MIP-28 - Migrating MC token to BEAM token

Proposals
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1

Authors

@DAOCoreContributors

Summary

In order to better align with the current activities and practices within the Merit Circle ecosystem, this proposal seeks to convert the MC token into the BEAM token on a 1:100 basis. The BEAM token will have the same utility as the MC token currently has. It is suggested that the Merit Circle name continues to be used as the overarching “brand” relating to Beam networks and the BEAM token. The token migration contract is proposed to be accessible for migration until the end of year 2023. Those that are eMC holders at the time the token migration contract is deployed will also have the possibility to migrate.

Status

The vote for this proposal commences at 5pm CET 22 September and ends at 5pm CET 24 September. The vote is available here.

Edit to the proposal: The authors see the need for, and benefit of, providing additional technical details about the token migration before asking the community to vote on such details. Therefore, the authors have decided to limit the scope of the proposal to concern the question of whether the MC token should be migrated to the BEAM token.

Specification of the proposal

The Merit Circle ecosystem has evolved tremendously over time. Since starting on the foundations of the Play-To-Earn era, the DAO has progressed significantly, and today such activities are almost non-existent within the Merit Circle ecosystem. Initially, parts of Merit Circle could arguably have been framed as a gaming guild. However, shortly after its inception and already by the time the MC token was launched, this term became irrelevant in the context of Merit Circle, as it simply did not then (and particularly not now) reflect the state of the organization or ecosystem. Externally however, the DAO is inaccurately still categorized as such by some.

Databases, marketing outlets, and social media often base their research and information on the token that is affiliated with the ecosystem, and in turn, the organization. Likewise, researching parties will use information typically found on platforms such as CoinGecko and Datadrops to form an opinion. All of this information currently leads to the MC token, which in one way or another, is still associated with outdated information from the initial phases of the DAO.

With the introduction of Beam, a blockchain network specialized for gaming and the connecting name for all the gaming adventures within the Merit Circle ecosystem, the scope of the Merit Circle ecosystem is growing exponentially. By building important gaming infrastructure, such as an open source blockchain, smart contract account solutions and various other open source SDKs for game developers, the Merit Circle ecosystem is positioning itself into becoming an important web3 gaming player, with the MC/BEAM token in the center of attention powering this ecosystem of games utilizing blockchain elements.

The Beam chain utilizes a native gas token solution, and currently this role is fulfilled by the MC token. However, it is more logical that the BEAM token fulfills this role, and positions itself as the central token for the Beam chain.

Despite changing the token used to power the ecosystem, the Merit Circle name would still continue as the overarching brand relating to Beam networks and the BEAM token.

What changes are suggested in this proposal?

  1. Converting the MC token to BEAM on a 1:100 basis. Meaning every 1 MC will grant the holder 100 BEAM. All Merit Circle DAO’s MC treasury tokens will be converted from MC to BEAM.
  2. Develop and deploy a permissionless and autonomous smart contract on Ethereum that enables the migration of MC tokens into BEAM tokens. As the source code will be open source, others will also be able to implement a user interface (frontend) to interact with such smart contracts. It will also be possible to connect directly to the smart contract on Ethereum. The smart contract is intended to be deployed as soon as possible if the proposal passes (will be duly informed about it beforehand in public channels) and remain accessible until the end of the year 2023. After this, conversion won’t be possible anymore. However, those (and only those) that hold eMC at the time the token migration contract is deployed and that are unable to convert such eMC into MC prior to the end of the year 2023 because of ongoing vesting, will have the access to migrate for a reasonable period after the time their respective ongoing vesting period ends.
  3. Change the native token for Beam from MC to BEAM and adjust the bridge and native minter accordingly.
  4. Withdraw the LP position of the DAO from MC/ETH and deposit an equal amount into BEAM/ETH as soon as the BEAM contract is successfully deployed.

The changes 1-4 above must be read in conjunction and any proposed change may only be conducted if all changes are meant to be conducted (e.g. changes referred to in 1, 3 and 4 all rely on the deployment of the smart contract referred to in 2).

Motivation

On 14 August 2023, the Beam mainnet launched in developer preview mode. The work towards transitioning the network into a permissionless and trustless state (with the transition to PoS) is ongoing. With Beam expected to become available for public access in the near future, we believe it is timely to carry out the proposed token migration, and thereby direct focus towards Beam and the ongoing developments around that network.

Furthermore, we believe that converting to a more Beam-focused ecosystem will improve brand recognition and strength. We believe that Beam is competing with other gaming networks such as Immutable and Ronin. Educating those outside the DAO about this, through means such as written pieces and ongoing reminders about the changes in our ecosystem, will take significant time and effort. Instead, a token conversion allows us to strategically align both those within the DAO and outside the DAO, with our vision in an efficient manner.

