DOT is adjustment software
The Web3 Foundation (hereinafter referred to as W3F), which develops and promotes the Polkadot protocol, claimed on the 26th that the native token DOT is no longer a security, but adjustment software. After three years of active engagement with the U.S. Securities and Exchange Commission (SEC), he said he believes the DOT has changed and is no longer a security.
1/ @Polkadot‘s native token DOT is, and always has been, co-ordinating software. Following W3F’s announcement on DOT morphing into a non-security, read the thread below to learn how DOT was able to morph, what Polkadot is, and the primary goals of the network. pic.twitter.com/sAnU56GnIh
—Web3 Foundation (@Web3foundation) January 26, 2023
Polkadot is a project that aims to achieve interoperability between different blockchains. It is a PoS (Proof of Stake)-based blockchain co-founded by Ethereum co-founder and former CTO Gavin Wood, and is being developed by W3F, which aims to build a decentralized web (Web3.0).
W3F announced a similar claim and its basis on its official blog in November last year, but this time, the contents of the Twitter space (audio live function) about “DOT morphing (transformation)” have been reiterated. Published in a tweet.
Polkadot was built from the beginning as a “base layer on which other blockchains can be built” to enable a decentralized internet. That’s why it was important for Polkadot to be perceived as “engineer-oriented tuning software that runs underneath other networks.”
So instead of competing with Layer 1 like Ethereum or Bitcoin, it’s a protocol that aims to lay the foundation for connecting and communicating with other blockchains in a secure and scalable way.
Relation:Polkadot Strengthens Cross-Chain Functionality
Tokens can be desecuritized
W3F Chief Legal Officer (CLO) Daniel Schoenberger said Polkadot’s vision did not envision the blockchain’s native token to be a security. However, in light of the DAO report released by the SEC in 2017 and the token security criteria (“Framework for Investment Contract Analysis”) presented in 2019, the SEC determines that DOT is a security. It turned out to be very likely.
The framework suggested that almost all digital assets offered and sold for fundraising could be securities. At the same time, even digital assets that were initially offered and sold as securities were shown a path to allow revaluation at a later date.
Based on the above rationale, Schoenberger argues that, under certain circumstances, for the purposes of U.S. federal securities law, there is a pathway that allows digital assets to cease to be securities in the future. He recollects that he understood that it was possible to “do (morphing)”.
Therefore, W3F decided to “do whatever is necessary” for DOT to become “non-securities” in the future. Accepting a proposal from the SEC’s Strategic Innovation and Fintech Hub (FinHub), we have actively held meetings with the SEC since November 2019 to develop a deeper understanding of the SEC’s concerns and develop solutions to address them. has been developed.”
Careful attention to token distribution, investment disclosure, marketing and communications suggests that DOTs could be reborn as software, not securities, “when Polkadot reaches true technical decentralization.” The W3F explains that it was.
W3F has strengthened its control over the distribution of DOT tokens and has taken the following measures:
- Restrictions on holding large percentages of tokens by some individuals
- Refuse to buy from venture capitalists who are only interested in investing
- Advertise technology but not tokens
The W3F has developed a theory on how to achieve “token morphing” and has shared it with the SEC, he said.
W3F announced a new governance system in June last year and is striving for true decentralization, but it has expressed the view that the provision and sale of DOT does not currently fall under the category of securities trading, and DOT is not a security. .
Relation:Polkadot Announces New Governance Mechanism