Some, ok many, people joining the EOS Slack channel are:
extremely confused by the Token Purchase Agreement. It basically says that Block.One will develop EOS, but that they won't launch it and any third party may launch it... then further down it says the ERC20 tokens we are buying in this ICO will NOT be transferable to the EOS platform and "may have no value"... Uhh... WHAT?!?!
It even says Block.One is NOT launching the EOS platform. 7.1. No Rights, Functionality or Features. EOS Tokens have no rights, uses, purpose, attributes, functionalities or features, express or implied. EOS Tokens do not entitle holders to participate on the EOS Platform, even if the EOS Platform is launched and the EOS.IO Software’s development is finished and the EOS.IO Software is adopted and implemented.
This is most likely to separate legal risk from the company.
Once the software is ready, they can have anyone, in any jurisdiction, launch it from their basement.
The genesis block will (most likely) reflect a 1 for 1 distribution of ERC20 tokens to EOS tokens. Otherwise someone will just fork EOS and launch it with the proper, investor/donator backed distribution/Genesis Block.
Government regulations give very little choice.
If you read the agreement, it says EXACTLY that the tokens will NOT be transferable to the EOS platform and in fact will be frozen (aka. unusable) after the ICO is over.
EOS TOKENS MAY HAVE NO VALUE. 7.9. EOS Tokens Will Become Non-Transferable. Buyer acknowledges and understands that EOS Tokens will become non-transferrable within forty-eight (48) hours after the end of the EOS Distribution Period. At this time, Buyer will no longer be able to map a public key to Buyer’s account and Buyer will not be able to transfer EOS Tokens on the Ethereum blockchain.
Technically, they won't be transferring the tokens chain to chain, from Ethereum to EOS. They will be creating new tokens on the new EOS chain BASED OFF OF the token ownership of the ERC-20 token (on the ethereum chain).
They are taking a snapshot of the state of the ledger and building the EOS Genesis Block out of that snapshot of ownership.
There is nothing new here for the people that have been following the BitShares community since 2013. This type of thing has happened successfully many times before with Protoshares (PTS), Angelshares (AGS), Muse (Previously NOTEs, now MUSE) to name but a few.
This appears to require trust… And crypto is all about NOT trusting monkeys. But monkeys need to launch the stuff before robots can keep it going all trustless and whatnot. Trust is always required with the early days of development.
Why would block.one put out such an extremely one sided Purchase Agreement? I mean, it is pretty much ridiculous. It essentially says: "If you give us money, you will get tokens that are guaranteed not to be used on the platform we are developing."
Because if they launch EOS with only Dan and Block.one as shareholders, we could fork EOS and our new network WOULD have the proper Genesis Block.
Distributed software can and will be forked.
EOS without a distributed stake/ownership is worthless. One of the goals of this type of ICO is in fact to distribute the power of the network more effectively than what has been tried up to date.
Madness yes... but only on paper
I ABSOLUTELY agree with everyone losing their minds at the Purchase Agreement. It appears to be madness and it says black on white that we are buying useless crap. What I’m saying here is WHY it is written like that. In a nutshell: Governments make everything financial illegal.
Consider prostitution
It is way more dangerous for both the prostitute and the John to interact when their binding contract is legally unenforceable. In some jurisdiction with legal grey zones (think brothels), a John/customer steps into a room and says something like:
-Ok so I’m paying 200$ for a “massage” right?
If the prostitute does not do the implied work (going beyond a mere back rub), the dissatisfied customer can not take legal action because their agreement states a massage only.
We, future investors, are in the position of the John. Those on Slack that have no idea laws and regulations complicate the hell out of everything are essentially saying "There's not chance in hell I'm paying 200$ for a massage!"
I apologize (of course I don't) if this analogy offends anyone.
The FAQ reads like an exact opposite of the Purchase Agreement
FAQ = Hey we're going to launch this thing as fairly as possible. Purchase Agreement = YOU GET NOTHING!
If you read between the lines of the Purchase Agreement it equals “THIS IS HOW WE DELIVER WORLD SHATTERING SOFTWARE WHILE AVOIDING PRISON!” (or at least an ankle bracelet!)
As I stated above, it is 100% correct that “YOU GET NOTHING!” from Block.one. All we are doing is giving Block.one funds to develop software. Then someone can launch said software and can either use the snapshot (taken 48 hours after “ICO” finishes) to distribute stake (and be successful) or launch his own distribution (which will fail to get adopted).
So the risk is on paper. It’s a LEGAL risk. But the risk from a Human Action and/or game theory perspective is very low.
Couldn’t someone else launch EOS and screw us all?
Someone else could launch the chain with another distribution. But consider this scenario:
Whales can send 200$ to some dude with the tech skills to launch the proper chain with proper distribution of stake. EVERYONE involved in this ICO would see this as the legitimate chain. This is why I’m personally comfortable with the "YOU GET NOTHING" Purchase Agreement.
TL;DR
- Block one is legally protecting themselves from the biggest threat. Regulators. How? By only developing software.
- SOMEONE ELSE, it doesn’t matter who - my cousin bob and his Nigerian prince buddy in Satoshi’s attic - will launch an OPEN SOURCED piece of software (open to view at least)
- Those launching the software can make a Genesis Block that is:
- A 1 to 1 ratio EOS to ERC20 token, or
- Give all stake to Satoshi, Bob and his Nigerian cousin
Which do you think will have a solid distribution? Option 1 or 2?
Which do you think exchanges will include on their trading platforms?
Which do you think will have Great Success?
Essentially, what protects you is this Rihanna song: fork fork fork fork fork