To preface the reasoning behind the token split, it is important to firstly highlight the initial vision for ARCx from its inception in September of 2020. The initial vision for the ARCx protocol was to become a governance-minimised central bank that issued credit against various DeFi assets through its native stablecoin, STABLEx.
The ARCx Governance Token was designed to be the core mechanism for governance of this system. Since then, we have identified a significant opportunity for Sapphire v3 which requires new incentives and a token split to help foster growth of the DeFi Passport.
In addition to this, many community members take the view that the high unit price per token is negatively affecting discoverability for ARCx - which in turn may hinder adoption of V3.
The Migration Ratio
After an initial discussion in the ARCx Forum and overwhelmingly positive feedback, ARCx will proceed with a 1:10,000 token split. This will result in a total supply of 100,000,000 ARCx Governance Tokens.
As an indication, if you hold 1 ARCx worth $10,000 pre-split, you would get 10,000 ARCx post split, each worth $1.00.
Token Split Mechanics
The token split will be enabled via a migration from the original, or ‘Old ARCx Governance Token’ to the ‘ARCx Governance Token’.
The migration contract will be accessible through the arcx.money website, which will allow Old ARCx token holders to burn their old tokens and mint new ARCx tokens. This contract will run in perpetuity, meaning that there is no risk of a holder missing out on the migration.
The original ARCx Governance Token will be called the ‘Old ARCx Governance Token’ and the new token post-split will simply be referred to as the ARCx Governance Token.
The core function of the ‘post-split’ ARCx Token will be exactly the same - to govern the protocol, and to use it as a tool to incentivise growth and integrations with other protocols.
In order to ensure a healthy market for the new token, incentivised ARCX pairs will have liquidity mining rewards allocated with the final details being finalised in the forum: https://forum.arcx.money/t/incentives-for-arcx-eth-uni-pool/22
Any difference between the two prices can easily be arbitraged out by people migrating from the old token contract to the new one.
For: In favour of the token split
Against: Not in favour of the token split