Request for Comment: NPXS token reduction
NPXS token reduction is to reduce the total supply of NPXS, both the total supply and circulating supply. There is no change in the value of the new total tokens a user hold after token reduction compared to the total value of the old tokens. NPXS token economy model remains unchanged. It is deflationary and token removal will be taken place as usual after reduction.
We’d like to seek community’s collective feedback on the reduction plan by conducting a poll. Please read on the Q&A below for details. The term “Request-for-comment”, “RFC” and “temperature check” will be used interchangeably and represent the same meaning.
Q&A (10th Feb) for NPXS Token Reduction Poll
Q: What is the purpose of token reduction?
A: To reduce the total supply (including circulating supply) 1,000 times from 258,526,640,300.5699 (258 billion) to 258,526,640.3005699 (258 million) NPXS. Total amount of new NPXS held by users (units) will also be reduced accordingly after token reduction. There is no change in the value of the token one hold after token reduction.
Q: As an NPXS holder, how do I give feedback for this proposal?
A: A poll will be conducted via on-chain voting. The result of the poll is for reference only, and the management team shall reference the proposal and make its sole decision. The address for on-chain voting will be announced on this blog and across Pundi X social media channels: Twitter, Facebook, Telegram, and Reddit.
Q: How will the poll be?
A: It will be a YES/NO format. If you agree with the reduction plan, please send 1000 NPXS to the stipulated address to represent YES. If you disagree, please send 1100 NPXS to represent NO.
Other amount will represent an invalid vote and still subject to burn.
Received NPXS will be burnt after the poll is concluded.
Please note that this is NOT a shareholder voting as NPXS token is the utility token, not security. Hence there is no weighting of votes which means there is one vote per address regardless of how many NPXS the address has.
Q: Why is there a token reduction proposal?
A: It is proposed by some community members and exchanges, with positive outcome as follows:
Better XPOS support. It is easier to facilitate XPOS transactions as someone buying coffee with NPXS might prefer to pay with 10 new NPXS rather than 10,000 old NPXS.
Better DeFi support. As we are planning on DeFi support, a lower supply of tokens might be helpful for user uptake, it is somewhat similar to the “better XPOS transaction” example. There are other positive effects that might not be listed.
Better exchange support. The old NPXS has been experiencing high fluctuation due to the long decimal unit of NPXS (different from majority tokens), some exchanges have voiced that it is harder to manage NPXS, hence exchange might improve support on the new NPXS because it is more manageable.
Possible liquidity increase. While it is not guaranteed, it is possible that liquidity will increase as a result of more effective trading. The current token supply has a very big spread and price difference in pairing such as NPXS/ETH and NPXS/BTC that prevents users from participating effectively.
Possible more pairings. While it is not guaranteed, it is possible that exchanges might introduce/reintroduce more pairings such as NPXS/BTC. Previously, in Binance’s case, the NPXS/BTC pairing was agreed mutually by Binance and Pundi X to be taken down because the spread movement is too huge (each time it goes up or down one digit it is a ~X% price change).
Easier for users. It is “easier” to manage because there are currently too many decimals. For example NPXS/BTC is ~0.0000000106; NPXS/ETH is ~0.00000027508 on 5th February 2020.
Q: What are the “negative” effects of the token reduction?
A: Trouble to perform the swap. Some users will have to manually move NPXS tokens to participate.
New branding. For a while, there will be an old NPXS and the new NPXS (with a new or old name). It will also take awhile for CMC and Coin Gecko to reflect the new NPXS. There are other negative effects that might not be listed.
Q: Was there other recent token reduction examples?
A: Recently Aave executed a token reduction by 100:1 from LEND to AAVE tokens. The token reduction was very well received by AAVE community.
Q: What if we do not swap for the new token or what if we want to stay with old NPXS?
A: Users have the right to perform token reduction at a later stage. They may also choose to keep their old NPXS, as we foresee some will allow the old NPXS continue trading.
Q: What happens next after the poll is completed?
A: After the poll is completed and result is overwhelming accepted by the community, we will start the technical preparation, exchange coordination, and announcements…etc. There is nothing you need to do for now but to wait until further official announcement. We will have a comprehensive announcement before the token reduction happens so that everyone knows exactly what to do.
Q: When will token reduction take place
A: We expect to take between 4–6 weeks to finalize. Hence we are looking at March 2021.
Q: How long will the token reduction take place?
A: We plan to support it for at least a year, which means that if you’ve not been following (eg: hibernating) you will still be able to swap your old NPXS for the new NPXS for at least a year.
Q: What are secondary proposals?
A: Secondary proposals are proposals that will seek community’s feedback upon once the primary proposal is passed. The primary proposal is the token reduction plan listed above.
Q: Secondary discussion proposal A: can we keep or change the name?
A: There is an option to keep NPXS or change the name. A poll will be conducted to seek community’s feedback.
Q: Secondary discussion proposal B: can we have a staking program to encourage the ownership of the new NPXS?
