Just to refresh the memories of token holders or for people who were not involved in the original AICoin offering, there are issues that token holders will visit from time to time. One of these issues is what to do with new profits that are generated by Wintermute’s trading activity. When it looked like Wintermute would shortly achieve new profits, we decided to initiate a new ballot to discuss this. Since it was announced, token holders have been talking on the Telegram and SLACK channel. Several suggestions have come about because of these discussions. In response, we are adding some items to next week’s upcoming vote.
Vote 1. How should new equity high profits be distributed?
Option 1. Unchanged. The present way profits are handled is that we put 50% of new profits into the Investment Pool. This is earmarked for investment in early stage companies and running costs for the company. 40% is left in the Coin Pool which scales up the amount of money Wintermute has to put into token trading.
Option 2. Forty percent (40%) is left in the Coin Pool. Twenty percent (20%) will be paid out as an ETH airdrop*. Twenty percent (20%) will be used to purchase XAI in a reverse auction. Ten percent (10%) will go into the Investment Pool.
Option 3. Forty percent (40%) is left in the Coin Pool. Twenty percent (20%) will be paid out as an ETH airdrop. Thirty percent (30%) will go into the Investment Pool.
Option 4. Forty percent (40%) is left in the Coin Pool. Twenty percent (20%) will be used to purchase XAI in a reverse auction. Thirty percent (30%) will go into the Investment Pool.
Since the ballot was announced at the beginning of May the profits recently generated by Wintermute would be subject to the new rules established as a result of the June 2019 vote. These took place on the 24th May and 31st.
Vote 2. How should the purchase of XAI (by the AICoin entity) be handled?
Option 1. Keep the current process. All XAI purchased will be offered for sale at 5% over NAV.
Option 2. Lock the purchased XAI. This means they will not be offered for sale and will remain owned by the Investment Pool. They may only be released after a further vote where the Collective chooses to release them. This would take place if the market moves to a significant premium over NAV. Then we will create a ballot giving an option to the Collective asking for us to be permitted to distribute some or all of the tokens, perhaps through a secondary ICO/Auction.
Option 3. Burn any purchased tokens. However, on a technical note – The XAI token was not written allowing a ‘Burn Function’. This means that we would simulate a ‘Burn Function’ by sending them to an address without a known private key which would mean they could never be accessed. This has a number of technical drawbacks:
1. The number of coins in circulation on the contract (visible on the blockchain) would still be stated as 77,285,926.80687116. This will make it impossible to verify the NAV in a genuinely trustless manner in the future.
2. There’s no way to guarantee that the private key for the address is genuinely not known.
For these reasons we strongly recommend the Collective not opt for option 3 – it is being included because token holders have made a specific request that it be included in the ballot.
If an airdrop is due we will announce a block that will be the reference block for the airdrop. We will distribute ETH to the ETH blockchain addresses that were holding XAI on the designated reference block.
The approach taken will be as follows. The funds allocated for the airdrop will be converted into ETH. The conversion rate will be the average market price achieved while converting the funds into ETH.
Every address holding a XAI Balance will be assigned a credit based on the formula:
TOTAL_ETH_ASSIGNED/ 77,285,926.80687116 * XAI_BALANCE
If the value of the ETH assigned is less than $1.50 at the time of the distribution then the credit will be assigned to the address but no ETH will be airdropped into that address. Any address where the value of ETH is greater or equal to $1.50 will receive the ETH as an airdrop.
If the balance is less than $1.50 then the credit will remain attached to the address and will continue to receive airdrop credits with subsequent distributions. When the value of the airdrop exceeds $1.50 then the airdrop will be made on that distribution.
Airdrop distributions will be published in a blog with a downloadable spreadsheet. It is your responsibility to check that any address you have holding XAI is included in the distribution. You must inform us within 7 days if the process has not identified your XAI address and assigned it the correct airdrop credit. After 7 days the airdrop will be finalised and executed and no adjustments for errors can be made after this time.
If you are holding your XAI in an online or offline ETH address where you hold the private key then you need to take no further action to receive the ETH airdrop.
If you are holding your XAI on the AICoin dashboard you will need to take no further action. The airdrop will be made to your ETH dashboard address automatically. If you have not assigned an ETH dashboard address previously one will be automatically generated.
If you are holding XAI on the Panxora exchange you will need to take no further action. The airdrop will be assigned to your account as an ETH balance.
If you are holding a short position in XAI we recommend you cover this position ahead of the reference block. Any short positions held on the reference block will have their account debited with airdrop amount of ETH which will be credited to the lender of the XAI (for the purpose of the short sale).
If you are holding XAI on another exchange or on a wallet where you don’t have the private key then you must speak to their support team about how the Airdrop will be processed. If you are unsure we recommend you take the funds into your own wallet address before the Airdrop reference block.
- REVERSE AUCTION
You will need to be KYC approved for the reverse auction.
- You will be able to offer any of your XAI on the dashboard or on the Panxora exchange for sale in the auction. You will not be able to offer XAI that are held in your commission wallet.
- You can have as many offers in the auction as you wish at different price levels. Any XAI offered in the auction will not be available for trading or available for withdrawal.
- All Auction offers will be secret. When the auction takes place it will only include offers made on the auction. It will not include orders that are placed on the regular Panxora exchange order book or the AICoin dashboard order book.
The auction sweep will not pay more than 5% below the NAV of the token at the time the auction takes place.
- The Auction will take place using the XAIBTC price and all settlement for sales will be in BTC. The amount of BTC available for purchase of XAI will be included as part of the auction announcement.
- You will be able to enter and delete offers on the auction for a 5 day period following the announcement. Once the cutoff period has been reached, auction offers cannot be added or deleted.
- When the settlement price has been determined it will be announced on the Panxora exchange and on the Dashboard. Settlement will be made in BTC onto your BTC address on the AICoin dashboard for all dashboard auction offers and into your Panxora BTC balance for auction offers from the Panxora exchange.
To see how the auction works please view this post.
If there are insufficient offers to cover the purchase volume then the remaining BTC will drop back into the Investment Pool and be used for investment purposes.