I spend some time studying the various documents now available on wiki.threefold.io regarding the upcoming TLE, TFT vs TFTA, the TF Marketmaker Bot, including the various How to Buy and Sell tokens documents.
Reading all this gave me a considerable amount of further insight of what is going to happen the coming phase. However many questions and un-clarities came to light also.
I want to share these with the community in order to receive comments, remarks, flames and answers, which hopefully benefit us all.
The decision to create two generations of TFT has been made relatively recent in this project, so much of the published information is not the result of a 12 month long consensus & thought process. As such I concerned it worthwhile to engross in all this a bit further.
I post this long message not to offer critique, but as a search for further clarity. I’m sure further clarity will aid an even bigger success of this amazing project for all involved.
Apologies for when you think I’m splitting hairs on certain topics. But I feel when we’re talking about the aforementioned topics, we can’t be concise enough.
Please bear in mind that its very possible that I have a fundamentally wrong understanding of certain concepts and implementations. Although I have much experience as an entrepreneur, manager and investor, I’m a relative newbie when it comes to the Crypto world.
However, I feel that when I experience unclarity as a relative insider (I’m following the project for 3 years now), then I’m sure the same unclarity exists for many outsiders, so I want this out of the way.
I will post some statements copied directly from wiki’s in italics , and will then comment on them.
Each 2nd generation TFT is a converted TFTA. The first batch as used in the token distribution event was converted first.
ThreeFold Farmers have donated 70m TFT to our Foundation.
So, if I understand this correctly, all TFT’s (on Revine) where first converted to TFTA as a result of the migration to Stellar. Then a second generation TFT was created, which is a TFTA converted back to TFT living on Stellar. For this 70m TFTA where donated by farmers. These 70m (now) Stellar TFT’s will be offered during the TLE to (hopefully) raise about USD$10m for the benefit of the project.
It is unclear however which farmers have donated these tokens. Did all farmers do this pro-rato, or where selected farmers invited to ‘donate’ these tokens? It’s not really material as the benefits of the TLE will go to the project anyway, but how this process has worked is a bit un-transparent.
Also ‘as used in’ implies that the event already happened, which is not the case I hope.
Next, in the light of my understanding, further ‘batches’ of conversion from TFTA to TFT will follow, but its unclear what will drive these conversions.
In other words TFT is nothing more or less than a TFTA with a certain time difference.
The TFTA will automatically convert to the new TFT at end of this year.
…and you can sell your TFTA as TFT by means of the ThreeFold market making bot starting July.
All TFTA holders can sell as much as they want starting June 1, 2020 through the TFT market maker bot as long as the price of the TFT is high enough & there is liquidity on the market.
There seem to be two dates mentioned here. Starting June, and starting July. I assume the bot will commence its work at only one date.
I’m trying to figure out what is meant with a ‘ certain time difference ’ and ‘ you can sell your TFTA as TFT ’.
The initial 70m tokens will be offered end of May (so very soon), while the TFTA can be offered ‘ as TFT ’ starting July. So there is a one Month time difference here, although it seems possible to sell TFTA now on Stellar (not via the bot).
The bot will enforce a minimum sales price for the TFTA, and will sell TFTA in blocks of $20K (more about the bot later), so until the end of the year there is is an additional barrier to sell TFTA, as 1) sales takes only place in blocks and 2) offerings are only possible on Interstellar and not Liquid.
Please do note, we are on a public exchange the Foundation offers these TFT at 0.15USD during May & June, any other TFT owner can also sell at their own conditions.
The minimum selling price for TFTA might be a third barrier, as this barrier does not exists for TFT holders. Although 70m tokens will be offered by the TF Foundation at $0.15, the Foundation seems to be free to accept lower bids, while the statement any other TFT owner can also sell at their own conditions also seem to suggest that downwards price-pressure is a possibility.
This then creates a barrier to sell for TFTA holders as sales orders will only be executed at a price of $0.15 or higher by the bot.I assume not much room for negotiation will be offered by the bot.
