Hard forks are significant events in the blockchain world, representing a major change or upgrade to a protocol that results in the creation of two separate chains. For traders, hard forks carry various implications, including potential chain splits, new features, increased network security, market impact, and token distribution opportunities. In the case of Polygon(Matic), a highly anticipated hard fork called the Indore upgrade is approaching, aiming to address a state sync bug and enhance network performance. Alongside insights from past hard forks and the support of BingX, traders can gain valuable knowledge about the upcoming Polygon hard fork and its impact on the market.
What is A Hard Fork?
A hard fork refers to a significant change or upgrade to a blockchain protocol, resulting in a permanent divergence from the previous version. This means that the new version of blockchain is not compatible with the previous version, leading to the creation of two separate chains.
For traders, a hard fork can have several implications:
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Chain Split: A hard fork creates a split in the blockchain, resulting in two separate chains. Traders holding the original cryptocurrency before the fork will have an equal amount of tokens on both chains after the fork. This can potentially lead to the creation of a new cryptocurrency or an upgrade to the existing one.
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New Features and Functionality: Hard forks are often implemented to introduce new features, enhancements, or improvements to the blockchain's protocol. These changes can offer traders access to new functionalities, expanded capabilities, or improved performance.
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Increased Network Security: Some hard forks may be implemented to address security vulnerabilities or other technical issues in the blockchain. By upgrading the protocol, traders can benefit from enhanced security measures and a more secure trading environment.
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Market Impact: Hard forks can have an impact on the market for the cryptocurrency involved. Depending on the community's reaction and perception of the upgrade, the value and trading volume of the original cryptocurrency may experience volatility. Traders should closely monitor the market sentiment and be prepared for potential price fluctuations.
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Token Distribution: In some cases, a hard fork may result in the creation of a new cryptocurrency or a token airdrop to existing holders. Traders who hold the original cryptocurrency at the time of the fork may receive the new tokens in proportion to their holdings. This can provide opportunities for traders to acquire additional tokens and potentially benefit from their value appreciation.
It is important for traders to stay informed about upcoming hard forks and understand the implications they may have on the cryptocurrency they are trading. Keeping track of announcements, news, and the community's response can help traders make informed decisions and navigate the market during and after a hard fork.
Why the need for a Hard Fork?
The reason Polygon is going through a hard fork once their block hits a certain number is to implement important upgrades and improvements to their network. Hard forks are commonly used in blockchain projects to introduce significant changes to the protocol and address issues or add new features.[1]
In the case of Polygon, the upcoming hard fork at a specific block height is a planned event designed to enhance the network's performance, stability, or security. These upgrades may include fixing bugs or vulnerabilities, optimizing consensus mechanisms, improving scalability, or introducing new functionalities.
By setting a specific block height for the hard fork, the Polygon development team can ensure a smooth transition to the upgraded version of the network. It allows them to coordinate the implementation of changes across the network's nodes and validators.
Overall, the purpose of the hard fork for Polygon is to maintain and enhance the network's efficiency, reliability, and functionality. It reflects the project's commitment to continuous improvement and staying at the forefront of blockchain technology.
What we Know about the upcoming Polygon(Matic) Hard Fork
Polygon is gearing up for an eagerly awaited hard fork called the Indore hard fork, scheduled to take place at block height 44,934,656 in July. This upgrade will introduce PIP-12, a significant improvement designed to address a state sync bug, ensuring a smoother and more robust network experience. While Polygon's activity has shown consistent engagement with a daily volume of around $100 million, the Total Value Locked (TVL) has exhibited minimal fluctuations, currently standing at approximately $941 million. However, the platform maintains a high number of active users, demonstrating its ability to foster a loyal community. Additionally, Polygon's native token, MATIC price, has experienced positive trends, with a 2.75% increase and indications of a potential bullish outlook observed through technical analysis.
Past Polygon(Matic) Hard Fork
Polygon, an Ethereum-scaling project, has successfully completed a hard fork aimed at reducing gas fee spikes and disruptive chain reorganizations known as "reorgs." The software upgrade took place on Tuesday, with two proposals from December being approved by 87% of participating Polygon validator teams. The first proposal adjusted the mechanism for setting gas fees to keep prices low during high network activity, while the second proposal aimed to reduce the time required to complete a data block, thus preventing frequent reorgs. Following the hard fork, Polygon's native token, MATIC, has experienced a price increase of nearly 15% over the past seven days, aligning with the overall positive trend in digital-asset markets.
BingX Supports Polygon Hard Fork
BingX announces its support for the upcoming Polygon (MATIC) network upgrade and hard fork scheduled for July 11, 2023. During this event, deposits and withdrawals of Polygon (MATIC) will be temporarily suspended at 11:30 (UTC+8), coinciding with the estimated Polygon block height of 44,934,656 at 12:00 (UTC+8). It is important to note that trading of tokens on the Polygon (MATIC) network will not be affected. BingX advises users to deposit their tokens in advance and assures that all technical issues related to the network upgrade and hard fork will be handled. The upgrade will not result in the creation of new tokens. Once the upgraded network is deemed stable, deposits and withdrawals will be reopened without a separate announcement.
References
[1]Penzo, S., & Selvadurai, N. (2022). A hard fork in the road: developing an effective regulatory framework for public blockchains. Information & Communications Technology Law, 31(2), 240-266.