A: There is an option to create a staking program of FX tokens for new NPXS holders. We will proceed with this staking program as part of the secondary discussion.
Q: Will this be a token reduction into Function X’s new mainnet?
A: No. The token reduction will be performed on the Ethereum network, which means the new NPXS will still be an ERC-20 token, which allows people to trade immediately on both exchanges and decentralized exchange platforms.
Hence, we can maintain the current liquidity in exchanges, potentially re-introducing more pairings (NPXS/BTC), as well as other effects listed above.
After the Function X mainnet is launched in 2021, there will be a swap from the Ethereum network to Function X network.
Q: Will there be an automatic process, which means users don’t need to do anything?
A: There are possible scenarios, either scenario will be well communicated on the blog, telegram, Twitter before we execute it.
- First scenario is on major exchanges and XWallet/FXWallet will auto convert the tokens and you will get the new sets of tokens automatically.
- Second scenario is at certain exchanges and your own private wallet will need to do the token reduction manually which means sending it to a Pundi X official address to facilitate this. For this, please triple check the official address on our official website, blog and across our social media channels: Twitter, Facebook, Telegram, and Reddit.
Q: Will be awarded extra tokens? Due to high TX fees on Ethereum network.
A: There will not be ETH gas refund or extra token given. However, we encourage you to participate our upcoming staking program to receive extra tokens.
Q: What happens now?
A: The on-chain poll will be initiated on February 16–22, 2021.
More Q&A (11th Feb) updates.
Q: Will this token reduction scheme dilute NPXS holders’ interest?
A: No, it will NOT dilute the holder’s interest, if you have X% token in NPXS after token reduction, you still have X% of the new token.
Q: After the token reduction, will my holding will get less?
A: The total value of the token remains the same. Only the number of tokens you are holding changes. It is because the token value of the new token after supply reduction will be increased accordingly based on the NPXS market capitalization. The company and exchanges will make sure that the token value of the new token follows NPXS market capitalization accordingly.
Q: What about old (original) NPXS?
A: We expect some decentralised protocols, such as Uniswap to continue supporting the trading of old NPXS. They are decentralized platforms. The trading continues as long as NPXS holders provide the liquidity pool and cannot be ceased immediately.
Holders should take note that NPXS will be retired after supply reduction. Both exchanges and the company will perform the swap. We will support the old NPXS for swap for at least a year after the swap begins which means that the company will support your old NPXS to New token for at least a year.
Q: Will anyone lose money?
A: Reputable and responsible exchanges that list NPXS trading pairs like Binance, Upbit, Huobi, Bithumb, Bittrex etc will be watching to ensure users’ funds are safe and secure. Pundi X team has its company’s stake in the new NPXS tokens, and the team makes sure the swap is as seamless as possible for the holders.
Q: I can’t swap when the gas fee is high.
A: The token reduction support will take at least a year, you may choose a time when the gas fees are acceptable. For tokens stored in exchanges and XWallet app, we expect the conversion to happen automatically without involving gas fees.
Q: Why can’t the team just burn 50% or more of the token supply?
A: NOT YOUR PRIVATE KEY, NOT YOUR TOKEN. We CANNOT burn tokens that do not belong to us. As of now, all NPXS token has been distributed (100%). Team has 20+% of the token, and the rest are held by the public.This 20+% of token is to incentive the team for R&D innovation, XPOS distributors & merchants and operation costs. In the worst case scenario, teams can only burn what they possess, unless the public is willing to donate their portion. Also, burning the team tokens de-incentivize the company as the company will own much less than they have..
Q: Why can’t you do it with the Function X mainnet, and swap it into Function X tokens.
A: This is an active measure to keep the strong liquidity we would like to maintain on ERC-20.
Q: Is it guaranteed that the price will go up after token reduction? We are afraid that our holding value will also be divided by 1000.
A: Yes, the token price per new NPXS will go up x1000 inline with NPXS market capitalization after the supply reduction. For example, Alice originally has 5 million original NPXS, and assume 1 original NPXS is worth $0.001, hence she has $5000 worth of original NPXS. After the swap, 1000 NPXS = 1 New token, Alice now has 5000 New token, and 1 New token worths $1. The total value of the new token is still worth $5000.
Even more Q&A (12th Feb) updates
Q: Can we burn all the original (old ) NPXS after the one swap year is over? In 2022.
A: We are required to keep them so that owners can swap even after the swap year concludes. There might be a middle ground where we lock all of the unswap original (old) NPXS in a treasury of sort after the one swap year.
Q&A (15th Feb updates) for the poll details
Q: How to participate in the token reduction poll?
A: The poll starts from 00:00:00 GMT+8 on Feb 16 to 23:59:59 on Feb 22, 2021.
If you hold NPXS in a decentralized wallet, you can send your answer to the official on-chain poll address: 0x5FbF1b79ef56910F79CBA0c70F8693Fde10B9E75. You can choose the cheapest gas fee period as the poll will be continued for at least 7 days.
