MIP-30 - Extension of the MC to BEAM token migration period to allow just claimed v1 rewards to still be converted into BEAM

Title
Extension of the MC to BEAM token migration period

Authors and contributors
@tmfbernd

Status
This proposal was subject to a minimum 7-day discussion period. Due to an extensive discussion and several ideas, the discussion period will be extended by 7 days.

Summary
This proposal seeks an extension to the migration period from MC to BEAM tokens from 12 months to 15 months, acknowledging that some long term community members, including ICO investors, still possess unclaimed V1 rewards. The intent is to provide an opportunity for these outstanding V1 rewards to be converted to MC before the revised deadline, ensuring the inclusion of committed supporters and preventing loss of the rewards for everybody who did actually intend to use the MC=>BEAM migration before the original deadline would pass.

Specification of the proposal
The migration deadline set by MIP-29 aligns with the V1 staking rewards vesting period of 12 months. Recognizing that some community members only realized that due to personal circumstances they had unclaimed V1 rewards when they wanted to do their MC=>BEAM migration in the last few weeks, this proposal seeks a pragmatic solution. To prevent the loss of these rewards, an extension of the migration period by an additional 3 months is proposed. This extension aims to facilitate the conversion of the unclaimed V1 rewards by anybody who intended to do their conversion within 3 months from the start of the bridge. This should include 90%+ of all active community members who weren’t aware of their unclaimed V1 rewards when the bridge started.

The extension is now proposed to be limited to 3 months, to accommodate the concerns of community members regarding risks that the bridge will bring, and that two tokens would have to be managed for a longer time. An extension of the opening of the bridge by 25% (from 12 to 15 months) rather than 100% (from 12 to 24 months) should limit these risks to a manageable degree.

Optionally, a time-lock of the bridge is proposed. That is, that once these 15 months are over, the bridge will close once and for all and won’t be able to be reopened. The time-lock will be implemented, if deemed feasible by our developers. This will still need to be evaluated.

Unfortunately, implementing a 20% tax as intended to be proposed after our discussion below, cannot be implemented according to our developers.

Motivation
The proposal stems from the recognition that dedicated, long-term supporters of the project may possess sizeable unclaimed V1 staking rewards, representing a substantial commitment to the DAO. Avoiding the forfeiture of these rewards due to the migration deadline is crucial to uphold fairness and inclusivity within the community. This extension aims to safeguard the interests of committed long-term contributors, ensuring their continued participation and support for the DAO’s growth.

Rationale
These rewards typically belong to longer term supporters of the project - some of them may not have the ability to be as active in the community as checking in every day or every week. Nevertheless, the reason that they bought into MC years ago without selling their MC tokens is evidence of their commitment to the project. Hopefully we can avoid punishing these longer term supporters who hadn’t claimed their rewards on time. By limiting the extension to 3 months, it is ensured that really only those v1-stakers will be able to bridge all their eMC rewards who did realize that they had unclaimed rewards within the first 3 months that the bridge is open. In other words: Community members who are active at least on a quarterly basis. It will exclude those community members, who won’t realize they had unclaimed v1 rewards within the first 3 months of the bridge opening – thus members who are much less active,

Budget
No costs in addition to the MIP-29 proposal with a planned 1 year migration period are expected, unless a time-lock may be implemented, which may cause verification costs.

Poll
Do you want this proposal to proceed to an official vote?

  • Yes
  • No
0 voters

Copyright
Copyright and related rights waived via Creative Commons CC0.

4 Likes

I would even argue for increasing the conversion period to 24 months. Swapping from one token to another can substantially affect the taxation of your assets - in my case it’s the difference between paying over 45% taxes on my gains as opposed to 0%. Increasing the period to 24 months would give everybody much more room to adjust and make the conversion in a way that does not result in a massive tax bill that would not have occured without the switch to Beam. Since this will affect a lot of early investors and is in no way detrimental to the project as a whole and other backers, I strongly suggest to subtantially push back the deadline.

2 Likes

IMHO, any proposal must first satisfy two important questions:

Is this a problem that needs solving?

Does this benefit the DAO?

I think there are likely mixed answers to the first question: many here who have been laboring through a two year bear market but keeping on top of the DAO have no sympathy for anyone who has locked tokens beyond the migration date. The DAO provided constant updates on migration and we all had sufficient time to vote on the proposals AND unlock old V1 rewards. You snooze you lose.

My personal opinion is that the DAO is stronger with more community members and more people who are invested. Anyone who was asleep on the wheel and is motivated to re-engage is good by me. I’d rather have more people on the team than punish those who aren’t full-time investors.

BUT, this proposal as written doesn’t offer any real benefit to the DAO.

I would not support this as written. My suggestion would be that anyone with locked eMC beyond the migration date would have to pay a 25% bribe/tax to the DAO for tokens to be migrated.

