Addressing the short migration period: Discussion on how to support eMC holders

[Cal]

Issue at hand
The migration period from Merit Circle (MC) to Beam (BEAM) is too short, especially given that the vesting period for v1 staking is set at 12 months. This leaves many early MC holders unable to migrate to BEAM in time.

Personal context
I’ve personally faced this issue due to a severe health condition. Over the past couple of years, I have been battling cancer and spending significant time in hospitals. As a result, I haven’t had the time or resources to manage my crypto portfolio. My investment in MC is substantial, motivated by my interest in technology and gaming and the passive rewards I could earn from staking and liquidity provision. This investment, although currently not profitable as I bought in early 2022 at higher prices, represents a significant part of my retirement fund and inheritance for my children.

A few months ago, I revisited my investments where a lot of my MC is locked as eMC after claiming rewards last year, and I can see that the bridge closes before I can merge them. Since then, I have observed that other community members are in a similar predicament. Despite a proposal to extend the migration period, I believe a new discussion and proposal are necessary.

I might not be around in 2-3 years, so seeing my rewards becoming worthless, due to some governance that took place while I was too sick to deal with anything, is obviously very frustrating, since it’s a big chunk of what I can leave behind for my family.

Proposed solutions

• Smart contract conversion : Implement a smart contract that converts eMC to eBEAM. The eBEAM will remain locked until the original eMC contract’s vesting period ends. This approach ensures fairness and was overlooked during the initial migration process.
• Treasury support for liquidity : Allocate a portion of the Treasury to maintain liquidity in the Uniswap MC/WETH pool (or alternatives) until December 31, 2024. This would enable the sale of MC once it is unlocked.
• Extending the bridging period: Extend the bridging period by 3-4 months, i.e. Jan./Feb. 2025.

Supporting data

• DAO’s responsibility : The MC DAO needs to address this issue for its future credibility. I know that there is a personal responsibility for keeping up with developments, but life circumstances can interfere. I had no plan of getting cancer when I invested.
• Early investors : Many affected individuals are early investors who supported the project from the beginning. These investors should not be penalized, especially given the current lower value of their investments compared to the early days/ICO prices.
• Liquidity concerns : Currently, there is some liquidity for MC on platforms like Uniswap and Kraken, but it is very low. Post-migration, there’s no assurance that platforms like Kraken will continue listing MC, potentially rendering MC worthless without utility. I think it’s fair to assume that there will be no liquidity post-migration.
• On-chain data: Analysis of transactions from October 26, 2023, to present shows:
• ~1.3 million MC claimed too late.
• 317 claims (potentially representing 317 wallets/individuals).
• 73% of these MC were claimed within two months after the deadline (26 October 2023 - 12 months vesting).
• BEAM supply is 60,233,515,536 BEAM, meaning converting eMC to eBEAM would only represent 0.22% of the total BEAM supply, unlikely causing sell pressure. So, if the DAO is motivated by self-interest that they do not want to inflate the supply of BEAM unnecessary, this should not be a concern.

References:

• Dune Analytics: Beam Token Migration
• Etherscan

Community perspective
Another community member, Mojopin, highlighted the MC Constitution (passed in MIP-25) which states: “All community members should be treated fairly and contributors rewarded appropriately.” The current handling of eMC holders does not align with this value.

Reference: Merit Circle Governance

I’ve never begged for anything in life, and writing the following sentence cringes me – but desperate times call for desperate measures… Please, have some compassion – don’t punish my children more than they already have been because of my illness.

Conclusion
I look forward to hearing from the community, particularly those who oppose these proposals, to understand their concerns regarding:

• Converting eMC to eBEAM.
• Using the Treasury to create liquidity.
• Extending the bridging period.

Let’s find a solution that both parties can be happy with.

[tmfbernd]

Thank you so much for your effort putting this together. Hopefully the community will support this more than in prior discussions. I hope this moves to a vote. If so, please don’t forget to migrate your current MC to BEAM before the vote, so that you’re eligible to participate in the vote as well. I made that mistake when my proposal about the same topic went for vote.

[LordSam]

Echoing @tmfbernd, this is a well-structured post. I’m sorry to hear about your illness.

I like the three proposals, but I don’t have the technical knowledge to evaluate their feasibility. Nevertheless, one of them should be viable! I’d also love to hear comments from the nay-sayers.

[shortstraddle]

Thanks @Cal for the thorough and thoughtful write up. In the past these posts have failed to move to a vote and then get auto-closed by the board’s post policy. How can we move actionably based on your proposal?

