Poolin Announce Issuance of IOU Tokens to Customers
The poolinWallet team has initiated an IOU issuance exercise that is aimed at mitigating the effects the recent suspension of withdrawals on its platform will have on its customers. This development was announced on the company’s official Medium profile where it was stated that “the tokenomics of the IOU tokens will bring intuitive and various options, and easy-to-use operations”.
Poolin has faced some serious challenges in the recent past which led to the suspension of withdrawals from the platform. Being one of the top Bitcoin mining pools, the prevailing challenges that have plagued the Bitcoin mining industry has had a significant impact on the company. The existing relationship with Chinese users has not also helped the issues confronting Poolin at the moment. It is no secret how the Chinese authorities have cracked down on cryptocurrency activities, especially in the past year.
The highly publicized regulatory challenges of Bitcoin mining companies are one of the primary reasons claimed by Poolin for the challenges it has faced recently. In an earlier post, we reported that the delays in the build-out that the company was facing from a mega-bitcoin mine in Texas form part of the root causes of its problems. The reason given for such delays is the absence of approval to connect to the grid in the state. This has given the company some serious headaches, leading to its failure to meet up with its obligations to users.
Having acknowledged these issues and taking some drastic measures to manage the situation, the company feels that the time is right to begin to soften the ground for its users. In the announcement on Medium, the Poolin team stated that it is working diligently to lift the suspension on the withdrawal as soon as possible. The process adopted by the company is planned to be executed in phases of which the issuance of IOU tokens is one.
The representation of the IOU tokens is in the form of assets held in the assets account of the PoolinWallet. It is also held in the mining pool account of the PoolinMiningPool. The IOU tokens will be issued in six different forms; IOUBTC, IOUETH, IOUUSDT, IOULTC, IOUZEC, and IOUDoge. These new tokens represent the original tokens held by users in the form of BTC, ETH, USDT, LTC, ZEC, and Doge, respectively. They will be issued at a ratio of 1:1 for the number of tokens held by each user.
The timing for the issuance of the IOU tokens has been slated for 4:00 pm, September 15th, 2022 (GMT+8). At this time, the original holdings in BTC, ETH, USDT, LTC, ZEC, and Doge held by users will be replaced completely in both the assets account and the mining pool account of users. The ratio for this replacement as stated earlier is 1:1.
With this substitution, token withdrawal on the platform will be reactivated without any limit to the amount of the issued tokens that can be withdrawn. According to the announcement, users could withdraw their IOU tokens at any time. The withdrawal request will be approved quickly and automatically.
Poolin’s IOU tokens are based on Ethereum’s ERC-20 protocol and are issued on the Ethereum blockchain by PoolinWallet. The fundamental details of the token such as the token address, token symbol, and token decimal of each IOU token are yet to be made public.
The ultimate goal however is to redeem these IOU tokens via a burning process in the long run. Poolin’s IOU token burn is expected to be carried out in batches until all the tokens are redeemed and burned. The ratio of the IOU token to token will remain at 1:1 within the PoolinWallet app.
Among other functions enabled by PoolinWallet using the IOU tokens, users can trade their IOU tokens in a unidirectional swap system with their respective parent tokens. The plan involves increasing the frequency and amount of IOU tokens that can be redeemed with increased liquidity. However, users can withdraw their IOU tokens and trade on-chain, or with third parties where such options are available.