That’s right. It wasn’t the only goal for the decision but it is one of the goals.
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No that isn’t right. If you have an account with some xem in it at the fork block, but did not opt in in time, you can still come back and claim the catapult tokens, because your account had a certain balance at the block height.
If instead of opting in, you send those tokens to another account after the block height, that new account won’t have a valid claim on catapult tokens, but the original account still would.
It’s the state of accounts at the fork block that matters, not what happens before or after it. Anyone who had xem at the fork block height, has a valid claim to the amount of xem they had at that point in time. When users make that claim is completely up to them.
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日本語で申し訳ありませんが
英語が出来ませんのでご容赦ください。
catapult大変期待しています。
ただ日本語の文章で確信が持てなかった部分をお聞きしたいです。
2チェーン方式はわかりました、同時に２つのトークンが存在するという意味で。
確認をしたいのは、今のxemと同数のトークンが配布されるという事ですが、それによってxemが消えるということではありませんよね？
100xemもっていたら、新トークンが100配布され、手持ちが100xemプラス100新トークンになる
という解釈でよかったでしょうか。
そうだとは思ったのですが微妙に文脈では確信が持てませんでした。
よろしくお願いします！
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can anyone explain what fate awaits NIS1 after the release of the catapult?
Okay, so there is only 1 snapshot that matters. The way it was written that wasn’t obvious and it sounded like the opt-in could literally occur at any point after the fork. In that case I agree you cannot game this since there is no possibility to make a claim later. But what if someone sends me old XEM on NIS1 after the snapshot? I cannot get my catapult tokens unless they send me corresponding catapult tokens on the catapult chain? This makes old XEM truly worthless as it isn’t even redeemable for catapult XEM by a new owner after the snapshot. Therefore it is imperative to preserve the old XEM markets.
If you plan on having 2 markets on exchanges though you have to burn the old ones otherwise the dump will destroy the old market.
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Trying to summarise a few questions from the thread into one place, it also covers some of the telegram ones that are coming as well:
How will the NIS1 nodes be incentivized to run?
Detail being worked on actively, there are several viable options that combine well, just need to try and get the balance right, will be released for discussion as soon as each has been checked through and confirmed viable (technically, legally and economically) for further discussion. There is no silver bullet, it will be a combination of factors.
Are you in contact with exchanges? E.g. will they do the migration for us? Till what extent will it be the start of something new.
…implementation and timing with exchanges are critical"
Agreed that timing will be critical. Yes, several have indicated interest but until a clear direction of travel was publicly available, they are hesitant to commit (rightly, I would be as well if I was them). They have their own road maps, this will be a key part of the next few months but we have some already prepped to get involved, as always commercials/contracts behind these that need certainty on the direction before they will engage fully.
Will Catapult tokens be a mirror of current token supply and fund distributions? i.e. 9 billion tokens and same community fund supply etc?
So will you burn the millions of unnecessary NIS1 tokens in the various community / marketing / silver coin funds?
This is being worked through but yes it must be at least same total supply (or not everyone can opt in), known Circulating Supply is likely a bit lower because any locked accounts, lost keys etc that don’t opt in will not be in circulating supply. There are things being worked through in regard to reserved pools and incentivisation, more to follow over the coming weeks.
Once you opt-in to Catapult network, do you also automatically opt-out of NEM 1? XEM tokens become unavailable"
No, you would continue to hold the XEM
Why mosaics won’t migrate? What will you tell mosaic project owners?
There are technical challenges with migrating everything; we bring over data that isn’t needed (bloat), in some cases force migration where people don’t want it and complicates the xem migration; what to do with an account that doesn’t opt-in and holds a mosaic that does for example (or the reverse), ownership of the mosaics at creation and a few more.
Tooling will be developed that simplifies the migration of them post launch, root namespaces are being migrated optionally because that stops squatting which allows for recreation and distribution of sub namespaces/mosaics when the owner is ready to migrate.
What value will the new Catapult token be assigned at opt in (for tax purposes)?
This will be set by the market. For tax purposes, the project cannot set the value, tax authorities don’t care what we say basically, or we could, but they can just ignore it, its not like an ICO distribution.
The Fair Value of a token will be specific to the jurisdiction, some options (there will be more):
- View it similar to a Share Split, where you have two tokens but no change in value at nemesis
- View as income
- View as zero value due to being technically 0c at nemesis
- View as zero taxable value because the total demand over two chains is the same so no increase in wealth as such (similar to share split above).
- View as being some arbitrary or average of the price between time of distribution and time of tax declaration, effectively unrealised capital gains
- View as airdrop and “free money” but would probably require prices at parity at or near xem price at time of launch which is unlikely
There are several ways that it can be assessed (as with other chains that have done similar things). It will be important for those with concerns to take individual tax advice to ensure they are both legal and optimised for their personal situation. Where possible we will also share advice as we can get it, it should be noted as always that any advice on tax is only as good as the legislation in the jurisdiction at the time and there have been several instances of tax authorities retrospectively applying legislation. I would advise approaching it conservatively risk wise to avoid problems years down the line.
Opt-in does allow you to select to timing that works best for you though and doesn’t force a taxable event so the tools are available to manage it.
