On Christmas Eve, anyone who had spent money on OpenSea was entitled to redeem a free token, developed at Ethereum , called SOS, and the amount of SOS they would earn was determined by how much money they had spent on non-fungible tokens (or NFTs, the acronym in English) on OpenSea.
On Sunday (26), around 240,000 people had redeemed the token which, in turn, fired more than 1,000% in value.
The tokens were not distributed by the NFT marketplace itself, but by OpenDAO, an independent decentralized (or DAO) independent organization that claims to use some of the tokens it had reserved for itself to compensate OpenSea users for scams and to support the growing NFT industry .
Although the cryptoactive industry is saturated with free distributions (or “airdrops”) and meme tokens , the SOS distribution has exploded. On Christmas Day, it was the highest performing token on the CoinMarketCap website, as its price rose faster than any other weird shitcoin.
By Sunday, the token had reached a market capitalization of $321 million. His channel on Discord has about 50,000 members and 100,000 people are following OpenDAO on Twitter .
SOS's market capitalization was not a green, vertical line: since then, the token's capitalization has dropped to $252 million , down 12.6% from its record high.
How to rescue SOS
The number of SOS tokens you can redeem depends on how much you used OpeSea, the most popular market for trading NFTs. The more you traded on the platform, the more SOS tokens you can redeem.
To redeem SOS, go to the OpenDAO website , connect your cryptocurrency wallet and click on “initiate claim” (or “initiate redemption”). OpenDAO supports MetaMask, Coinbase Wallet and WalletConnect.
The site will estimate your reward by calculating how much DAI, ETH or USDC you spent on OpenSea. This number will be made up of a multiplier and the subtotal will be multiplied again by the number of transactions you processed in OpenSea.
OpenDAO calculates how many SOS tokens to give you based on your transactions before December 23rd. Any transactions processed on OpenSea after this date are not taken into account.
“The numbers are not always accurate. “It claimed that I spent more than 8 ETH when [that amount] matches how much I sold, not how much I spent,” an anonymous investor told Decrypt.
You will have to pay a gas fee on Ethereum to redeem your tokens; the rate, called in ether (ETH), will depend on how congested the Ethereum network is.
But take your time: if you are eligible to receive the tokens, you will have until June 30, 2022 to do so. After that date, unredeemed tokens will be sent to DAO's treasury.
When redeemed, tokens will be sent to your Ethereum address. If you have connected to OpenDAO with MetaMask, you can add the SOS token to your wallet by clicking the “Add SOS” button on the side of the page.
A few days after its creation, big brokers such as OKEx , Huobi Global and Gate.io listed the token.
You can trade it at decentralized brokers such as Uniswap, or become a liquidity provider to get a share of the transaction fees in an automated market formation protocol (or AMM).
An anonymous developer named 9x9x9 created OpenDAO.
The programmer, who is also developing a DAO called 721DAO , claimed he was not paid for creating OpenDAO, but he didn't need to: according to Etherscan, the 9x9x9 Ethereum account has more than $800K in SOS tokens and so does the developer owns $10 million in XSUSHI tokens that generate interest on the Aave protocol.
SOS tok economics
The OpenDAO website claims there will be a total of 100 trillion SOS tokens. Half were directed to distribution. Another 20% will be issued as staking incentives and another 10% will encourage liquidity providers (or LPs).
The two votes proposed by the anonymous creator of the project determined how the protocol will apportion the incentives: staking incentives will be spread over a year and token holders have decided that it will take two years to empty the DAO of incentives for LPs.
The remaining 20% will go to the OpenDAO protocol. The protocol will compensate victims of scams on OpenSea, support NFT artists and communities, and provide money to developers.
It is likely that these decisions will be made via Snapshot, the same voting site that determined the rewards for stakers and LPs.
There is still no development roadmap (or “roadmap”) for the project. Why?
9x9x9, one of DAO's anonymous contributors, stated on Discord: “Because it's a DAO. We are currently setting up DAO (getting candidates for multi-subscriptions). It is not a COMPANY with a DEVELOPMENT ROADMAP. Decisions are being made by all $SOS holders”.
It is important to mention that OpenDAO should not be confused with a stablecoin issuing protocol of the same name, nor any of the schemes or NFTs that claim to be associated with the project.
Is the SOS token legitimate?
Many have asked this question and the Ethereum community is busy and “tweaking” the code. Some, like self-employed contract detective “0xQuit”, found few problems with the code.
He tweeted that SOS is “safe to rescue and trade. There is nothing out of the ordinary hidden in the contract.”
Others, like “fabdaRice”, found warning signs in the code.
First, they found that half of all tokens are stored in three external accounts: "That is, the team can, at any time, zero all liquidity or be at risk of having a compromised central point of failure."
FabdaRice also found that the contract redemption function allows developers to “grant any arbitrary amount of $SOS to any arbitrary wallet by simply generating 'valid subscriptions'”, without anyone “getting to differentiate valid from invalid redemptions”.
But 0xQuit claims that FabdaRice's concerns are about the token's viability, not its security.
"While it's true that developers can forge a signature to issue SOS to themselves, they can't do that to, say, steal your SOS or anything else from your wallet," 0xQuit told Decrypt via private message on Twitter.
“When it comes to money theft/carpet pulling, this is another orange flag in that regard. I think it unlikely that they would (or would have the ability) to use this means to allocate coins themselves. There are much easier ways to change your own protocol, for example.”
If developers forge subscriptions to allocate more coins for themselves, 0xQuit says they would either hit the maximum supply, blocking people from redeeming tokens "so we know they've done it" or "basically taking an advance on the tokens that are returned to DAO".
The 9x9x9 creator responded to what he called the “FUD [Fear, Uncertainty and Doubt] of Autonomous Contracts” on Discord: “[The] only thing developers can/will do is move unredeemed $SOS on June 30 to DAO. With [the] ability to do it, 'fudders' will always criticize that it's not perfect. But life isn't perfect. All we can do is always try to be better.”
The project outlook has already voted in favor of blocking 30% of tokens for at least a year and the team is in the process of finding reputable holders for their multi-signature wallets. Anyone can apply.
That said, with just two votes in favor so far, there is nothing to suggest that the DAO can definitely sustain its dynamism and develop a fully functional DAO that will achieve its goals.
Did OpenSea really need the help of a DAO?
In many ways, SOS's popularity is a response to requests that OpenSea release a token.
Popular crypto projects such as Uniswap, Compound and Aave have distributed governance tokens to people who have used their platform and many traders are impatient for OpenSea to do the same.
OpenSea is a company, not a protocol, and has no reason to decentralize in the same way that protocols like Uniswap and Compound did.
That said, the OpenSea community really wants an OpenSea token. Newly appointed chief financial officer Brian Roberts came under fire this month for suggesting plans to launch an initial public offering (or IPO).
Selling shares on the stock market would distribute OpenSea's governance to wealthy shareholders rather than community members. OpenSea said its "intentions were misinterpreted".
Independent DAOs such as OpenDAO can use governance mechanisms to do things akin to an OpenSea governance token, such as allowing the community to determine which projects the DAO should fund or how scheme victims can be compensated.
*Translated and edited by Daniela Pereira do Nascimento with permission from Decrypt.co .
The post Everything you need to know about the SOS token that rewards OpenSea users first appeared on the Bitcoin Portal .