Budget

Other than time of the development team, the only thing that will be required are independent audits by Sherlock and Quantstamp. Estimated costs are approx. $50,000 to be funded by the DAO treasury.

Rationale

We anticipate some will have questions for such a significant change. Therefore, we’ve pro-actively answered some questions we could foresee, but still encourage any further questions to be asked as a response to this thread.

What utility will the BEAM token have?

The BEAM token will become the native token of the Beam network, and is intended to have the same utility as the MC token currently has. The utility is multifold, and currently comprises of:

  • Layer-1 token on Beam networks (validating and securing such networks), being the fuel of blockchain gaming and other activities on Beam networks.
  • Governance (both of certain smart contract systems and the DAO treasury).

Consequently, the BEAM token will be the focal point for coordination and incentivization within the Beam / Merit Circle ecosystem.

Why a token migration period until the end of year 2023?

A token migration period until the end of year 2023 should provide every MC tokenholder with ample time to participate in the migration, should the proposal be approved. As explained in further detail above in relation to change no. 2, those that are eMC holders at the time the token migration contract is deployed will also have the possibility to migrate. Due to the fact that the BEAM token is meant to secure the Beam network and be used to validate transactions on such a network, we consider it beneficial to not have a too long migration period (as tokens are required in relation to such a network). If the proposal passes, the community will be notified about the expected time of deployment of the smart contract, once it is known. Other relevant details about the migration, including the deadline for migrating, will be posted through the relevant Merit Circle channels.

What happens to any MC tokens not migrated in time?

BEAM, in practice, will be an upgrade and renaming of the MC token, and will assume all utility that the current MC token has. The two tokens are not intended to co-exist, as the BEAM token will be created to replace the MC token. However, only the owner of each MC token has the power to migrate their MC tokens, meaning any MC token that is not migrated will simply remain as an MC token. For each MC token not migrated, the BEAM supply will effectively be relatively reduced (at a ratio of 1 MC : 100 BEAM).

We anticipate it is unlikely that 100% of the MC supply will be migrated to BEAM, due to reasons such as holders permanently losing access to tokens, and so it is likely a small amount of MC tokens will remain as MC.

Why not conduct an airdrop of the BEAM token?

There are mainly three reasons for why we propose to not structure this as an airdrop:

  1. The BEAM token is meant to replace the MC token and not coexist with it. With an airdrop, the tokens would have the characteristics of being two distinct tokens, rather than what is meant to be achieved here (replacement by way of upgrading and renaming).
  2. It is difficult to conduct a fair and accurate airdrop in this scenario, as MC tokens are more or less constantly changing hands. It is a risk that tokens might change hands after a snapshot is conducted and the outcome could be that someone who acquired MC after the snapshot was taken does not become eligible to receive BEAM tokens and vice versa.
  3. Conducting an airdrop of this character implies incurring substantial costs (including transaction costs).

Why is the token converted on a 1:100 base, and not 1:1?

Due to the expansion of products, and the fact the BEAM token will be the gas token for the Beam chain, we do think that an increase of the supply in units represents a more optimal supply number. As such, you are more likely to be using whole numbers when utilizing tokens, rather than decimals.

Does this mean there will be supply inflation?

There will not be any effective supply inflation. The tokens are converted on a 1:100 base, the numerator is increased, but there are practically no new tokens being issued. BEAM can only come into existence through a conversion of MC, and MC has a limited supply that cannot be increased. If every MC token converts, the supply will be exactly equal on a relative basis. The relative supply can only stay equal or decrease after the conversion.

Isn’t it dangerous to perform this conversion?

The conversion will be executed and peer reviewed by a wide variety of technical team members. The contracts will be audited as usual by both Sherlock and Quantstamp - audit reports will be shared publicly before the actual conversion happens.

Poll

Are you in favor of this proposal?

  • Yes
  • No
0 voters

Copyright

Copyright and related rights waived via Creative Commons CCO.

11 Likes
2

Meow,

Thank you to the @DaoCoreContributors for bringing forward such a significant proposal to the Merit Circle Gaming DAO.

It has been nearly two years since the DAO launched, and since then, we have seen so many changes take place. What started as a P2E focused gaming guild, has now evolved into something greater and more comprehensive Gaming DAO. We can categorically say that the Merit Circle Gaming DAO of today is entirely different to the Merit Circle that began in 2021. With that in mind, we fully support the proposal to migrate to the BEAM token.

We believe it is time for the Merit Circle Gaming DAO to be recognized in the gaming space for what it truly is - an all encompassing gaming network which has the ability to build gaming infrastructure, support the best upcoming games, and even create its own games.

