Losing Money In EOS Token Swap or Indian Demonetization of Fiat? Any Difference?
Demoentization by Indian Government
In November, 2016; Indian government declared the higher (500/- & 1000/-) denomination currency bills issued by its own central bank as illegal and offered it to replace by new bills if deposited within next 50 days. This constitutes over 86% of the total currency in circulation at that time.
Indian economy is a cash-based economy and over 95% of transactions are carried out in cash. So declaring INR 15.44 lakh crore (1 lakh crore = 1 trillion) money as illegal overnight shocked its 1.25 billion citizens.
It turned INR 160 billion with people to dust
In the following 50 days, a whopping 15.28 lakh crore INR (about 99% of the total circulating supply) were deposited and exchanged for the new currency. But there was no relief to the ones who couldn’t deposit their money in this stipulated time frame. Thus 16,000 crore rupees (INR 160 billion) which is still in circulation and held by its citizens has turned into a waste-paper now.
I know of several NRIs and foreigners, who held some of this currency notes but couldn’t visit the country within the prescribed time frame to exchange their money (though they were given three months of extra time than the native citizens).
Aside this, a vast share of this demonetized currency is expected to be circulation in India’s neighbouring countries. In Bhutan and Nepal, Indian currency is used more often than not as a valid currency. In fact, Indian currency is sometimes preferred over their national currency for cash transactions. So many people there are expected to be holding these now worthless pieces of paper.
I’m appalled with the unsympathetic government who is adamant to provide no recourse to such suffering people. This tendency of the government has compelled many people (like me) to embrace the blockchain model. Buttt....
Is EOS token swap doing the same?
With about 1 billion EOS tokens in circulation even before its Mainnet launched, the market valuation of all EOS tokens is currently about 15 billion US dollars. The EOS / Block One issued ERC-20 tokens on Ethereum blockchain before the launch of its own blockchain. Now that their own blockchain software is ready, they had declared June 1st, 2018 as deadline to register all ERC-20 tokens so that they can be swapped for new EOS tokens on its own blockchain.
A week before the deadline, only 35% to 45% EOS users have registered their tokens for the swap (according to different sources – 1, 2 ). But surprisingly, a day before the deadline, I heard that about 98% of tokens were registered by EOSIO.
Latest stats on one of their Block Producer EOS Authority’s website tells us that 98.8% EOS tokens were registered.
But I’m concerned for every single token that couldn’t get registered. Will that be locked out and be a worthless investment to its holder because he / she couldn’t register it in time?
Today, I asked it in Telegram group and got some positive answer:
Fallback registration for unregistered tokens
Fortunately they could come up with a Fallback registration idea.
Jimmy Calfee and Sean Mitchell managed to convert an Ethereum Public Key into an EOS Public Key. So many accounts that didn’t registered can now possibly get their EOS tokens with an additional step. You can check this guide to generate your Fallback EOS key based on your Ethereum private key.
Unfortunately, Fallback doesn’t work on 100% of the unregistered tokens. Ethereum public keys are only on-chain if an address has an outgoing transaction. Not all addresses have outgoing transactions. So those addresses don’t have any recourse as of now.
Current Status
Current stats for supply registration is as follows:
Registered (incl fallback): 996,690,678.8329 EOS (99.7%)
Unregistered: 3,301,220.3641 EOS (0.3%)
Does this mean about 0.3% tokens are going to be lost forever? It’s about $50 million worth of tokens!
I’m keen to know how they rescue their users from these $50 million funds, which are at a risk of being locked up forever.
Not invested in EOS yet :/
It kinda sounds weird that there is only a small timeframe in both Indian demonetization and EOS coin swap. I do get that they wanna have a deadline for it but this timeframe should be much bigger. Or at least there should be an other option for people which can prove that they weren't able to change it in time.
Further I really have to say, without wanting to insinuate something, the registration of 98.8% sounds to high for me. As I heard of this swap I though it will be much more since many people with literally no clue about the crypto market are involved in it at the moment.
Happy to hear they are planning a fallback registration!
Yes, fallback mechanism is some relief for sure.
Let me start this off by saying that I admit what I did here was dumb, though in this case I didn't lose a ton of money (less than $100 in ETH... but still, it sucks). Either way, this has deterred me from ever participating in another ICO. I'm a US citizen and I bought some tokens on ICO from a project that looked great from my own due diligence, and had gotten some great write-ups from consistently reliable reviewers. The founders told us that they were on the verge of getting an exemption for US citizens for KYC and that if we weren't able to complete KYC that our ETH would be refunded. Well, we're months after the tokens were supposed to be released, and I'm getting emails every day telling me I won't be able to get my tokens until I complete KYC, and there's still no US exemption. I emailed them politely saying I wouldn't be able to complete KYC and that I would like the ETH refunded, and I get a response telling me that they won't refund anything, and that my tokens will be sitting there waiting for me when I can complete KYC (because the exemption is still coming), which is as good as worthless for us in the US. I'm going to wait this out for a bit, and if nothing else, I'll give my account to someone I trust who isn't a US citizen and can get it out for me. Not going to explicitly put them on blast here because I don't want to screw up my chances of being able to do that. The lesson I've learned here is to not participate in ICOs as a US citizen unless they've already gotten their exemption, because you can't rely on crypto companies, even ones with great reputations, to refund you because they haven't been able to deliver on what they promised.
It's sad that they are not refunding you in spite of promising to refund in the eventuality of your inability to complete the KYC. However, I ain't aware of such a commitment or stand by EOS, but if it was made then it's not short of a fraud. Whether it's $100 or $100000, the value of the money depends more on the individual than just on its denomination. Every single penny of the investor needs to be refunded if they can't give you the committed tokens for what so ever reasons.
Bro! demonetization was the biggest mistake of present government. It was a disaster for India. It not only forced people to stand in lines but also halted the process of economic growth. This thing is also repeated with EOS. This will be a disaster for its token holders.
Yes, it's a disaster when common man suffers because of improper planning.
I agree here :)
Demonetization was a disaster for India agreed
but EOS is not comparable
Demonetization incurred a loss of Rs. 16,000 crores by turning the RBI issued promissory notes into mere paper. EOS is turning about $50 million worth (over INR 300 crores) of tokens into junk.
I can understand in what respect you think that these are not comparable. But I sure want to draw comparisons on the above stated ground. Thanks for you opinion on it!
I do not agree with you.
Thanks for your reply anyhow
What's the home loan rates before and after demonetization. How many explosions india had in 4 yrs. I lost quite a bit of money in surgical strikes and demonetization. Totally worth it.
It's understandable that as an individual, you may not bother losing money on something but that's not true with everyone. This cannot be an excuse of riding on common man's money.
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Greetings from #EOSVenezuela
IDK I still haven't gotten into EOS, and I am planning to keep it that way
I hope EOS token swap will not end up having same effect.
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