1.1. Policy Oversight
This Seed CX Fork Policy (the "Policy") is maintained and enforced by Seed CX Ltd. ("Seed CX") and each Seed CX subsidiary (collectively "Seed"). By continuing to use any Seed service, you are agreeing to the terms of this policy and consenting to Seed's implementation and application thereof.
The Seed CX Operating Committee (the "Operating Committee") is primarily responsible for the review of digital asset Forks and Airdrops, and determining the position that Seed will take. Seed legal, compliance, business, technical, risk and research staff may be involved in the process of reviewing new digital assets as per the Seed Token Acceptance Framework, or as part of the Legacy Chain Review, but the ultimate authority to define a Legacy Chain and to decide whether a Fork and Airdrop will be supported by Seed, lies with the Operating Committee.
Changes to the Policy must be approved by the Operating Committee.
Airdrop. An "Airdrop" occurs when a digital asset blockchain issues a new digital asset to certain or all public keys or addresses from another blockchain. Private key holders of the receiving blockchain are distributed new digital assets from the Airdropped blockchain to a new private key or address on the distributing blockchain.
Fork. A "Fork" is a permanent change in the consensus algorithm that emerges when a new consensus layer is applied to an existing blockchain. The result is the creation of a new blockchain, which can be significantly different from the original blockchain. Following a Fork, there are usually two, or more, versions of the Forked digital assets, an older version and one that follows the new blockchain consensus. In some cases, the old version is abandoned, and all users and developers update to the new version of the blockchain. In other cases, two digital assets continue to operate independent of one another (e.g., Bitcoin and Bitcoin Cash).
Legacy Chain. The "Legacy Chain" is the digital asset blockchain which is deemed to be the original blockchain from which a Fork is created.
New Chain. The "New Chain" is a digital asset blockchain that is created as part of a Fork. It is a new, independent blockchains continuing forward in place of the previous blockchain, potentially with its own unique consensus mechanism, characteristics, and corresponding digital asset.
1.3. Policy Focus
Forks and Airdrops have become a vehicle for delivering digital assets to holders of existing digital currencies, and many questions have arisen concerning the ownership to and distribution of Forked and Airdropped digital assets. Each Fork or Airdrop faces unique technical, safety, liquidity, and timing challenges. Seed will not make any Fork or Airdrop available to any account holders that is not also supported by its third-party wallet partner. Seed will take into account security, value, technical stability, market capitalization, liquidity, and costs, as well as any other factor Seed deems relevant, in the deployment of this Policy. This document addresses Seed's actions in the event of a Fork or Airdrop relating to any digital asset made available by any Seed entity for custody or market services.
1.4. Supporting a Fork or Airdrop
There are different forms in which Seed may support a forked digital asset. Seed will always aim to offer physical trading of digital assets traded on the platform, but if wallet providers do not offer the Fork or Airdrop, Seed can facilitate other forms of support via financially-settled transactions.
1.4.1. Physical Trading
To allow trading of the physical Fork or Airdrop on a Seed trading venue. See Physical Storage below for the requirements for this.
1.4.2. Financial Trading
To allow trading of financially-settled contracts related to the Fork or Airdrop on a Seed trading venue. This does not require Seed to have the ability to store the physical asset. Financially-settled transactions settle to an index price, so Seed only requires access to pricing data.
1.4.3. Physical Storage
To allow storage of the physical Fork or Airdrop. This requires Seed to have the ability to store the Fork or Airdrop, and therefore must have the ability to generate wallets and interact with the New Chain through its third-party wallet provider, or otherwise. Seed may be restricted by its wallet provider, even if Seed wishes to facilitate storage. In the event that Seed plans to support a Fork or Airdrop, but the wallet infrastructure doesn't support it (e.g. a third party wallet provider does not technically support the new asset), Seed customers will be restricted by this. Seed will use best commercial efforts to provide Forked or Airdropped digital assets to those accounts holding the corresponding digital assets at the time of the Fork or Airdrop.