In the past few months, Sad Cat Capital members themselves have personally had many conversations with those unfamiliar with Merit Circle, and we agree that many of those outside of the DAO do not (yet) have a good understanding of what Merit Circle is. Despite the Gaming DAO having moved on from P2E a long time ago, it is still something that Merit Circle continues to be associated with by many.

Therefore, we agree that this token migration from MC to BEAM will be a strong starting point for educating the wider gaming space on what Merit Circle is, and what the Gaming DAO hopes to accomplish going forward.

As the Beam network will be a focal point for Merit Circle growth going forwards, we also believe it is appropriate and logical to introduce the new BEAM token to mark the start of this new chapter. It makes sense to have BEAM as the gas token for the Beam network, if anything for simplicity and easy recognition.

Let us embrace our opportunity as leaders within the Gaming DAO space. We are the architects of Web3 Gaming’s future – trendsetters, not followers. We have the power to define the industry’s ‘brand’ and ‘style,’ creating our own market and setting the standard for others to follow. We are the forefront, and the vanguard of Web3 Gaming.

We will be voting YES to this proposal.

Signed with left paw,

Clawdius the Terrible
Sad Cat Capital

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9 Likes
3

Greetings,

The Ascending Galactic Federation finds itself aligned with the proposal.

BEAM is the future of Web3 Gaming, and a YES.

Signed,

Erik von Pumpson
Admiral of the MC Enterprise
Ascending Galactic Federation

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6 Likes
4

Been involved with Merit Circle since December 2021, and this is arguably the most excited I have been for the DAO as a whole. Time to spread our virtual wings and move on from our beginnings, and start anew with Beam. Completely agree that EOY is ample time to get your MC converted, especially if enough warnings are communicated (frequently) across all channels. Will be voting yes, onwards and upwards!

4 Likes
5

Hello

I agree with the direction of this proposal, and will gladly support it. I think the points made by the authors and @SadCatCapital about brand recognition and associations with p2e are accurate and will be helped by the passing of this proposal. It’s time to make a bold statement of what Merit Circle has transformed into.

Joey

5 Likes
6

Vote YES.

It would be appreciated if participation in this token migration is rewarded with the official commemorative BEAM Cat NFT, in one MC orange or one of the colors of BEAM. Beam because you’re worth it.

5 Likes
7

I think it’s a good proposal with sound reasoning and motivation. The only thing i’m a bit less enthousiastic about is the ratio of 1:100. why not 1:10? it would work similarly in limiting in the use of decimals and it wouldn’t lead to a meme like max supply number.

Is there any more information about the reasoning of the ratio?

2 Likes
8

Hi Merit Circle Community,

Before voting, I have 2 questions

1/ Would this change affect the token listing on CEX, expecially Binance ? Are we sure the $BEAM token will remain on Binance ?

2/ A pure technical analysis point of view : The historical data for $MC won’t appear on $BEAM chart (or will it ?). So, level of interest (main support/resistance ant ATH) won’t be seen by traders. As the current $MC long term chart is beginning to look good (weekly bullish reintegration and support retest), don’t you think it could be better to keep the higher levels and ATH/Fibo as bullish levels to reach ?

Just my 2 concerns but generally in favor of this proposal :wink:

1 Like
9

I second this.
A 10x solves the decimal problem while not looking like a too high supply (typical of meme tokens).

Would love to see reasoning behind why 100x and not 10x.

P.S - love this proposal will be voting yes regardless of above point.

10

I second this question and what about tokens on CEXs ? they have, obviously, to be converted on-chain, which means on ETH L1, which means high fees.

And I second the question about 1:100 and not 1:10 or something.

1 Like
11

If there is a swap and it does go ahead I highly encourage to somehow try and make it like an open swap. I mentioned this is the trader chat and main channel but constellation network did a swap a while ago and gave people almost a year. People missed out and sued the team and you must be prepared for that. We all here check the markets weekly but some people especially in this market buy and hold and don’t check back for a year and they shouldn’t have their tokens worth nothing because of that. Just my 2 cents seeing what happened with constellation network.

2 Likes
12

Henlo, Drcomot is here.

TQ for the proposal. I love the overall idea of “rebranding” from the $MC token - to distance ourselves from the common perception that we are just a “gaming guild” and portray ourselves better. Rebranding is definitely the best way to achieve this effectively imo, rather than spending time and money educating the public about what we are (which is can much more tiring & challenging).