[Lars11]

Thanks for writing this post, and very sorry to hear about your illness. This underlines exactly the kind of flipside that the current migration period has, where community members get caught with rewards they cannot claim for one reason or another. Yours being on the completely innocent line of the scale.

I think there’s some interesting insights in your post, especially converting eMC to eBEAM would only represent 0.22% of the total BEAM supply

This means that what has huge implications for the individuals not being able to migrate in time has no implications for the rest of the DAO that has migrated in time. Seeing as this (the fear of being diluted) must be the primary rationale behind the members previously opposing these proposals, I’m eager to hear if this has changes their views?

You will not be diluted, and you will have a well-functioning DAO again with everyone being on the same page. Let us hear your thoughts on Cal’s three proposals?

All the best, and hope that you’ll get healthy, Cal.

[Cal]

As I’ve understood the guidelines, I (or someone else) needs to set up a proposal that can be discussed before potentially moving to a vote. Though, I would like to hear some more input before taking the time to set up a proposal.

[Cal]

Thanks, Lars11, I appreciate the support!

I agree with you on the rationale part and would really like to have some input/discussion from the opponents on why one of my proposals cannot be implemented, as it will mean more or less nothing to current BEAM holders, while it means a lot to those of us with locked eMC.

[Cal]

I’m disappointed by the low level of commitment in this “governance” forum for Merit Circle—it’s quite concerning.

My goal with the original post was to discuss both sides of the proposals, not just comments from people in the same situation holding eMC unlocking after the migration period.

Please, some of the nay-sayers, developers, etc., feel free to share your points of view.

Tagging some of the past nay-sayers: @Boomer , @BimBamBuweeh , @drcomot , @zksnark

[CryptoPuck]

Cal, thank you so much for this. When the initial proposal was made, I was participating in a school-sponsored sailing program with no internet access for two months. When I returned, I discovered that the deadline to claim my rewards had already passed by two weeks, causing me to lose all my money. It astonishes me that the funds I invested for my college education are gone because the “reasonable” time frame in the proposal was set at just one month. A month is not nearly enough time for a significant change like this. There’s a reason the Olympics are planned years in advance, not just one month ahead.

[Gamelady]

Thank you, Cal, for your thorough analysis of extending the deadline to migrate eMC to BEAM for those holders that are disadvantaged by having their coins locked past the migration deadline. I agree with your analysis and believe that MIP 29 was voted on to give people a year to figure out that they needed to migrate the coin. So, asking for 3 months for people who had not claimed their rewards and are locked for 12 months, seems completely reasonable, and actually, a very short period if you want to follow the MC Constitution (passed in MIP-25) which states: “All community members should be treated fairly and contributors rewarded appropriately.” The current handling of eMC holders does not align with this value as Cal stated in his discussion.

I think this is criminal that you have a man with cancer that has this money for his retirement, and you have a young person trying to go to college and will lose all their money because they did not claim their rewards in time. Just to be clear, there were no time restrictions on claiming rewards. We have still not heard from any of the people that voted against this proposal. So, let me get this straight, people invested in your tokens, helped your coins by staking them and you reward them by letting them lose all their money when they have presented three proposals that could allow them to recoup their money while not negatively affecting current BEAM holders? Again, “All community members should be treated fairly and contributors rewarded appropriately.”

As you recall, when MIP 28 was first proposed, they suggested that the three-month migration deadline was too short, and everyone voted for 12 months. Why should those holders who had not yet claimed rewards (which was never a requirement) only be given 6 weeks (from the MIP 28 proposal) to be alerted and claim rewards so that they could migrate their coins. That is also not fair! Everyone else was given 12 months. And those community members were good coin holders as they were staking their coins for the community.

I am deeply disappointed in this community. Why would large holders not vote for this if it does not affect the value of their coins? Why would anyone want to invest in BEAM if the large holders are only out for themselves with no regard for others, even when it does not negatively affect them? This attitude seems selfish and shortsighted, and it’s very disheartening to see. I don’t think this shows a united, strong community and I don’t know why anyone would invest in this coin. What’s to stop them from doing this with BEAM, migrating it to another coin and only giving people a short time to migrate once again. Could be a ponzi scheme.

I am also one of the holders that did not claim my rewards until November 2023, three weeks too late to be able to migrate. I was actually in the process of writing a proposal to the DAO when yours came up in the discussions. I am so impressed with the research you did to make this proposal; it was incredibly detailed and provided information about current holders that I didn’t even know existed.

I will also beg for some compassion as this will wipe me out if I am unable to migrate my eMC to BEAM. I feel so stupid that I put money into a coin that could do that to its investors. I guess this is exactly why people think that crypto is not a good investment.

