The Merge marked a pivotal moment in Ethereum’s evolution, transitioning the network from Proof-of-Work (PoW) to Proof-of-Stake (PoS) on September 15, 2020. At 14:42, OKLink’s multi-chain explorer detected the first PoS block, signaling the official shift in consensus. While this milestone captured global attention, it also opened unexpected opportunities for sophisticated actors in the Web3 space.
Among them, a group of researchers reportedly executed a near-risk-free arbitrage strategy, earning close to 10,000 ETHW—approximately $200,000 at the time. Their story, detailed in a viral post titled *“How to Earn $200K Overnight,”* sparked widespread discussion across decentralized communities.
But behind the headlines lies a deeper narrative. The On-Chain Guardian team at OKLink conducted an in-depth forensic analysis of the event, revealing that the actual profits were far greater than initially assumed—and that the spotlighted group wasn’t even the top earner.
👉 Discover how on-chain analytics can uncover hidden profit opportunities before they disappear.
Understanding EthereumPoW (ETHW): The Persistence of Proof-of-Work
When Ethereum transitioned to PoS, a faction of miners refused to abandon the energy-intensive but profitable PoW model. They continued mining under the EthereumPoW (ETHW) chain, preserving the original consensus mechanism.
As with any hard fork, ETHW replicated Ethereum’s entire state: wallet balances, smart contracts, and token holdings—all mirrored on the new chain. This duplication meant users suddenly held identical assets across two chains: one legitimate (ETH on PoS), and one speculative (ETHW on PoW).
However, not all assets retained value post-fork.
Centralized stablecoin issuers like Tether (USDT) and Circle (USDC) made it clear: they would not honor stablecoins on forked chains. Since real-world reserves don’t “split,” USDT/USDC on ETHW became digital ghosts—worthless despite their presence in wallets.
These shadow assets are often referred to as "fun tokens" or "play money"—a term reflecting their lack of economic backing. Yet, while most forked tokens lost value, ETHW itself remained tradable, creating a unique asymmetry that arbitrageurs were quick to exploit.
The Arbitrage Blueprint: Turning “Fun Tokens” Into Real Profits
So how did traders turn worthless USDT/USDC on ETHW into over $2.67 million in real gains?
The answer lies within liquidity pools (LPs) on decentralized exchanges (DEXs) like Uniswap or SushiSwap.
Many liquidity providers failed to withdraw their funds before the fork. As a result, pools containing ETH or WETH remained active on the ETHW chain—still holding valuable assets. Meanwhile, the paired tokens (e.g., USDT/USDC) became valueless.
Arbitrageurs seized this imbalance:
- They deposited large amounts of worthless ETHW-USDT or USDC into these pools.
- Due to automated market maker (AMM) mechanics, they received proportionate amounts of ETHW in return.
- These newly acquired ETHW tokens were then transferred to centralized exchanges and sold for real fiat or crypto.
This process, known as “meme-to-value” arbitrage, allowed participants to effectively swap digital play money for real cryptocurrency—without investing capital at risk.
According to OKLink’s On-Chain Guardian team, over 217,129 ETHW (valued at $2.67 million) were extracted through this method. Surprisingly, the group featured in the viral article ranked only third in total profits. The top address earned nearly three times more, highlighting how quietly and efficiently this exploit was executed.
👉 See how real-time on-chain monitoring could help you detect similar anomalies early.
On-Chain Forensics: Combining Data + Code Analysis
This type of “bad money drives out good” exploitation isn’t new. Similar tactics have been observed in rug pulls, where malicious developers drain liquidity by swapping out valuable assets for worthless tokens.
What sets OKLink apart is its dual-layer defense system: on-chain data analysis + smart contract code auditing.
The Risk Token Scanner, a feature developed by On-Chain Guardian, runs 24/7 surveillance across EVM-compatible chains. It tracks key indicators such as:
- Sudden liquidity drops
- Whale movements
- Suspicious swap patterns
- High-tax or honeypot contracts
By monitoring top beneficiary addresses in liquidity pools, the tool flags tokens involved in exit scams with a [Rugpull] tag, enabling users to react before losses occur.
Currently supporting 2 EVM chains with plans to expand to 9, the scanner analyzes over 4.18 million tokens and has already identified more than 160,000 high-risk contracts. It detects over 30 risk categories, including貔貅盘 (Ponzi-like traps), excessive transaction taxes, and blacklisted functions.
This proactive approach transforms reactive security into predictive defense—giving traders and investors critical lead time to protect their assets.
Strengthening Web3 Security: Building the Blockchain Firewall
As decentralized finance grows, so do attack vectors. Forgotten liquidity, unmonitored forks, and unverified contracts create blind spots that bad actors exploit.
OKLink’s mission—to “connect technology with a better future”—drives continuous innovation in blockchain security. By integrating big data with deep chain analysis, the platform builds what amounts to a digital firewall for Web3.
Whether it’s detecting anomalous transactions seconds after they occur or scanning millions of tokens for hidden traps, OKLink empowers users with transparency and foresight.
And as multi-chain ecosystems expand, tools like the Risk Token Scanner will become essential—not just for profit protection, but for trust preservation in decentralized systems.
👉 Learn how advanced blockchain analytics can protect your portfolio from hidden risks.
Frequently Asked Questions (FAQ)
Q: What is ETHW?
A: ETHW (EthereumPoW) is a continuation of Ethereum’s original Proof-of-Work chain after the network transitioned to Proof-of-Stake. It maintains mining-based consensus and mirrors pre-fork Ethereum data.
Q: Why did USDT/USDC lose value on ETHW?
A: Because stablecoin issuers do not back forked versions with real-world reserves. Without dollar collateral, these tokens have no intrinsic value and are not supported by exchanges.
Q: Was this arbitrage illegal?
A: No. While ethically debated, exploiting unclaimed liquidity on a public blockchain is permitted under current norms. It highlights poor risk management by LPs rather than criminal activity.
Q: Can this happen again with future forks?
A: Yes. Any hard fork that duplicates smart contract states risks similar exploitation unless liquidity is removed or contracts are patched pre-fork.
Q: How can I protect my assets during a chain split?
A: Withdraw funds from DEX liquidity pools before a major fork. Use trusted analytics platforms to monitor for suspicious activity post-fork.
Q: Is OKLink’s Risk Token Scanner free to use?
A: Yes, core features are available free via OKLink’s blockchain explorer, with advanced alerts and multi-chain coverage in development.
Core Keywords:
ETHW, Ethereum fork arbitrage, on-chain security, liquidity pool exploit, blockchain analytics, risk token scanner, decentralized finance (DeFi), OKLink
By combining technical precision with strategic foresight, OKLink continues to lead in securing the evolving Web3 landscape—one block at a time.