Due to the high gas fee on ETH network, we offer participating the poll with ZERO gas fee for XWallet users.
If you hold NPXS in the XWallet, you can send your answer with ZERO gas fee. The poll address for XWallet users is 0x02df8180532ab300d8df1f53ee327cf99ca09a5e. However, this address is off-chain. For transparency, we will post the daily updates of the poll.
Send 1000 NPXS to the poll address to represent YES to the reduction plan. If you disagree, please send 1100 NPXS to represent NO.
All tokens in these two addresses will be burnt after the poll is completed. The execution date will be in the second week of April when we conduct the quarterly token removal for Q1 2021.
Q: How to participate in the poll if I hold NPXS in the exchanges?
A: Due to different minimum NPXS withdrawal amounts in different exchanges and they are more than 1,100 NPXS, you can choose to withdraw to your XWallet account first since using XWallet to participate in the poll does not require the gas fee.
To send NPXS to your XWallet, here is the step to get receiving address:
- Go to Wallet tab in your XWallet app
- Choose “NPXS”
- Choose “Virtual Card”
- Choose “Receive” and tap “View address” after reading the instruction.
- Copy address
How to send my answer to the poll address from my XWallet app to enjoy ZERO gas fee?
- Go to Wallet tab in your XWallet app
- Choose “NPXS”
- Choose “Virtual Card”
- Choose “Transfer” and input the poll address for XWallet user: 0x02df8180532ab300d8df1f53ee327cf99ca09a5e
- Input the amount. “1,000” represents “Yes to the reduction plan” or “1,100” represents “No to the reduction plan”
What are the invalid answers to the poll?
- The type of the token is not NPXS
- The amount of NPXS sent to the poll addresses is not 1,000, nor 1,100.
- One address / one account sent multiple times and answers. Only the first one counts.
- The transactions happen outside the poll period.
For the above situations, we won’t be able to return your tokens sent by mistakes as all the NPXS sent to these poll addresses will be burnt. Please double check the amount before sending NPXS to the poll addresses.
When to announce the poll result?
The poll result will be announced at 16:00 GMT+8 on Feb 23, 2021.
During the poll period, you can check the latest result as follows:
The on-chain poll address: https://etherscan.io/address/0x5FbF1b79ef56910F79CBA0c70F8693Fde10B9E75
The XWallet poll will be posted daily here below in a screenshot format since the “0x” address is used for off-chain transactions; hence it’s ZERO gas fee.
The screenshots were taken from XWallet poll wallet in the Indonesian time zone (GMT+7).
From 00:00:00 GMT+8 on Feb 16 to 22:24:00 GMT+8 on Feb 16, we have received a total of 50 entries with. 40 choosing YES to the reduction plan and 10 choosing NO.
Screenshots of transaction history of the poll from 22:25:00 GMT+8 on Feb 16 to 22:31:00 GMT+8 on Feb 17. During this period of time, we have received a total of 105 entries with 92 choosing YES to the reduction plan, 12 choosing NO, and 1 entry is invalid.
Among them, we found 7 entries for YES and 1 entry for NO are duplicate entries. These entries are invalid and will be removed from the final result.
As of Feb 17, there are 125 valid entries for YES and 21 for NO from XWallet.
Screenshots of transaction history of the poll from 22:30:00 GMT+8 on Feb 17 to 21:44:00 GMT+8 on Feb 18. During this period of time, we have received a total of 34 entries with 33 choosing YES to the reduction plan and 1 choosing NO.
As of Feb 18, there are 158 valid entries for YES and 22 for NO from XWallet.
Screenshots of transaction history of the poll from 21:45:00 GMT+8 on Feb 18 to 21:35:00 GMT+8 on Feb 19. During this period of time, we have received a total of 16 entries with 13 choosing YES to the reduction plan, 1 choosing NO, and 2 invalid entries (including 1 duplicate entry for YES).
As of Feb 19, there are 171 valid entries for YES and 23 for NO from XWallet.
Screenshots of transaction history of the poll from 21:36:00 GMT+8 on Feb 19 to 21:48:00 GMT+8 on Feb 20. During this period of time, we have received a total of 6 entries with choosing YES to the reduction plan.
As of Feb 20, there are 177 valid entries for YES and 23 for NO from XWallet.
Screenshots of transaction history of the poll from 21:48:00 GMT+8 on Feb 20 to 21:39:00 GMT+8 on Feb 21. During this period of time, we have received a total of 8 entries with choosing YES to the reduction plan.
As of Feb 21, there are。185 valid entries for YES and 23 for NO from XWallet.
Screenshots of transaction history of the poll from 21:40:00 GMT+8 on Feb 21 to 23:59:59 GMT+8 on Feb 22. During this period of time, we have received a total of 4 entries with choosing YES to the reduction plan.
The result: 189 valid entries for YES and 23 for NO from XWallet.
When will the team decide whether or not to execute the token reduction plan?
The team will make a decision before Feb 26, 2021.