Survey form - has duplicate questions
Thanks for that, must have been blurry eyes late at night, fixed now! There have been quite a few responses already, please do keep them coming: https://forms.gle/4rkq23zdA5tG4V7h9
NIS1 being stopped or forcifully decommissioned
This is very difficult to do without the ability to exert centralised control over the network in some way which I’m pretty sure no-one in the community wants to be something that can happen to a Blockchain.
One coin or moving moving coin from NIS1 to Catapult
Creating one coin and allowing the ability to opt in post Catapult launch is technically unfeasible, tokens live in one chain or another chain, they can’t move between them under the current technology on NIS1 (or Catapult).
The ability to cross chain swap is conceptually similar but is not tokens moving between chains, it is effectively opting in to receiving a token on the second chain and locking up on the first (like Eth1.0 one way bridge). NIS1 doesnt support cross chain swaps so its not an option technically without changes to NIS1. Going one coin route is also possible if it is technically feasible to upgrade nodes from NIS1 to Catapult which at a technical level it is not. The only other option would be a very long opt in period pre-launch to ensure everyone had a fair time to opt in, and even then there are likely to be a few who don’t and come back later. Under Token Swap there is also an arguement legally to require that a holder receive the cash value of their tokens if they choose not to opt-in, there is precedent for this in non crypto legal systems.
Token Swap (and Burn) - tax assumptions
It is incorrect to assume Swap and Burn has no tax implications, there are jurisdictions where it almost certainly does and interpretations in others where it could. Tax implications exist with all the solutions, and most Crypto trading scenarios, anyone who thinks otherwise should ask their local tax authority if they agree. The opt-in ones allow the holder to decide when the taxable event takes place for them personally - opting in pre or post launch.
Gaming the opt-in
A few suggestions have come up on different channels, @bloodyrookie gives a good example here: Migration Committee Community Update #1.
The only extrapolation I wanted to make beyond this is that clearly any legal entity that is holding the unclaimed tokens post launch would have clearly (and publicly communicated) governance rules, that are legally binding for how the tokens are to be managed.
Where possible, the process of claiming post go live will be automated as well rather than having manual assessments, mechanisms for this are being looked at in parallel with other development work but a concrete mechanism has not yet been settled on.
Another example I gave in Nemberia earlier as a worked example:
- Opt In is announced as open at block 500 on NIS1, people are given until block 5000 to opt in.
- Account A opts in at block 1000 with 50 XEM, then send 40 xem to an exchange
- Brings it down to Account B, opts in at block 2000 (and so on as many times as you like).
- At block 5000, we check the balance of Account A, its 10, we check Account B it is 40.
Each account can only opt in once, and if you buy extra xem between block 500 and 5000 and opt in then the mechanism is working as expected.
Private Keys
NIS1 private keys will work on Catapult post nemesis, the devs solved this approach a while ago to make it easier for holders to receive their Catapult tokens regardless of which mechanism is used for migrating XEM balances.
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ごめんなさい-日本語は話せません。
グーグルの翻訳から：
-はい、それは正しい解釈です
-XEMは存在し続けます
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I’ve looked at multiple scenarios and I too agree that the token allocation opt in is the best way forward.
I’m happy the committee has come to this decision. 
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Thank you for your politeness
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こんばんは
はい、XEMは消えません。 NIS1に残ります。 カタパルトトークンはカタパルトチェーン上にあります。
100XEMーNIS1に，100カタプルト-カタプルトチャインに。
I appreciate your comments. Very thoughtful but I think it’s also important to assess how important it is to maintain the old chain at all. Personally, I attach zero importance to it. Is there a significant number of people using it that won’t switch to catapult such that ideal decisions of the best operation of catapult need to be tempered to support the old chain?
It will be a hard fork, just like ETH/ETC, if enough people want to stay then it is up to them to revive and work on the old chain. The nem community wants catapult, and the best catapult they can have.
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God, why is it so complicated!
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Create a Single, MultiSig, Community protected address in NIS1
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Have a logic in Catapult chain to monitor this address
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Ask all NIS1 users who want to migrate to Cata to create accounts in Cata.
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Create logic, Smart contract, whatever, that will read transactions done to address from point 1 and message, where the customer should provide the new Cata address.
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Ask users to sent they XEM to the address from Point 1, exuding the price of creating MultiSig in Cata and possible transaction fees in Cata (e.g. customer will pay twice, to Adress Point 1 and from Cata Contact to his address, but will pay it in XEM from NIS1)
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When Contract sees regular transfers (nonMultiSig) - just transfer, in case of MultiSig, transfer the amount needed for MultiSig creating and what until MultiSig is created in Cata, then sent the rest.
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Do the same for Mosaics. Accept mosaic owner transfer, give fees for creating a new Mosaic in Cata, open the Mosaic transactions for migrated Mosaics. Protect new mosaic creation in Cata based on the list in NIS1, so people can’t just create the Mosaics with the same name as still valid for NIS1
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Have this process working until there are transactions in NIS1
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Deprecate NIS1
However, in the instance that we are running two chains, it introduces several challenges which are considered a higher risk by the group:
What are the problems? If you ask, the community will run 100+ Nodes in less than a day on a new chain
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important to assess how important it is to maintain the old chain at all. Personally, I attach zero importance to it. Is there a significant number of people using it that won’t switch to catapult such that ideal decisions of the best operation of catapult need to be tempered to support the old chain?
