After an incredible saga of botched press announcements, half-truths and what not, the much-vaunted cryptocurrency project Tezos—which hasn’t even launched yet—is set to fork.
The Tezos project is quite a sensational dark story for those who decided to pitch their money in it. Never a day passes by without some sort of bad news or a statement that sends its investors into disarray. Tezos has been described as being its own soap opera, and, with the recent development that it looks quite likely to fork before it hasn’t even launched yet, is not quite unexpected, although it’s certainly a very odd development.
nTezos recently made its appearance on social media, promising to share Tezos’s open source code but without the Know-Your-Customer (KYC) protocols and minus the founders’ rewards. On its website, the new project describes itself as “an independent and self-governing network running the Tezos software.”
nTezos’s token allocation will follow the original Tezos fundraiser terms, except for the Tezos Foundation allocation. Likewise, there will be no “special rewards,” aka premine funds, for people leading the nTezos effort. Early contributors and contractors to the project get to keep their tokens and vesting schedule.
The new project promises an alternative structure, with veto rights for a year, using on-chain voting. Under this structure, the Tezos Foundation will lose its veto powers and its token allocation “will be locked and spent at the community’s discretion.”
There will be no "premine" (= special rewards for the people spearheading the nTezos effort) nor ICO contributions to manage, and of course no KYC. Anyone will be able to audit the genesis block themselves to make sure of that.
— ntezos (@ntezos) June 11, 2018
There were several reasons that could have caused the acrimonious fork; however, it appeared that the enforced KYC had been the straw that broke the camel’s back. With the split, the much suffering Tezos token holders now have a choice of blockchains to subscribe to, or they could simply hedge their bets and get their tokens from both chains. However, if token holders wanted to preserve their anonymity, they would probably have to refrain from claiming tokens on the parent chain since its enforced KYC policy would mean they could be identified on the nTezos chain.
It seems such a long away when in the summer of 2017 when ICOs were all the rage and everyone was jumping on the bandwagon, where KYC was only optional. Several crowdsales, like Tezos, didn’t even consider it, but so much has happened since then, resulting in the project enforcing the policy.
In an email to token holders, the Tezos team said that while they “personally oppose the unnecessary collection of personal information,” it is also “important to comply with a rapidly evolving regulatory landscape.” As such, a KYC and anti-money laundering (AML) check “is the best way forward.”
— Tezos Foundation (@TezosFoundation) June 10, 2018
Without completing the KYC process, Tezos owners cannot claim their tokens. And since that stipulation was not in place last year, participant investors are understandably pretty miffed. Even the original Tezos owner Arthur Breitman is quite annoyed at the policy, declaring on Reddit that KYC was “not my call.”
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