A Streamlined Token for a Decentralized Network
A ballot will open on a proposed upgrade to the SWM token. This upgrade would involve replacing the existing SWM token with a new — and better — SWM token.
Most token holders will need to do nothing to benefit from the token upgrade. If the ballot passes, on August 30th 2019 the existing SWM tokens in your wallet will be replaced 1-for-1 with new, upgraded SWM tokens, with no action required from you. The new contract will be much lighter, safer, and take advantage of the increased maturity of Ethereum in the two years since SWM launched.
The main reasons for making this upgrade are:
- The existing contract is more complex than typical ERC20 contracts because it contains rich features which are no longer needed, and some that could post future risk to the project.
- Reducing the weight or “cleaning up” the token contract will make it easier to integrate into wallets, exchanges, and other financial infrastructure with reduced gas needed for transactions.
- The new contract is fixing the supply of SWM tokens to 100M SWM, with no ability to mint new tokens, which provides long term predictability and trust in the economic model of the SWARM network.
A detailed look at the changes and their benefits
Heavy contracts limit scalability
Each time an ERC20 token is sent, gas fees are paid to support the Ethereum network. The heavier the token contract, the higher the fees. For integration into wallets and exchanges, having a heavier than average contract typically means manual integration or the need for custom settings, which some platforms have had a hard time implementing, and which has held SWM back.
So why was it so heavy?
The current SWM contract contains a richer set of features than the average ERC20 token. This includes functionality like a drip liquidity release (vesting) for tokens, a feature which was used in the first year after SWM was launched, but is no longer needed today.
When the SWM token was issued, in collaboration with TokenSoft, the project chose a Token Factory smart contract with a multitude of functional capabilities. In the original white paper, the project had provided for the opportunity to mint additional SWM tokens in the future, a feature the community voted against and which is no longer planned. The ability to mint additional tokens under the existing contract is not necessary. This capability, as well as other functions built into the current token contract that are not needed, pose potential risks to the Swarm Network. Lessening the weight of the contract and removing these functions makes it easier to use, process, and trust.
What’s in a name?
As a bonus, a new contract will allow us to change the name of the token to simply ‘SWARM’ instead of ‘Swarm Fund Token.’ The simpler name better reflects the broad applications of SWARM’s infrastructure, plus reduces the likelihood that people will confuse us with a Fund ;)
Timeline and process
The current SWARM Network governance proposal was ratified by the SWARM Council on August 23rd 2019. As a result, will ballot be open for voting here on August 23rd until August 29th 2019. This will be the first vote under the recently amended SWARM Network Constitution (Version SNC-1019.02) and will include the Default Masternode Delegation.
NOTE: This blog will be updated to reference the new token contract at a later point.
- If approved, on August 30th 2019, transfers of the current SWM contract will be temporarily frozen.
- At that time, the balances of all wallets holding SWM tokens will be recorded.
- The new SWM tokens will then be distributed to the recorded wallets. The old tokens will remain untransferable in the wallets for a certain grace period, but will be destroyed subsequently.
- After the distribution, the wallets will contain the upgraded token, also called SWM, which will be fully functional and transferable.
The entire token upgrade process is expected to be completed within a few hours.
You won’t need to do anything to upgrade the SWM tokens in your wallet. They will be replaced when the upgrade takes place. The upgraded SWM tokens will require less gas, and will be more easily integrated into wallets and marketplaces.
We are in contact with Bitfinex, Ethfinex (DeversiFi), IDEX, and HitBTC and will coordinate with them on the messaging and execution of the token upgrade. See those sites for specific instructions to make sure your tokens are safe. We know there are other exchanges trading SWM today, and suggest token holders either remove their tokens for the upgrade or communicate directly with those exchanges on the process.
How to prepare
To repeat, if you are holding SWM tokens no action is required from you. The existing SWM tokens in your wallet will be replaced 1-for-1 with new, upgraded SWM tokens.
That said, we do recommend that you transfer SWM tokens from exchange wallets to personally held wallets before August 30th 2019 and hold them in your own wallets. As described, if the token upgrade is approved, the state of the tokens (i.e., where the tokens are held) on August 30th 2019 immediately before the token upgrade will determine where the new tokens are distributed.
A streamlined token for a decentralized network
With over 350 active masternodes, millions of votes cast on SWARM network ballots, and millions of dollars already raised using SWARM technology, the community has spoken loudly. Now it is time to help the SWM token do its job — to sit quietly underneath that technology and fuel it. This simplified and upgraded token will make it easier for issuers to stake SWM, transactions to include SWM, new masternode operators to acquire SWM and activate their nodes, and for partners to build on top of SWARM.
We will host an AMA in Telegram on Monday, August 26 (time TBA) to answer community questions about the token upgrade.
Thank you for your ongoing support!