We will soon be launching the long-awaited SPF token. Our team has already shared the tokenomics, launch strategy and more. Today we would like to talk more about the SPF token sale on the ErgoPad platform.
Currently, this is the most suitable option for the early transfer of the SPF token on the Ergo blockchain. However, it has become clear that this way creates some difficulties over time.
Spectrum Labs is registered in the Panama jurisdiction. US legislation and regulation impact the Panama jurisdiction. OFAC (Office of Foreign Assets Control) may chase the team with fines. A fine for one user from an OFAC-sanctioned country could be as much as $60,000. Our legal team strongly recommended holding a token sale with KYC to avoid this potential outcome.
Our team is a believer in the basic values of the crypto community and the Ergo Manifesto, so we don’t take this decision lightly.
Our product will always be decentralized and will not include KYC. This applies to both Spectrum Finance and Spectrum Network. KYC is considered here only in the context of the sale on ErgoPad.
But even with this in mind, the idea of introducing KYC for a token sale didn’t please us, so we turned to our community and partners to find out their opinion and possible alternatives.
You can check out the progress of the community chat here. Below is a summary of the main feedback we received.
We noticed that some people are ready to participate in the token sale with KYC, but at the same time, many users are totally against it. The main requirement of the second part of the community is complete transparency and understanding of how the data collection is organised, which parties are involved and how the process will work.
The main KYC alternative proposals were INO (Initial NFT Offering) and FIMO (Fair Initial Mining Offering). Unfortunately, The FIMO option can no longer be used, as the GetBlok team has put the project on hold due to greater market conditions. Also based on consultation with the GetBlok team, we understand that developing our own solution using their open-source code will require significant resources from the development team.
Summing up, we have made the following decision: for community members who are ready to go through the KYC procedure, we will launch IDO on ErgoPAD with KYC. We now assume that the launch of IDO will take place in January 2023. All other subsequent launch events will be implemented after that. The Spectrum Finance team is now considering INO as one of the alternatives. We are also working on other potential solutions that will satisfy everyone, but it will take some time.
IDO on ErgoPad (Initial DEX Offering)
How we will collect data and where to transfer it + where will it be stored:
KYC and data storage will be done by a trusted third-party service called Sum and Substance.
How will the KYC process be organized?
The third-party service will store users’ data. Spectrum Labs can read country from this data to decide whether a user is eligible for participation or not.
What countries are gonna be prohibited from the KYC process?
Preliminary list of countries whose citizens will NOT be allowed to join the token sale:
Iran, North Korea, Syria, Sudan, Cuba, Venezuela, Crimea, Sevastopol, Afghanistan, Yemen, Somalia, Zimbabwe, Nicaragua, Mali, Libya, Lebanon, Iraq, Central African Republic, Congo, Burundi, South Sudan, Kosovo, Artsakh, Northern Cyprus, Abkhazia, Transnistria, the Sahrawi Republic, Russian Federation, Ukraine, and USA.
INO (Initial NFT Offering)
At the moment, INO is one of the proposed options of the initial token distribution.
INO is based on the same principle as IDO, but differs in that the launchpad does not offer tokens, but non-fungible tokens (NFTs), which will have a value in SPF tokens. You can think about INO like about NFT collection sale. But those NFTs can have a certain utility across the platform that helps users extract more SPF from the protocol (e.g., increase of Yield Farming APR or any other utility).
We will tell you later how exactly this will work and in what time frame.
Summing up, we thank every community member who was involved in the community chat and generally tried to help us make the most transparent and optimal decision. We hope that you treat such a complex decision with understanding and that together we can build an entire network that does not depend on third-party factors, regulators, and circumstances.
Spectrum Finance Team 💜