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When you stake your ETH or FTM in an ITO, you begin working for its workchain as an agent. The following is an example of how tokens were obtained for a fictional ITO called 'Palos Community'.
Information on the ITO was found on the r/workchains subreddit.
Note the ITO's settings, such as the minimum and maximum amounts that can be obtained, and frequency of work blocks (e.g., every seven days). If the contract code isn't visible and verified with a green icon (such as in this example), it's probably best to take no action. (Here is an example of a contract that cannot be read.)
An amount of ETH was sent to its token address with gas set to 300,000 to avoid errors. If more ETH is sent to the ITO than is allowed, the remainder will be returned to the sending address and can be seen in the internal transactions section of Etherscan.
ITO tokens were automatically returned to the address that staked the ETH.
Each ITO has two addresses. The 'contract' address and the 'token' address. When adding the ITO token as a custom token in MyEtherWallet, for example, you'd enter the ITO's contract address. However, you'd send ETH to the token address.
Now that I have the ITO's tokens I have 3 choices:
Keep the tokens and receive distributions of tokens from other projects (e.g., ERC20 tokens) at the end of each work block. The greater the percentage of the ITO's circulating tokens I own, the greater the percentage my reward distribution will be.
Before I receive my reward distribution, I need to approve of the work performed by the workchain. This is done by adding the first two digits of my wallet address and the number of the day of the month. I then will turn this into an ETH decimal value by adding seven zeros in front of this number.
If my local date is November 5, for example ("5"), and the first two digits of my wallet address are "21" then I will send 0.000000026 ETH to the token address to sign for my distribution.
As an agent, there is no time limit for approving of work. If I missed 83 work blocks and sign for the next, for example, I am approving of the current and all previous work blocks.
Validate jobs. If I want to reward a producer so that he is incentivized to provide more value to the ITO, I could simply send a portion of my tokens to the contract address of the tokens I received as a distribution. My reward does not go to the producer directly. When I validate a job, it simply means that I am increasing the weight of the producer's work reward distribution at the end of the next work block.
If a producer added a batch of HOT tokens, for example, and I appreciated being rewarded with them, I could provide an incentive to the person(s) that added to them to the ITO. Sending just 10 ITO tokens could, in theory, provide the producer with a reward worth hundreds of thousands of dollars if the producer's job is validated more than others.
To validate, I just go to Etherscan and see what tokens my address has received from the ITO.
I click on the down arrow, then click on HOT in the list. This takes me to the HOT token page.
When I send any number of the ITO's tokens to this contract address (as shown above) they will act as a 'vote' for the producer(s) that have added them. The tokens will not be sent to HOT, but will be re-routed back to the ITO contract and rejoin its available supply.
Request a refund. At any time I could interact with the contract to request a refund of my stake. If the ITO has an available supply before I send them back and I receive a refund, it will be at the same rate that I got them at.
Instructions to come! Thanks for your patience 🙂
Refunds will show up in the 'Internal Txns' section of Etherscan.
You can also see refund information in the ERC20 Token Txns section when you click on the transaction in which you sent tokens back.
If the ITO does not have enough available supply to meet demand, I have reached Omega Point.
Omega Point is reached when the demand for ITO tokens has exceeded supply. Agents requesting refunds of their stake will get the current, more favorable rate of exchange as an unsecured loan. This unsecured loan facility acts as a kind of 'golden parachute' for older agents to return ITO tokens to the contract. This can help satisfy the demand of new labor participants and keep the economy healthy and robust, as well as help curtail token oversupply.
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