I agree, very important to do this. There are a couple of aspects to consider - in order to support post launch opt-ins for those who can’t/don’t opt in pre-launch we need to have an immutable record of the balances, NIS1 is a logical source of that. Also, there are projects that have used NIS1 for some time (admitedly not a large number of them) and have data they have told clients is immutable and around forever, it undermines that credibility to remove it, which undermines the project’s credibility if we use that type of statement in the future for Catapult - the natural counter to it becomes, yeh but you said NIS1 was immutable and look what you did, why should I trust you this time round.
Last point on it - what’s the option to switch it off though, even if we decide we don’t want it, if some decides they do, they don’t have to upgrade the software to include any changes, and can just keep it going, there isn’t a (generally acceptable) way to switch it off if we wanted to.
It will be a hard fork, just like ETH/ETC
I’d view it more like ETH 1.0 to 2.0, they are upgrading but the underlying technology isn’t compatible. ETH/ETC and BTC/BCH/BSV etc were all primarily philosphical splits which this one isnt, its one of the first few that is an amicable, non bug fix fork, not even sure what to call it…maybe a medium-firm fork 
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I was just asked a pertinent question in Nemberia about what the legal implications are of Token Swap, the non-preferred option. Below is the answer, slightly edited for readability out of context, it is quite a long thought process but I’ve summarised as best I can.
Basically, as someone who bought XEM, either an original stakeholder or afterwards, it is reasonable to have an expectation the team who created it, write the code, build the brand etc will not perform an action that is to the detriment of the project. By performing a swap (burn) effectively they would be saying…we want to take value off NIS1 from a legal perspective. However with an allocation it is a new chain, that you can participate if you like, you are invited and we encourage you too…but we are not disrupting the tokenomics on NIS1, you don’t have to; the market will thendecide how to value NIS1.
The first is a direct action against NIS1 conceptually, the second is a positive action toward something else; the intent is different. Similarly wording like “kill NIS1”, “NIS1 dies” shows a clearly different intent to Catapult is launching, its great, come and get involved.
The advice from NEM Ventures and NEM Foundation’s legal teams were that while it is definitely a grey area (in lots of areas of Crypto and forks) but there is more potential for liability with the swap.
Before anyone points fingers about self protection etc, flip the question around, having knowledge of the legal advise above - is it reasonable to expect the devs to press go on a piece of code that may render them individually liable against legal advice? In addition the entities and individual directors and employees could (to a lesser extent) be accused of similar and even further removed but hypothetically possible, projects who have told their users/clients that NIS1 is XYZ then it isn’t.
There is no precedence to follow on this so it is guidance, it is not a written legal opinion etc, it is a best efforts interpretation of risk in each scenario.
Remember - the above is not why it is was selected, it is just one more of of several reasons
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Why the value of NIS1 would be decreased with the swap? How do you determine the NIS1 value? If you can guarantee the Masternode program reward remains the same in NIS1 and Cata then there will bo no intention to deform the MasterNodes from holders and continue harvest on transactions (I might be wrong but the value of NIS1 is based on system decentralization.)
NIS1 will not die until there is a demand for it to work
Some good points. So we need to separate out the risks. One is a token price risk, and another is data mutability risk.
I think that we could be agreed that the token price itself shouldn’t matter (you should opt-in for catapult), only the implications of having a very low price matter. One of these was mentioned before, that whales could take over the blockchain and manipulate it. I think it’s unlikely that anybody would want to set up 200 NEM1 nodes so that they can fork away a few LUXtag watches. What else could they really do? The difficulty of rolling back the chain should increase a lot with each block. Supernodes could be incentivized in other ways to keep running for a period just to ensure that the classic ledger was safe from manipulation. Later, projects/companies will take their own responsibility for migrating.
I don’t mean to be facetious but what is the scale of the thing we are talking about really. It would be good for some projects to chime in and tell us how it would affect them. @r3n3 Thoughts?
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I think that if price will be good for old nem chain
super nodes owners will continue the super nodes program at nem old chain
and the new super nodes program at new nem2 chain
so super nodes owners will earn from 2 source
old and new chain
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No you are right, and herein lies the challenge. By using Swap, you burn a lot of tokens, actively removing the account holders from the system, that increases centralisation to whoever is left and also implicitly pulls the holders away from NIS1 as an active intent, both of which could be interpreted fairly rationally as an act that weakens NIS1 knowingly.
As I say, its not a clear cut piece of advice, it never will be, but the guidance from the lawyers who looked at it was that Swap has more potential risk
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Yep all totally fair points and I broadly agree with them all. Its why we need to ensure we have a good Node Assurance program in place as a safety net in case the nodes aren’t there organically, there are a few good ideas on this which will be coming out public in the near future as well - just testing them all and see the combinations that are an aren’t viable before getting feedback on it.
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Great dicision!!! 
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