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KuCoin’s Lyu: The Merge’s value is ‘difficult to overestimate’ but beware technical risks

By Daniela Ešnerová

13:47, 14 September 2022

Johnny Lyu, CEO of KuCoin Exchange
KuCoin Exchange CEO Johnny Lyu – Photo: KuCoin

There is no shortage of hype surrounding the upcoming network upgrade of Ethereum (ETH), with parties popping up that are dedicated to watching the event unfold and the launch of a Google (GOOG) countdown to mark the occasion.

But Johnny Lyu, founder and chief executive officer of the cryptocurrency exchange KuCoin (KSC), has told that The Merge’s value for the industry is “difficult to overestimate”.

Lyu also warned that “not everything may go smoothly” as he referenced the unexpected technical issues that have accompanied Ethereum’s network updates in the past.

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ETH to US dollar

Ethereum can expect a surge in popularity

With The Merge’s final step just around the corner, Lyu foresees decentralised finance (DeFi) developers flocking to Ethereum as a result of the update’s anticipated improvements.

“The final stage of The Merge is expected to finally solve the problem of scaling and transaction speed. As a result, we can expect a surge in the popularity of Ethereum among DeFi application creators, who have recently massively favoured competing networks, such as Solana (SOL), Polkadot (DOT) or Polygon (MATIC),” Lyu predicted.


0.12 Price
-6.920% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872


3,135.55 Price
-7.630% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00


169.36 Price
-7.160% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652


0.60 Price
-4.210% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

“It is also difficult to overestimate the value of the update for the development of the entire blockchain industry in general and technologies such as Web3 in particular. The transition to Ethereum 2.0 may bring new opportunities for the creation of new applications for which the speed of transactions is important.”

KCS to US dollar

But KuCoin’s CEO also warned of potential technical issues. “The Ethereum network updates have repeatedly been accompanied by unexpected technical problems, and this time not everything may go smoothly,” he said.

Ethereum blockchain’s transition from a proof-of-work (PoW) operation to a less energy-intensive proof-of-stake (PoS) system can be traced back to 1 December 2020 with the launch of Beacon Chain, but it has been hit with several delays on the way.

Markets in this article

Ethereum / USD
3135.55 USD
-257.47 -7.630%
Polkadot / USD
5.7085 USD
-0.183 -3.150%
0.51248 USD
-0.0404 -7.650%
Solana / USD
169.3613 USD
-12.8937 -7.160%
Alphabet Inc - C (Extended Hours)
171.66 USD
-3.86 -2.210%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

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