AIP2: Token Split Discussion

Hi all,

In preparation for Sapphire V3, we wanted to take the chance to explore the idea of a token split with the ARCx community and token holders.

To preface this discussion, it is pertinent to note that ARCx’s vision during V2 of the protocol was to become a governance-minimised central bank that issued credit against various DeFi assets through its native stable coin, STABLEx. The ARCx Governance Token was designed to be the core mechanism for governance of this system.

Since then, we have identified a significant opportunity for Sapphire v3 which requires new incentives to help foster growth of the DeFi Passport. In addition to this, we and many other community members take the view that the high token price is negatively affecting discoverability for ARCx - which in turn may hinder adoption of V3.

With this in mind, we would like to propose a 1:10,000 token split - resulting in a maximum supply of 100,000,000 ARCx Governance Tokens. As an indication, if you hold 1 ARCx worth $7,000 pre-split, you would get 10,000 ARCx post split, each worth $0.70. The core function of the ‘post-split’ ARCx Token would still be to govern the protocol, and use it as a tool to incentivise growth and integrations with other protocols.

It would be great to get community feedback on this prior to moving to a snapshot vote.

Thank you.

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A lower price seems more accessible for new investors, but liquidity is the real issue. I personally like the novelty of a low supply, but can get on board with a split if it will lower the barrier to buyers/partners.

A 1:1,000 or 1:100 ($7 or $70) would be preferred, because a token <$1 just feels like a shitcoin.

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Noted Ace - thanks for the feedback.

If any other community members would prefer 1:1000 or 1:100 - please signal your support.

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I disagree with Ace on this I’m on the opposite, I think we should go 1:100000 instead, assuming long term vision of Arcx is go top 100, and assuming we don’t want to do another tokensplit, if we go to $0.07 at 1b market cap the price of a token will be $7, which I think is a reasonable buy in the eyes of retail as well. if we go $7 or even $70 we are looking at $700-7k per token at the same stage. Retail will be reluctant to buy at that price.

Long term vision says the greater the split the better for the project.

Im all in favor of a token split. I do like the idea of the token being super low in supply but it just seems theres always gonna be some psychological thing for most people to view an expensive token as to expensive regardless of circulating supply. I actually agree with Mahalleinir but either way i feel like a split needs to happen. Ive been around since KYF1 and all i want is to see this project succeed.

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I fully support the suggested 1:10,000 split. I do not support a lower split ratio because the whole point of the split is to make the price more accessible to investors. Even a 100,000 to 1 split would be reasonable here.

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1:100000 is too extreme in my opinion.

The intention here is to strike a balance between retail accessibility/discoverability without damaging the brand. Projects optimising for extremely low token prices are playing short term games, which will not end well.

Fair points. Then 1:10,000 split seems right to me. at current prices, it would mean $0.65 per ARCX which seems like a good starting point for new investors.

I understand your argument that we do not want to damage the brand but at the same time we cannot the fact that pumpementals play a significant role in the ecosystem.

I personally do not believe going 1:100000 is too extreme, as long term it has strength and short term in achieves the goal of expanding the reach of Arcx and the DeFi passport ideology. 1 billion tokens isn’t huge in comparison to other tokens in the top 100. At the same time $0.07 is a good price point for people to discuss the project and do AMAs. More accessible than the other suggested prices but not crazy like the shitcoins that print 1 quad tokens these days.

At least let us no go any less than 1:10000 split, this will ultimately go to a vote correct?

My vote:

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My vote is YES as well.

1:10,000 :heavy_plus_sign::one: from me
Thinking about target price here: $0.10 to $1.00 starting point seems ideal to me. $0.07 cents (or $0.007) comes to a point where devaluation/maturation is harder to wrap your head around (see: “xx to $1” or “xx to $10” taglines; never “xx to $0.10” or “xx to $0.01”)

The ideal split is pseudo-sociology or psychology… It’s an art, not a science

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support Token Split.

Uh, your math is off. 1:1000 translate to about $10. If you want a price target of $0.10-$1.00 starting point, you would agree with the proposed 1:10,000 split.

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Please do it as quickly as possible。

TL;DR: Overall I recommend an area around 1:10,000.

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First and foremost I really like the idea of an token split. As we have seen and already been mentioned on Twitter, A lot of people request such a split for YFI as well. We are still speaking about an investment vehicle even though it’s a government token so the economic perspective should be taken into account. Higher economic value result in more accessible funds for the development. Therefore we cannot ignore this.

As we have seen in the past, people are scared to invest in projects with very high prices per unit because people want to own a certain amount/bunch of their investment. The best example to mention is XRP and ADA. So from this perspective I definitely support the token split.

Speaking about the ratio I cannot recommend choosing 1:100 or 1:1000, simply because our market cap is so tiny that we will reach a point very fast, where a second split should be taken into account. To avoid this - and with reference to the before mentioned attractiveness of smaller units - I would definitely choose a ratio ratio of 1:10,000. Assuming the market cap of $500 million, we would end up with a price of $5 which is reasonable for mid & long term.

Also from the negative perspective, when the market will slump and we will see -90% correction, with $0.50, we are still fine.

Ultimately speaking about a governance token, It’s core aspect is about governance. A good governance system is present, the more people participate in and are part of it. Therefore the more people can afford the governance token bc they want to back the firm and it’s idea, the broader, healthier and more stable the governance system is. Resulting in more valuable ideas and concepts.

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I think the split should be done so the price right now is in double decimals

I support 1:10,000 token split.
There’s no right answer for the this but I think this level is the moderate level.

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I fully support the idea of a 1:10000 token split.
This will be a great move for new investors, as psychology plays an important role and many are not ready to buy at the current price.

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I am onboard to either 1:10000 or 1:100000, thinking about being on top 100

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