Earlier this year, just after the initial distribution of $SHOP tokens, Shopin informed its community regarding a the hack of a major Japanese syndicate’s wallet containing over 81MM tokens, representing over 10% of the total distributed tokens in our TGE.
Eran Eyal, Founder and Co-CEO at Shopin intimates:
“Although traditionally in the world of crypto, people would walk away exclaiming: “You’re your own bank, it’s your problem”, we looked at the issue through a different set of lenses:
1. The moral turpitude of abandoning over 3,000 Japanese participants who would lose their funds to a criminal due to one person’s negligence
2. The burning of Shopin’s name in an important market
3. The forethought that the hacker would dump the tokens on decentralized exchanges, thereby disenfranchising the Shopin project as well as all its participants
4. We were not listed on any centralized exchanges”
Sure enough, I was right and the hacker tried to dump the tokens on Idex and ForkDelta/ Etherdelta.
Shopin was able to contact the exchanges and shut down all activity before irreparable harm occurred and to pursued a 1:1 tokenswap to $SHOPIN tokens, however not swapping the hacker’s tokens. Instead the Japanese participants would get their assets.
It was a bold move to thwart a criminal, aid the cause of justice and protect the long-term view of our project.
Failed audit
In the last couple of months Shopin’s management team severed ties with all employees and contractors who had worked on the $SHOP and $SHOPIN token contracts.
We reached out to Blockwell (You may recall that Josh, who did our Github audit for Quoine/ Liquid and who does a lot of blockchain auditing work for exchanges around the globe) to audit the contract code for $SHOPIN, to find that the contract had been altered after his last audit and that the altered contract did not pass his audit.
Reissue with new functionality
Blockwell has joined forces with Shopin in to help reissue the Shopin contract with new functionality and a trusted codebase. We set out to build an amazing AI product that serves the retail market and had gaps in the Blockchain side we tried to fill with partners. Some of those partners did not work out quite as well as we hoped, as you have noticed.
Blockwell and its management have significant experience in the space and a working product. We knew from how we were introduced and interacting with the team that by working with them we’d get the job done right this time. The past is the past, but we’re excited about the future here at Shopin.
— Eran Eyal, Founder & Co-CEO Shopin
Read on for details from Josh, founder of Blockwell:
What’s the current status?
Our team have completed the code and the token is ready to launch. We have been working closely with all the major TGE participant groups finalizing “Bundlers” before pushing to Mainnet. A successful test has already been completed with a complicated and large syndicate, which you can see here:
https://rinkeby.etherscan.io/tx/0xb885cace24a12af5baf4d05f346ae6d96f63fe79fd380616c3ef364681467505
How do the bundlers for syndicates work?
Blockwell’s team have put together a great instructional video for us.
What do I need to do?
- If you are part of a group, push your point of contact to get in touch or respond to emails
- If you’re leading a group, signup to this form: https://tinyurl.com/shopin-groups
- If you’re an individual, direct participant, or you managed to acquire on IDEX/etc fill out the same form and just note how you acquired the token in the last section
- If you are no longer involved with your group or point of contact or need assistance please email eric@blockwell.ai with your details
For Bundlers:
If you are doing a distribution, please use this spreadsheet to format and test your distribution on Rinkeby. https://docs.google.com/spreadsheets/d/1hpUjeyXQfQouxrL-ZHsUBniEw_o-QbAVXDYIKvOxdOc/edit#gid=0
- Simply “Make a Copy”,
- Replace the highlighted addresses in Column A with your member addresses and Column B with the amount of tokens your members are owed. If you only have a wallet on Etherscan where the SHOP tokens live from all your members provide that to Blockwell and they will generate a csv and add it to a copy of this form for you.
- From there simply follow the steps listed in Column E. Column F contains pre-formatted addresses and tokens converted into wei for you to paste into the smart contract interface.
- On both MEW and MyCrypto this is a two step process.
- Step1: First you add the contract address and ABI and click “Access”,
- Step2: Select the appropriate function. As you can see, there are a lot of Bells and Whistles to the soon to be launched Shopin Token so make sure you select the correct method (multiTransferFrom).
