Blockchain DAppsOmni-Layer

“Blockchain Facebook” Synereo Raises $126k in Crowdsale, Reports Double Token Allocation Error

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Blockchain-based social network Synereo recently revealed that all proprietary tokens, called AMPs, purchased during the crowdsale were being made available to the backers.

Moreover, Synereo raised a modest $126,023 by selling 22,719,689 AMPs, but ultimately was allocating 45,439,378 AMPs.

Hosted on the Bitcoin-based asset creation platform Omni Layer, the AMPs are reportedly now tradable on MasterXchange.

The sale however encountered some technical errors in the crowdsale process, according to the team behind Synereo. Although the price during the sale averaged 182 AMPs per dollar, some users using Omni Layer wallets received exactly double payment in AMPS.

The Synereo team stated on its blog:

Due to technical issues (see below), a few AMP transmissions were carried out twice during the distribution. The nature of the Bitcoin protocol is that transactions are irreversible, and these tokens could not have been retrieved.

This is, of course, unfair towards our supporters that were not lucky enough to receive these extra tokens, and so we have distributed that same amount to everyone who’s participated in the crowdsale. This is a move that would essentially halve the price of each AMP – while providing all crowdsale participants with twice the amount.

In order to issue double the tokens to all other existing AMP wallets and ensure that all backers receive the same value of AMPs, Synereo has turned to Craig Sellars, our Omni Layer (formerly Mastercoin) trustee who holds the power to issue tokens.

This way, everyone receives the exact same value of AMPs, and the total value and “market cap” of existing tokens remain exactly the same; the change becomes one in name only, and everyone gets the exact fair share of AMPs.

Sellars, Co-founder and CTO of Tether and Technologist for Omni, determined that the following options were available:

  1. Reach out to each user and request that they send back the extra AMPs, hoping to minimize the damage.
  2. Grant additional tokens to the other crowdsale participants to match the extra amount received by some participants, such that everyone received the increased amount.
  3. Issue additional Synereo AMPs, bringing the total circulation to 2,000,000,000 instead of the originally intended 1,000,000,000, and also do #2 above.

Sellars and Synereo both agreed that the third option of issuing additional tokens was the best, as Sellars stated:

….all crowdsale participants have received what amounts to 2x the number of Synereo AMPs than originally purchased, each valued at half the dollar price. All other wallets have been allocated 2x their original number as well, maintaining similar value across the board.

I believe that the course of action chosen represents the best interests of the crowdsale participants – alleviating the problem caused by the technical error. This is why I’ve decided to authorize the issuance of these tokens, and will proceed to doing so immediately.

As always, you can follow this process as well as keep track of the entire amount of AMPs and their allocation to Synereo’s public wallets through the omnichest service.

I will follow the original course of action committed by the Synereo team, and will agree to destroy the remaining Synereo AMPs set aside for the crowdsale as originally intended.

Launched on March 23rd, Synereo reported in the midst of the sale that it was forced to change some crowdsale rules as a result of insufficient demand. One rule change was that the price of the AMP tokens would not stay the same and instead would change through the course of the crowdsale. The other rule change was that all coins allocated and not sold will be destroyed rather than returned to their wallet pool.

After the crowdsale. Synereo reported that 139,360,622 AMP tokens would be “destroyed”.

The founders of Synereo say they are building a decentralized social network that is owned by the users, controlled by no one, and secured from spies, governments and marketing agencies.

Journalist, policy analyst, and evangelist of new, disruptive technologies including big data analytics, Internet of Things, and cryptocurrencies. Internet industry veteran with regional c-suite experience, and journalist credentials earned at internet.com, Internet World magazine, and Mecklermedia Corporation.
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