers to order and verify transactions for users. PoS: Proof-of-Stake, a mechanism that replaces miners with ether holders to perform the same tasks, avoiding the computational costs of a proof-of-work scheme.