In this case, migration becomes revenue generating for the DAO and impacted investors/community members receive some of the benefit of holding MC for 2+ years.

1 Like

Same issue here, my rewards would be fully vested after the deadline.

There should be a perpetual option to one way bridge - why was the conversion time boxed in the first place? And having people vote on this that already bridged, who have a financial incentive to lower supply, doesn’t feel right.

2 Likes

that’s a good point, I didn’t even think about tax implications. In my view, 24 months make sense. Most other excellent projects who did something similar (POLYX, MPL, RNDR) offer much longer times to convert tokens from one blockchain to another.

I’d rather have more people on the team than punish those who aren’t full-time investors.

Wondering if other people see this differently? Because that would also be my argument: People who have been supporting the project for a long time, even if not involved in the day to day, are a benefit to the DAO. Punishing them may turn some of them away from the DAO, leaving MC with fewer long term supporters.

In short: The benefit of the DAO would be that it demonstrates to stand 100% behind its long term supporters independent of whether they can be active in the day to day or not.

Just to give an example of why such investors may have missed that they still were staking in V1:

I myself run a newsletter where we invest and recommend to invest our followers (a 4 digit number during the bear market) into fundamentally promising crypto projects for the next 5-10 years.

MC is one of them. But we have invested into about 20-30 other similar opportunities.

We review all our projects at least on a 3 month basis, and we involve into them actively only if we see something going totally wrong or if we think they miss an opportunity to improve. This has rarely been the case for MC, the community has managed to steer the project generally really well. One hightlight, in my view, has been the dealing with YGG. It was excellent how this was resolved.

One opinion where we disagreed was the utilization of the stablecoin portfolio. That’s why we wanted to propose a change. It was ultimately not voted in favor for, but we accepted since it didn’t really impact the long term upside of the project that significantly.

In addition to that, we didn’t view staking MC as core to our investing thesis. It was good to do, and we happily recommended everybody do that. But we didn’t really follow how our staking has been going. That’s how we missed the fact that we still had V1 rewards that were unclaimed.

In other words, the reason why the MC DAO has been so well managed is the reason why we only check in with MC DAO and its community every 3 months, and why we only involve in discussions every now and then, rather than all the time.

2 Likes

Is there a way to view how many addresses have (and have had) unclaimed V1 rewards? I’d be curious how many people may be affected and what’s the amount of eMC that would become worthless should the community not be in favor of extending the migration deadline.

I voted in against this. I have a few reasons which I am happy to explain:

@tmfbernd I understand that you had faith in MC which caused you not to check in on Merit Circle DAO as often as you should. I don’t think either you do need to be a full- time “investor” too.

Once you started staking in V1, it has been clear from the start that V1 was an 1- year program. Thus, after the 1- year you should have unstaked and claimed your rewards, as V2 got introduced around that time.

We are now 2 years later after the end of V1. If you did check in on MC every 3 months, you would have been made aware of this during the introduction of V2, as the team gave plenty of reminders and announcements. There was even a proposal of cancellation few months ago, which you can not have missed during your 3- monthly check. I would like to remind that we were discussing for more than 2-3 weeks (both in the community and here in Governance forum) about the migration deadline. In other words: ample opportunities were offered to chime in with your opinion and to un-stake.

As MC is a DAO, DAO requires certainly an active participation.

@Santino
I do think that the argument about the tax implications for an extension to 24 months do not make sense either as you should have taken this into consideration before you started staking your MC. It has been known from the start that every claim is subject to a 12 month vesting & V1 staking was a program for one year.07:55

@BimBamBuweeh : I very much did take this into account and planned accordingly, but as you know there was no talk about Beam back then. To certain tax jurisdictions, a token conversion has massive tax implications - so my problem is not with the vesting period, which I had always planned for, but with the MC token becoming use- and worthless and having to convert to Beam.

I don’t see where the problem is with extending the deadline, how does this in any way harm the DAO or other holders? It only keeps people on board and sympathetic to the project.

2 Likes

Thank you for taking the time explaining this.

It does feel really harsh - not to be considered a valuable member of the community despite being active (staking, voting) and involved since 2 years, only because we only got involved in discussions when we really thought helpful.

But if that’s the view of the community, I’ll of course accept it, even though I don’t think that this would be a positive signal to investors with a long term mindset.

Just to be sure: I did stake in V2 as well, just claimed my rewards yesterday. That’s how I noticed that I still hard rewards in V1. I don’t know why I didn’t see this when I did stake in V2, but I did miss it despite regularly checking in.

2 Likes

Henlo,

Drcomot here.