1.5. Policy Disclaimer
Seed reserves the right to update this policy and the criteria for measuring the viability of a Fork or Airdrop from time to time based on new technological, legal, or environmental factors that may emerge. You agree and understand that Seed is unlikely to support most Forks and Airdrops and that the corresponding digital assets of most Forks and Airdrops will likely not be made available to you. Digital asset values can and do fluctuate substantially, which may result in a total loss of the digital assets held by Seed on your behalf after a Fork or Airdrop. Seed's support of any Forked or Airdropped digital asset by making any such asset available to any account holders depends on third-party wallet providers that are outside of Seed's control. Seed does not own or control any of the protocols or blockchain algorithms of any digital asset, Fork, or Airdrop, and, thus, Seed disclaims all liability relating to protocols or algorithms and any change in value of any digital asset. Seed makes no guarantees regarding the security, functionality, or availability of digital assets and their corresponding protocol, algorithms, or networks. In choosing to support a digital asset, Fork, or Airdrop, Seed is not making any representation of that asset's value, features, safety, or stability. Nothing in this policy, or in the application of this policy, should be deemed an endorsement, recommendation, or repudiation of any digital asset, Fork, or Airdrop.
2. Fork and Airdrop Support Policy
2.1. Review Process
Safety of customer account holdings and stability of Seed systems are Seed's primary concerns in the implementation of this Policy. Seed will monitor developments in all digital assets for announced or planned Forks and Airdrops. For any Fork or Airdrop that Seed believes it may want or need to support, Seed will:
- Research the Fork or Airdrop. Seed aims to deeply understand the context surrounding a Fork or Airdrop, as well as the logistical implications, such as timing and structure.
- Determine if Seed will aim to support the Fork or Airdrop. Seed will determine if the Fork or Airdrop is something to support, and what that support will look like. For this, Seed will monitor any third-party wallet providers for announcements and notices regarding each provider's support of any Fork or Airdrop. Seed will then do a preliminary review the Fork or Airdrop as per the Review Principles listed below. Seed will review the proposed Fork or Airdrop for technical safety, stability, cost of implementation, market capitalization and liquidity. A more formal Token Acceptance Framework review will be implemented later.
- Determine if there is a Legacy Chain, or if a Legacy Chain must be defined. This defines the ticker symbol and the asset that needs a Token Acceptance Framework review.
- Perform a Token Acceptance Framework review.
- Notify all account holders when a decision is made to support any Fork or Airdrop.
- Make available any approved Forked or Airdropped digital asset once Seed systems are able to support the digital asset. Seed shall exercise sole discretion in the method and manor of distribution to any account holders.
Support for and distribution of any Forked or Airdropped digital assets shall be at Seed's sole discretion. For any digital asset held in any Seed account, you have no right, claim, or other privilege to any corresponding digital assets resulting from an unsupported Fork or Airdrop.
2.2. Review Principles
2.2.1. Technical Stability and Security
Seed will not support any Fork or Airdrop where Seed believes that the resulting digital assets are unsafe, vulnerable to attack, or may put Seed systems at risk. Seed will evaluate the technical stability of any proposed Fork or Airdrop. This review will include a detailed look at the technical team behind the Fork or Airdrop, replay and wipe-out-protection, mining capacity or validation mechanisms. Digital assets that are deemed to be vulnerable to a 51% attack may not be accepted by Seed.
2.2.2. Market Capitalization and Liquidity
Seed will not support minor or nominal Forks and Airdrops. In order for Seed to support a digital asset, the asset will need sufficient market capitalization and liquidity. If the asset does not trade on the top-10 exchanges with a sufficient market capitalization, it is unlikely Seed will support the Fork or Airdrop. Additionally, digital assets must be sufficiently available and liquid. Seed will monitor the liquidity of a Forked or Airdropped digital asset on top-tier exchanges. Generally, Seed will consider $25 million in daily trading volume to be indicative of sufficient liquidity.
Supporting new digital assets involves significant overhead for Seed. Some Forked and Airdropped digital assets may be similar to digital assets already supported by Seed, and these will generally involve fewer resources to support. However, if an algorithm is significantly different than those blockchain digital assets already supported by Seed, the costs may be significant. The costs associated with supporting a digital asset will be a factor in Seed's review of all Forks and Airdrops. Seed may decide to support an asset with significant demand, but that support may be delayed due to the costs of such support.
Upcoming Forks and Airdrops are typically announced prior to any distribution of any new digital assets. This notification may be provided days, weeks, or months in advance. Additionally, some Airdrop distributions take place during a short window of time, forcing adoption of the Airdropped asset to be rushed. Reviewing, approving, and supporting new digital assets takes a significant amount of time. Seed's review of a proposed Fork or Airdrop may take longer than the notification period provided or the Airdrop window. Thus, Seed cannot guarantee that any Forked or Airdropped digital asset will be made available at the time the Fork or Airdrop occurs, nor can Seed guarantee that any Airdrop with a window will be made available at all. Seed, at its discretion, may chose to make a Forked or Airdropped digital asset available at any time. digital assets that were rejected may, upon re-review, be accepted. For example, an Airdropped digital asset that failed to meet Seed's market cap requirements may become more popular, and later meet those requirements; or, a Forked digital asset that failed to provide replay protection may later provide such protection through a "soft fork" patch.