It’s unclear who these ‘ any other TFT owners’ could be however (at this point), as after the conversion, there are (should be) only TFTA holders. It’s my perception from the above that only the TF Foundation currently holds TFT (besides a few persons who bought TFT on Interstellar, from the TF Foundation apparently).
This bot has as goal to allow any TFTA token holder to sell tokens to the Stellar network in way that price stability gets maintained
What I always (sort-of) thought to understand is, that the bot would accept block sales orders TFTA from Interstellar (where TFTA lives), then will convert these TFTA to TFT (like how it was done with the first batch of 70m), and would then try to fulfil these orders AS TFT on Liquid. Hence, TFTA sales orders are eventually fulfilled concurrently with the fund-raising TFT sales on Liquid, so they enter the same order book, thus same market.
However the above statement indicates the bot actually works to sell tokens on the Stellar (Interstellar) only.
I’m a bit clueless in this case, who the buyers of TFTA (via the bot) would be on the Interstellar network. This as funds raised by selling TFTA will not flow to the TF Foundation or the individual projects, so investors who want to help the project forward will not buy TFTA.
Also all marketing currently seems to be aimed at selling TFT on Liquid, and not at selling TFTA ‘ as TFT ’ (whatever that means) on Interstellar.
TFTA holders can set the sales price (min sales price) or they can sell at market
In light of the above, I understand ‘market’ here means Interstellar market, as this is the only market available for TFTA (for now). This means that the market price for TFTA on Stellar, will be different than that of TFT on Liquid.
I just don’t see how rates for both can remain the same (on Interstellar pricing for TFTA ad TFT are already different). So, if I understand this correctly, then the statement “ TFT is nothing more or less than a TFTA with a certain time difference”, is not complete as the value for both TFTA and TFT will evolve differently.
I do understand that investors who actually want to buy TFT, could opt to buy TFTA instead, with a fair possibility to pay a lower price, as -eventually- all TFTA’s will be converted to TFT. But this idea seems far fetched.
A huge effort has been made to select Liquid to be the best exchange to list TFT for all TFT holders to create liquidity in a way that complies with the values of TFT. But from what I understand now, the benefits of the Liquid listing will not be available for TFTA holders (so for most members of the community), and selection for an exchange for the ‘Fundraising Event’ might have been done with different selection criteria if this was understood better (on hindsight). Note that the decision to move to Stellar was made later than the decision to list on Liquid.
The net result of all this might be that the aforementioned ‘time difference’, is not one Month, but 7 Months as only at the end of this year, all TFTA will get converted to TFT on a 1:1 basis ( All TFTA are being transferred to Stellar on a 1-1 basis ).
However this ‘time-difference’ will result in a different risk, and together with the different market and liquidity profile for TFTA vs TFT, this will be reflected in a (considerable?) value/price difference.
the original Rivine TFT’s are going under name TFTA on the Stellar blockchain until the end of 2020. Starting 2021 this name difference will go away.
It’s a bit unclear however, how this conversion will take place. It looks like more than a name change. Will it be similar with how TFT got converted into TFTA in our (3bot) wallets, so the TFTA should be present there at that time?
I ask myself this, as I have yet to find a way to move TFTA from the Interstellar back into my 3bot wallet, but that is probably my stupidity.
Further… what would it mean when at the end of the year the rate for TFTA is considerably lower when compared to TFT? If liquidity does not materialise on Interstellar (and again, I don’t see what will drive this liquidity), then a lot of TFTA will remain sitting there, which will then impact market price of TFT.
As this upcoming conversion is known now, I’m sure this conversion will be priced into the upcoming market price of TFT.
We are organizing a Token Distribution Event on Stellar and 2 public digital currency exchanges
You can buy our ThreeFold Token on 2 public exchanges (end May), existing farmers or through Stellar. Its a very easy process .
By buying tokens, you directly support these projects and therefore the growth of the ThreeFold Grid and its experiences.
Its very easy to buy these TFTs and as such become part of the larger ThreeFold experience.
The first sentence mentions 3 exchanges, and the second statement mentions only 2 exchanges.
