What is SophiaTX Buyback and Why Participate
In this article we explain what the SophiaTX Buyback is and why users are encouraged to participate.
Still haven’t applied? You can find all the instructions here.
Before the launch of the SophiaTX Blockchain main net on July 25 2018, SophiaTX ran on the Ethereum network. This means that before that date, its proprietary token SPHTX was an ERC-20 token.
Since operating on a new native blockchain meant that Ethereum’s ERC-20 SophiaTX tokens would have been incompatible with this blockchain (meaning tokens could not be sent to the new blockchain), and users needed a way to send their tokens to the new SophiaTX, the “Token Swap” was announced in early July 2018.
The Token Swap is a process where we changed from running on a third-party blockchain network (in this case, the Ethereum network) to our very own native Blockchain.
Because previous ERC-20 SophiaTX tokens could not have been simply “deleted” nor could sent our new blockchain, we created a Token Swap process. We took a virtual snapshot of the location of every ERC-20 SPHTX token in existence and created a mirror image in our new blockchain network. Then, once an owner of ERC-20 SPHTX visited the new blockchain, it was easy to validate their account against the already existing ERC-20 snapshot and therefore possible for the owner to claim tokens on the new SophiaTX Blockchain main net.
Despite the swap being completed, the old ERC-20 SPHTX tokens were still running on the Ethereum network and could not have been “deleted.” These ERC-20 tokens now had no value or utility.
To withdraw old ERC-20 SPHTX tokens from circulation and avoid any transactions with these coins, the SophiaTX Buyback Program was devised. We offered our users an option to send their (now obsolete) ERC-20 SPHTX tokens to a “dead address” which cannot be manipulated, sent, or withdrawn from. The Buyback was conducted in a 20:1 ratio. This means that users receive 1 new SophiaTX token as an incentive for removing 20 of their tokens from circulation (1 new SPHTX for 20 old ERC-20 SPHTX).
There are 2 types of Buyback:
- Manual buyback – for those who did the swap manually via registration and completing the swap process. The new tokens will be distributed to directly.
- Automatic buyback – for those who completed the swap process via a supporting exchange. The swapped tokens they received already included additional 5% more SPHTX for all their old ERC-20 tokens swapped.
Finally, to avoid placing too many tokens in circulation following the buyback, all buyback tokens will be vested for 27 days prior to being accessible to users.