When I read this proposal, a few things come to mind:

  1. While we are maintaining “Merit Circle” as the DAO name, would it create a hurdle to market $BEAM as we intend? For example, people are still searching for “Polygon” as what it is, instead of searching for what “$MATIC” is.
  2. I understand the reason behind the 1/100 proposal - to make the token figure more optimal with a round number (instead of a decimal). However, from another perspective, the human brain often thinks that 0.xxx is cheaper than xx, especially when they want to spend it for gas fees (even if both are of equal value). For example, I spent a lot more when buying eth nfts compared to sol nfts because Im always deceived into thinking that sol one is expensive, while my eth purchase is actually more expensive in terms of USD value lol… But this is very subjective, so I am okay with the current proposal
  3. I have a mixed opinion on the duration given for the conversion. Initially I thought that 3 months might not be enough, but after looking deeper, I realized that 3 months is actually commonly used in the corporate world (e.g., a 3-month resignation notice, a 3-month notice for insurance re-pricing, etc.). So, I think 3 to 4 months should be fair enough.

Regardless, I always support whatever is best for the DAO.

Drcomot

2 Likes
13

My thoughts on migrating the $mc token to a $beam token:

  • Better alignment of token brand w/ underlying network
  • A lowered relative supply / holder count, due to inactive participants who (probably) won’t convert
  • An increased unit supply, for better workability as gas on $beam network
  • A fresh chart for upcoming bull run

I vote yes.

KG

4 Likes
14

Ok I am not writing this in a cafe so I can expand my points from earlier.

I vote YES on one condition!

KEEP AN OPEN ENDED SWAP DATE AND INCENTIVISE EARLY SWAP PARTICIPANTS.

Here me out:

  • I have seen the legal ramifications deadlines can cause, not everyone watches the market every month, we always say HODL, some people are on deployment, in training and hold their tokens in the background and think everything is okay. We would be literally stealing from them, constellation network did this and have been sued due to having a swap deadline, it’s not worth the ramifications. It can only cause issues…

  • Having an open ended swap date like VET did by rewarding early swappers literally causes no issues, it benefits everyone. I get people want a smaller supply but at the risk of taking away other peoples tokens who haven’t swapped… that isn’t right.

Please Merit Circle I literally ask of you, if this swap happens PLEASE do not have a swap deadline. We are better than that, let’s not leave a holder of MC behind but let’s reward those actively checking the market.

Please, I’ve witnessed the damage which can be done by this, we are better than that

Kind regards
Much love
Hammyscookie70

6 Likes
15

1:100 ratio is a large dilution, we deserve better than that for holding such a long time. 1:10 ratio seems fair with a linear lockup.

16

There’s no dilution. If you had 1 MC before now youll have 100 BEAM. Aside from market changes, your dollar value will remain unchanged.

4 Likes
17

Please re-read the proposal. There is no extra inflation or dilution for anyone. It’s just a token swap of 1:100 for everyone as @joebags mentioned.

18

what happens to MC’s historical price data? Will exchange listing efforts need to restart from ground zero?

19

If this proposal goes to a vote, we should consider AdmiralErik’s suggestion on Telegram to divide the vote into three separate votes:

  1. A vote for swapping the token from MC to BEAM
  2. A vote for the 1:100 denominator
  3. A vote for the maximum time allowed for the swap

I support the swap from MC to BEAM. After initially reading the proposal, the 1:100 ratio seemed reasonable to me, especially considering that platforms like Steam have 132 million monthly active users (based on 2021 data). Ultimately, it’s just a shift of the decimal point, making it easier to read whole numbers instead of fractions. Another comparison that comes to mind is in-game currencies like Fortnite’s V-Bucks. The value of 1 V-Buck is less than 1 US cent, depending on the quantity purchased. Many gamers are used to dealing with larger numbers of in-game currencies rather than fractions.

As for the time window for the MC-to-BEAM swap, I’d like to draw a parallel with the recent V2 reward unlock. Over 80% has been claimed in the two months since the claim contract was initiated, and the rate of claims is slowing down.

I doubt there would be a significant difference between swap windows lasting 3, 6, or 12 months. Once the proposal is approved, the focus should be on utilizing all available communication channels:

  • Substack, Telegram, Discord, Twitter, websites, etc.
  • We could even request that CoinGecko add a note, as they have for some other coins undergoing a swap (see here: CoinGecko Link).

The goal is to make as many people as possible aware of the swap. Achieving 100% participation is unlikely; there will always be individuals like John Doe who show up 18 months later, complaining that their 42.069 MC are now worthless.

8 Likes
21

Hello

Excellent proposal and lots to look forward to in that. I agree with everything aside from the swap timeline. I think this should discussed given the low activity in the markets and low engagement on socials.

The majority of active people will swap within the opening few days. A % will open their wallets at Christmas to find their tokens are now defunct. This is too short of a time frame to have your bags voided in my opinion.

Will be voting yes.

Best regards,
AS

3 Likes