I assume the 2 public exchanges are Interstellar and Liquid, and that the possible(?) 3rd exchange is BTC Alpha. It unclear why Liquid and BTC are currently not mentioned anywhere in the docs, as we are only days from the communicated TLE date. Will BTC Alpha still be a place where investors can buy TFT (offered by the Foundation) or if this is off the charts (I would not be very sad about that).
The link in the above text refers to these TFT’s (apparently referring to the 70m now TFT donated by farmers), but the linked page mentions a third option to buy TFT, and that is directly from Mazraa or Better Token.
This is confusing. Per the above, these farmers now should only have TFTA, so IF there is a possibility to buy TFT before the TLE then it should be from the Foundation. It could be that Mazraa and Better token represent the Foundation, but its not very clear and doesn’t match with that what is communicated in the rest of the Wiki’s.
It’s easy to buy and sell ThreeFold Tokens (TFT)
The focus seems here again on TFT, and not on TFTA. Indeed buying and selling TFT will be easy once its listed on Liquid (I think BTC Alpha does not add much in in ease of use, as the path to fiat is unclear on this exchange).
Selling and buying TFTA is not simple, and some careful guidance is needed. Its also not cheap, as most of the diverse steps required involve fees.
This brings me also back on my earlier statement that Liquid was chosen for the ease of use (among other things), while Interstellar is considerably less intuitive to use, and offers not path to fiat (as far as I can see).
It also reminds me of earlier statements regarding an easy path to fiat for all TFT holders via an in between step involving a gold-exchange. I never heard anything about this, anymore, but not having this, now seems to be a hurdle for TFTA holders.
In this chapter, we show step-by-step how to sign up for Coinbase, a well-known and respected exchange that allows you to convert fiat into digital currency. Feel free to use any exchange platform with a fiat gateway, but this guide is specifically related to Coinbase.
I thought our partner in crime for the TLE is Liquid. However here Coinbase is taken for the example. That’s ok of-course, but the message would be more consistent if we focus on the partners TF works with. For the community an example based on Liquid (BTC Alpha) would also be more helpful (if this is still on the radar).
Solar is a free XLM wallet that is very user–friendly and available to most–known platforms. We show you how to set it up and what to pay attention to.
Again, why not focus on Lobstr, the native Stellar wallet?
How to Sell
We’re working on this section. If you need help in the meantime, please feel free to use the support chat on threefold.io. Thanks!
I’m currently trying to discover this path myself, but so far the path from TFTA, TFT or even XLM to fiat is far from easy, with many steps and parties involved with each step costing fee’s. A further hurdle for investors(?) to purchase TFTA.
Only days separates us from the TLE, and I assume people who want to ‘get in’ also want to know how to ‘get out’. Its easy to get in and out on Liquid for TFT (assuming it will be possible to buy TFT with Eur/Dollars directly, instead of conversion of fiat to BTC/whatever first), but the path to fiat is much less clear (and cost-efficient) on Interstellar for people who want to get out/into TFTA, and most of the tokens now live there. And will be there for a quite a few months more, if what I stated before is correct.
From all this I conclude that the ‘liquidity’ event taking place the coming period will not really be directly relevant for TFTA holders (= all of the current community minus the TF Foundation), but only indirect as a fund-raising event for the TF Foundation as a whole (which of course includes TFTA holders).
This is not a bad thing of course, as in 9 months we will become all one again, but if I have a correct comprehension of all this (big IF), then -for me- at least, the upcoming liquidity event is of a different nature then I initially anticipated.
Its seems the penultimate result (strategy) will be that all existing tokens (except for the 70m donated) end up to be in a sort of ‘liquid lock-up’ for another 9 months. I fear that this liquid lock-up will turn out to be a rather solid lock-up in reality.
If the lock-up turns indeed turns out to be solid, then the automatic conversion of all current TFTA’s to TFT at the end of this year, will turn out to be a more challenging event than we might realise. Then effectively we might just have kicked the can down the road.
But, I could be all wrong so I’m eagerly awaiting comments.