When going to MyEtherWallet or MyCrypto also make sure to select Rinkeby as shown in the screenshots included with the spreadsheet. Note: Users that have not been manually added by Blockwell as a bundler will need to submit a wallet via the form below or wait for notification that they are set up to test their distribution.
We were hoping to also have an automated demo process via sheets by time of posting where non-bundling users could see the new Shopin token in action on the Rinkeby testnet. This isn’t essential to the delivery of the swap but the idea is it’d be a nice touch to show you what your patience is delivering and let competent members have the tools to educate leaders.
What is Rinkeby exactly?
Rinkeby is a “testnet” or a demonstration Blockchain. It’s powered by “Proof of Authority” rather than Proof of Work which means transactions are signed by the host of the Blockchain (in this case the Ethereum org) so no Ether is mined directly. Ethereum uses Rinkeby as a playground or experimental testnet. Tokens on Rinkeby are not tradable but you can see how the token operates, experiment with ideas without cost, and have your transactions confirm far more rapidly.
Do I need to send tokens back again?
No, they will remain locked. Both deprecated token contract addresses will be filed with exchanges as dead tokens. You can just delete that contract address from your mew/wallets watch token listing.
Once we are confident that this process is going to result in group members getting their tokens successfully we will launch the mainnet Shopin Token and put the new contract address in our next Medium post. See the schedule section for more details.
Why the lockups?
- As a passionate observer of the space I noticed lockup changes for US entities starting to become the trend this summer, pretty much across the board. Most Organizations we’ve dealt with since July that have a US domicile have been insistent on lockup (either onchain or custodial managed) due to the lockup requirements of several of the key asset trading laws which we wholeheartedly agree with.
- Without speaking for Shopin directly, most competent US attorneys advise lockup currently irregardless of the utility of your token as the SEC clarifies its position. This is an evolving sector and there’s a big gap in regulator expectations given the difficulty of getting a no action letter or formal response. I’m sure after we get through this delivery and the team has additional insights there will be more details shared.
- Blockwell as a platform has a strict policy that any token involved in our system has an attorney registered onchain with a cold wallet secured by their firm that can unlock the token and use additional compliance related controls. Rather than trying to be everything to everyone and billing ourselves as an issuance platform, we mix proven real world solutions with smart contracts and let the lawyers do the lawyering.
- Blockwell is Android Studio or JetBrains with a community and thought leadership. We’re a software tool, we do not facilitate fundraising in any matter, advise on compliance, or tell our users how to use the consensus managed database entries that we all call tokens. That’s on the business and their counsel. Blockwell’s role is to make sure Shopin and others have the tools needed to make good faith efforts in their jurisdiction under whatever working rules have been developed.
What next for Shopin?
We’re Blockwell, a tokenization product designed for real businesses to engage with the new economy of tokens and give those tokens actual utility.
We can’t speak for Shopin other than to say that our review of their ML tech was legitimate, and there are interesting advancements there in fashion related computer vision and e-commerce. Much of that is synergistic with token curation, network fulfillment, staking for accuracy, etc.
Georgi is a competent CTO with significant domain expertise who has been working hard to build a top tier product. I know this space well enough to know the difficulty involved in what Shopin has already built.
What’s the schedule?
Our goal is to handle this quickly and efficiently so many of you can see your tokens the day the post drops. To some extent we are beholden to outside parties i.e. group leaders. Thank you to those who have been very co-operative and responsive.
We have the submitted KYC info as well as data on every transaction submitted with the $SHOP/ $SHOPIN tokens thanks to our token forensic software.
Blockwell also have a demonstrably functional token that can distribute en masse.
The only hold ups are:
- Knowing which of those wallets belong to which group so we can give group leaders tools to distribute to you the moment the tokens are live.
- Meetings with 3–5 more groups to walk them through the process and ensure this is final, all angles are accounted for, and everybody is made whole.
- We have a high quality bar at Blockwell and we’re approaching this with the diligence and care it deserves. I intend for this to be a breath of fresh air for you, the readers, and a fresh start on solid ground for the Shopin Token as a whole.
Thank you for your support and patience as we assist our friends and partners at Shopin who are working tirelessly to drive the future of retail and the success of the Shopin project.
Regards,
Josh - Founder, Blockwell
