We’ve been asked by a few people to explain why the Ethertote team are choosing to remain anonymous (at least for now) and this is a perfectly valid question which I’d like to take this opportunity expand upon.
There are three main reasons why we are currently choosing to remain anonymous:
- TOTE Token Classification
- Ethertote game classification
- Regulation
Allow me to expand on each reason…
Token Classification
As many of you will be aware, there are lots of discussions going on at the moment in the crypto world regarding token classification. Generally speaking, the vast majority of ERC20 tokens fall into two main categories. Security tokens and Utility tokens. This classification has a huge impact on the way that tokens (and holders of said tokens) are impacted.
Security tokens
Security tokens are usually classified as crypto tokens issued to investors in a token sale or ICO for the exchange of money. Crypto tokens that pay interest, share profits, offer dividends or invest in other tokens or assets to generate profits for the token holders are deemed as ‘security tokens’.
Currently, such tokens are prohibited in countries like the US and are subject to the same federal regulations that are imposed on public listed companies.
Utility tokens
Utility tokens are not subject to these stringent federal regulations. These types of tokens generally must have some utility in the decentralised application that a team is building and raising an ICO or token sale for.
Here is a write-up on the subject if you’d like to read more:
https://cointelegraph.com/news/legitimising-the-ico-token-finding-utility-over-security
So what are TOTE tokens?
We strongly believe that TOTE tokens can be classified as Utility tokens. They are integral to our DApp in such a way that only TOTE token holders can trade on the Ethertote during the “extended traded” period. If you don’t have TOTE tokens, you cannot trade during this period. This is not just a simple “front-end” validation on the website, this is actual core code built into the smart contracts that power the EtherTote smart-contract ecosystem. The contracts themselves reference the original TOTE token smart contract so there is no way of getting round this.
We should also state that we do not share interest in company profits, we do not offer voting rights, we do not provide share dividends, and we do not require the sale of tokens to generate profits, as players can still trade on the Ethertote without tokens.
What about the Token Holder Claim fund? Isn’t that a dividend?
We admit that at first glance, it does sound a bit like a dividend, but we need to be clear that we strongly believe that the Token Holder Claim fund should NOT be categorised as a dividend. A dividend represents a share in profits of a company that is distributed back to share/token holders. The EtherTote Token Holder Claim fund differs from a traditional dividend, because the Eth stored in this smart contract is derived DIRECTLY from the games played on the Ethertote and can be seen as 5% of winnings from the game. The key distinction here is that the Eth raised from the Ethertote game does not first of all get sent to the Ethertote team, which we then decide to share amongst token holders. If that were the case, then we could theoretically adjust the dividend rate, we could choose to suspend or even remove the dividend altogether if we wanted. With our Token Holder Claim fund, we cannot do this, because it is built into the logic of the smart contract, and we cannot alter it. We simply cannot affect it. We will breakdown the inner-workings of the Token Holder Claim smart contract in another posting to explain exactly how and why it cannot be amended, even by our own team.
As well as this, you also require TOTE tokens to interact with our “historic data” section of the DApp. If you don’t have TOTE tokens, then this section of the website will be unavailable to you.
It is for these reasons that we strongly believe that our token should be classified as a utility token, and we are currently in private discussions with various parties in an attempt to gain “official” classification as a utility token.
Ethertote game classification
Depending on where you reside in the world, the exact way you interact with any game or platform, where there is an opportunity to win money or crypto, will ultimately determine whether or not you would be expected to pay tax on any profits made.
For example, “skill-based” games are treated very differently to “betting”, even though both might return a similar type of reward or “prize”.
Some would argue that interacting with the Ethertote is betting. You place trades on a crypto, and if you win, you make more Eth than what you started with. Others would argue that this is very much skill-based. After all, if you were to just randomly select crypto’s from the EtherTote without any form of research or analysis, then most likely you will lose more often than you win.
So what elements of skill are involved in playing on the Ethertote?
Timing for one thing. The time at which you trade on the Ethertote can have a significant impact on the ultimate outcome. If you trade early, you will have a long wait to see if your selection proved fruitful. If you trade too late, the crypto might become “locked” (maximum 1000 trades on any one crypto, regardless of trade size) and you won’t be able to make the selection you desire. Perhaps you want to watch market “sentiment” to see what other players are selecting. Maybe you are waiting for a news report on a particular crypto that is about to transition to main-net, so see how that impacts the price. Perhaps you study the charts, and are expecting a breakout. There are many things to consider.
Once again, we are in private discussions as to exactly how the Ethertote should be classified and how this impacts ourselves and the Ethertote players.
Regulation
This is a broader topic that not only impacts our team, but all of the wider crypto community. There are a lot of government and political discussions surrounding crypto and these discussions and news reports impact price movement, public sentiment and how people look to interact with or invest in crypto-currencies in general. We are monitoring these developments extremely closely and this is another reason why are currently choosing to remain anonymous at this time.
However, whilst our personal identities are not being disclosed, we as a team absolutely insist that the Ethertote DApp is fully transparent. Every single smart-contract that forms part of the EtherTote ecosystem (and there are over 70 of them!) will be made public, both on our GitHub page and through code verification on Etherscan.
… but that is still not enough for us.
We are first and foremost lovers of Ethereum, Eth, Solidity, smart contracts, and blockchain in general. We think Vitalik Buterin is a bit of a legend, and most people still don’ttruly appreciate what he and his team have actually developed and brought to market, but we are going to play our part in promoting Ethereum and block chain as much as we possibly can.
To begin with, we are going to break down every smart contract we deploy. We don’t just want solidity programming experts to understand what our smart contracts are actually doing. We want everyone to understand! We will be releasing a series of posts over the coming weeks, that really breaks down the contracts line-by-line, so people can really understand what they do and how they interact with the other smart-contracts on the platform.
100% smart-contract transparency.
We will also make a point of highlighting the smart contract addresses and wallets associated with EtherTote.
You can even view our own personal team wallet here to see where our Eth comes from and where it goes.
You can see exactly how our TeamEth and TeamTokens smart contracts are time-locked and how we will withdraw Eth and tokens from them. You can see what we are investing the Eth raised from the Token sale on. You can can see how a lot of it will go back onto the Ethertote itself as each and every crypto smart contract has a public address that you can view on Etherscan.
We really want everyone to fully understand how the platform works, and what is going on under the hood.
We also of course encourage questions on our Telegram page for people who want to learn more. Not just about EtherTote, but about Ethereum and Smart Contracts and solidity.