Should you wish to access potential Forks or Airdrops, it is your responsibility to purchase any digital asset related to the desired Fork or Airdrop in advance of any planned Fork or Airdrop. Seed, at its sole discretion, may chose a date and time of record for each Fork or Airdrop (typically the date and time of the Fork or Airdrop as recorded on the blockchain of the Forked or Airdropped digital asset). Digital asset purchases must have settled as outline in your Seed agreements and the digital assets must be present in your wallet as of the date and time of record in order to receive the related Forked or Airdropped digital asset(s). If purchases of associated digital assets have not settled and transferred to your wallet as of the date and time of record, Seed does not guarantee that you will have access to, or ownership of, the Forked or Airdropped digital asset. Note that purchases on the same day of a Fork or Airdrop will not clear until the following day and that certain digital assets transfers may take significant time to settle on the blockchain due to high volume or other network issues. Seed does not guarantee any time frame sufficient for a digital asset transaction confirmation and transmission.
2.3. Legacy Chain Review
In all cases where Seed aims to support a Fork, the Operating Committee will be tasked with implementing this Legacy Chain Review. The Operating Committee may, at its own discretion, take a variety of factors into consideration in the implementation of this policy, including each resulting blockchain's network hashing rate, hash rate distribution, height, and average block size. The Operating Committee may also consider non-technical attributes, such as the greater market response, competitors' responses, wallet partners' actions, and regulatory reactions and opinions.
2.3.1. A Clear Legacy Chain Exists
If the Operating Committee determines that there is a clear Legacy Chain with a New Chain and new digital asset being formed, such as the case of Bitcoin and Bitcoin Cash, then the Operating Committee must only review the New Chain and its new asset in the context of approving a new digital asset. The Legacy Chain will retain the legacy asset name (e.g., Bitcoin) and market identifier (e.g., BTC). The New Chain will be listed with a new name (e.g., Bitcoin Cash) and market identifier (e.g., BCH).
Seed legal and compliance staff will apply the Seed Token Acceptance Framework to each resulting Forked or Airdropped digital asset in order to determine whether such digital asset will be supported.
2.3.2. No Clear Legacy Chain Exists
When there is no clear Legacy Chain, such as the case of Bitcoin Cash ABC and Bitcoin Cash SV, the Operating Committee will monitor and review the technical and and non-technical aspects of each resulting blockchain and will also review the Token Acceptance Framework for each resulting Forked digital asset. The Operating Committee, in its sole discretion, will then determine which blockchain and corresponding digital asset is deemed to be the Legacy Chain and which is a New Chain. Once determined, the Operating Committee will review the New Chain under the Token Acceptance Framework and determine whether it will be supported as a new asset, in which case the Fork or Airdrop will become available to Seed participants.
The Operating Committee reserves the right to revisit any decision made pursuant to this policy should technical or market conditions change over time.
2.3.3. Legacy Chain Review Disclaimer
Seed disclaims all liability relating to any decision made pursuant to this policy. You agree that the implementation of this policy is left to Seed's discretion. You also agree and acknowledge that technical and non-technical aspects of each blockchain are subject to change and that there is no way to predict the greater market or technical support for any Fork following any decision made by Seed or the Operating Committee. Seed is not responsible or liable for any changes in support or value of any digital asset following any decisions made pursuant to this policy.
3. Effect on Open Digital Asset Contracts
In the case of any contract wherein a specific kind(s) and amount(s) of any digital asset is to be delivered at a future date (e.g., forward contracts) entered by Seed participants through the Seed SEF market, the party who is required to deliver pursuant to the terms of the contract will deliver only those assets contracted for (the "Deliverable Asset"). Unless the contract specifies otherwise, the receiving party is not entitled to any Airdropped digital asset associated with the contracted for digital asset that may be distributed between the date the contract was entered and the date of delivery.
In the case of any Fork, the Deliverable Asset shall be the digital asset maintained by the Legacy Chain, as designated in accordance with the Legacy Chain Review above. The New Chain and its asset will not be part of the delivery obligation.