Personal Context: I claimed my rewards three weeks after the MIP-29 vote that set the 12-month migration period. Therefore, my eMC is locked until November 16th, making it impossible for me to migrate to BEAM within the current timeframe. Although I could have claimed my rewards sooner, there was never a guideline specifying a timeframe for claiming rewards. Claiming rewards within three weeks of the vote (or a little over a month from the first MIP-28 proposal) seems reasonable, and it seems unfair not to give people time to see the announcement and claim their rewards, which are then locked for 12 months. I want you to be compassionate but more importantly, you should want to be fair. This is not in keeping with the MC constitution.

Those who did not claim their rewards before the vote will lose their entire investment. I had claimed some of my rewards before getting sick, so I was able to migrate about one-third of my investment. However, I never thought the rest of my investment would be in jeopardy of being lost because I did not claim my rewards in time.

I Support all Proposals:

1. Smart Contract Conversion: Converting eMC to eBEAM and keeping them locked until the original vesting period ends is a fair solution. It ensures that early investors like myself are not unfairly penalized.

2. Treasury Support for Liquidity: Allocating a portion of the Treasury to maintain liquidity until the end of 2024 would provide a safety net for those of us who have invested in MC.

3. Extending the Bridging Period: Extending the bridging period by 3-4 months would give many of us the necessary time to complete the transition.
   Community Responsibility: As you mentioned, the DAO’s credibility hinges on how it handles situations like this. Life can throw unexpected challenges, and the community should be compassionate and supportive of its members during such times.
   On-Chain Data and Community Perspective: The data shows that converting eMC to eBEAM would have a minimal impact on the overall BEAM supply. The MC Constitution emphasizes fairness and appropriate rewards for contributors, which aligns with these proposals.

Call to Action: I urge the community and especially those who have previously opposed similar proposals to reconsider their stance. These solutions have minimal impact on the overall BEAM supply but are crucial for those of us affected by the short migration period.

Conclusion: Let’s work together to find a solution that ensures fairness and supports all community members. I look forward to hearing more input (from those that opposed the previous proposal) and hopefully moving towards a vote on this important matter.

Thank you again, Cal, for bringing this issue to light, and I wish you strength and health in your journey.

[JosSuavo]

Thank you for posting this, I find myself in the same situation and feel really disappointed in the response so far, hopefully we can change this!

[Cal]

Thanks for the support @Gamelady.

I totally agree that fairness is key, especially in a situation that directly impacts community members’ investments (and lives). Extending the migration period and supporting those who missed out seems like a reasonable and just approach, fully aligned with the community’s values. Hopefully, everyone will act with compassion and uphold the principles of fairness for all.

[Cal]

Additional Data and Next Steps

Voting Data
I’ve done some further research on the last proposal that was voted on to understand what is really going on.

As shown in the table below, the proposal on the Governance forum received 34 “Yes” votes and 27 “No” votes, resulting in a narrow win for the “Yes” group. However, when looking at the number of votes on Snapshot (the voting platform), the proposal was voted down with 52 “No” votes and 36 “Yes” votes. In a simple vote where each person has one vote, the proposal to extend the migration period would still have been rejected.

Sources:

• Proposal
• Snapshot

Next, I examined the voting power, i.e., the number of votes per person/wallet. As the graph below indicates, the majority of “Yes” votes came from smaller BEAM holders, with only two people voting “Yes” who had more than 50 million BEAM. On the other hand, the “No” voters had a significantly stronger presence, with one person/wallet holding over 150 million BEAM. As shown in the table below, this single voter accounted for 14% of the total voting power, making it difficult to compete.

This voting power disparity means that a few “No” voters with over 50 million BEAM wield substantial influence; these 8 persons/wallets alone control 55% of the voting power and can effectively dictate the outcome.

I find this quite concerning. While I understand this is how the DAO operates, I suspect that some of these “No” voters might be developers or admins who are simply tired of hearing from those of us who are locked out. I’m not questioning the voting system, but I hope at least one of the eight “No” voters will comment on this post and explain their concerns regarding any of the three proposals.

Next Steps
I’ve given a lot of thought to how we can move forward from this “deadlock,” especially since the dissenters are not engaging in this discussion. When this discussion ends, I will start drafting the proposals one by one. I’ll begin with the first proposal and see whether it gains traction for a real vote on Snapshot.

I believe this is the only way to compel the dissenters to engage in the discussion, as they will have to actively vote—first on the forum, and then hopefully on Snapshot.