  1. Extending the claim period may not effectively address the core issue imo, as there will always be someone new who claims to have missed the deadline, leading to requests for further extensions. I’m concerned about setting a precedent and repeatedly voting on similar proposals.
  2. The discussion regarding the migration has been ongoing for weeks. The proposal has even been divided into 2 parts (MIP-28 for general consensus on BEAM & MIP-29 for the execution - thus provides a longer timeframe for discussion and voting.) Both proposals have been passed with a 98% majority.
  3. As participants in the DAO, we should actively engage in discussions pertinent to its future. If you are investors, you should constantly monitor you investments imo (unless you coma)
  4. Those unable to claim eMC within the designated timeframe - you are not losing your original tokens. You are just missing out on the opportunity to earn additional rewards as you are not active in the DAO. It is your mistake.
  5. Maintaining 2 tokens over an extended period can lead to some problems (team has to manage migration inquiries for a longer period, people may confuse the presence of 2 tokens, and unknown actual mcap/fdv etc) this could pose additional risks to $beam’s potential as a leading infrastructure gaming token in the market.

Sorry, but I will vote “NO” on this proposal.

Drcomot

3 Likes

Thank you @drocomot, appreciate the time you take to address your issues with the proposal

re #1: I see this. Though missing the migration by a year, I would argue, is different than missing it by a few weeks. I was about to transfer my tokens to BEAM the other day, just 3-4 weeks after it was possible, but only then realized that I still had unclaimed v1 rewards. A few others are in the same position, as apparent from discussions here and over in Telegram. We are mostly people who are relatively active, just not on a monthly basis. With that argument you’re seeing as the same as people who check in not even once a year.

Nonetheless, there is a way around it, leaning on an above suggestion: Let’s include a tax. Everybody who transfers within the first 12 months: 0%. the 6 months after that: 10%. The 6 months after that: 20%. The six months after that: 30% the 6 months after that 40%.

That would leave the bridge open for 3 years in total, and the later someone makes the transfer, the more he has to pay the DAO. This way, everybody wins, especially those like you who are able to transfer all their tokens in the first 12 months.

re #2: that’s true. I missed the vote. Even if I didn’t, I probably would have voted “yes”, because I had no idea that I still had v1 rewards, and I didn’t remember that v1 has a 12 month vesting period. Of course, all my own fault.

In the proposal discussion, there are a few comments that read “that leaves enough time for all eMC holders”. Well, kind of true, but only for the ones who claimed their rewards before they wanted to migrate their MC to BEAM, unfortunately.

re #3: 100% agreed. We do that. I write updates for our members about every 3 months. I vote in most proposals, and I have been staking in both v1 and v2. We even tried to get another proposal done a few months ago.

#4 “It is your mistake”. That’s 100% true. And I expect I am not the only one having made this mistake.

#5 That’s the first good argument I hear against a longer bridge. But couldn’t this be addressed by just not actively managing the MC token? Teams over at Render, Polymesh, Maple, and probably many others I don’t know (OPNX/FLEX just occurs to me) don’t seem to have big struggles with this.

No need to be sorry, it’s your opinion. I am grateful the voices of us who are losing some of their stakes under the current migration scheme are at least heard.

1 Like

I followed along the project and thought I had claimed all rewards so I didn’t check again only after the migration did I go back and see there were more. My mistake by 3 days. I’d be fine with a tax.

1 Like

I’m in the same situation as the vesting ends ~3 weeks after the migration deadline.
An extension of the migration deadline would allow my vesting to complete and for me to do the BEAM migration.

I’ve been supporting the project since the public ICO, contributed to pool, but I have had more important priorities such as work, family, health…
I should have kept an eye on what was going on, but daily life took over.

I don’t know what could be all the possibilities, but an extension to the deadline could be one.

2 Likes

Hi @Boomer, @BimBamBuweeh, @drcomot, and everyone else interested in officially voting on this, please kindly note that I have specified the proposal to extend the deadline by 12 months, and include a 20% tax as suggested above, so that all community members benefit, including those who are not int he same situation as many of us who hadn’t realized their v1 rewards situation. I trust that everyone makes their best judgement for the long term benefit and prospects of the DAO.

Hi @Boomer, @BimBamBuweeh, @drcomot, I’m afraid that based on feedback from our developers, an implementation of the proposed 20% tax is not possible. So while I wish I didn’t have to, I had to take this tax out of the proposal again. Hopefully you still consider to come on board with this proposal, considering that it neither has a negative impact on cost nor would harm the community in another way.

I don’t agree with the proposal and will vote NO

Not because I don’t want to reward users that have funds locked, but because I think bridge risk is real and we have no idea what the bridge ecosystem will look like in 24 months.

I would propose a snapshot and token mint / unlock for any rewards / tokens locked after the initial 12 month period.

That would work as well. I was aiming with my proposal at the lowest cost solution. But if the risk is too high for a longer bridge, then your idea makes more sense.

I got a friend in the same situation.
He had problem this year (losing his job etc) and didn’t claimed his rewards.
He also hold its MCs since D1.
I don’t understand why people will prevent him from benefiting his rewards.

So I’ll vote YES :+1:

1 Like