A long hard think about the escrow features of the Mark Pesce Token has led me to understand that we need a ‘stablecoin’ – a cryptocurrency whose value is pegged to a state-backed currency. Why? Read this Medium post to learn more.
Adviser Ratings has just published a short introduction to smart contracts I’ve written for their monthly newsletter. MPT is a type of a smart contract – so you’ll be hearing heaps from me as we move to the public sale about the ins and outs of how they work, what they can do – and where they fall short.
Was lucky enough to get some great questions from Jarrad Lawrence, which he’s allowed me to share, together with my answers.
The questions are in italics.
Change in term allows swap to new token. Does this change in token reset either the 12 month escrow, the 60 month redemption window or the cancellation window? Will there be a forced move to new token? How will I be notified and opt-in to changes? (I understand that this is a rapidly evolving idea but I feel like I would want more clarity around this mechanism)
The offer to ‘upgrade’ to a newer version of the token does not reset the escrow/cancellation/refund period nor the 60 month redemption period. All of these carry over from the original token.
Escrow holder details Who is the escrow holder? Are the funds insured eg if the funds are hacked or misappropriated will the token holder still be able to cancel and expect return of funds? (Without this information could give ugly situation if the escrow company is hacked etc)
Escrow is the basic example of how a smart contract works; in short, the funds are only released when both parties agree. In the case of the MPT smart contract, the escrow is held within the smart contract itself. There is no need for any third-party escrow holder.
Token number the issuance and pricing of tokens is based upon a finite number of hours in a year. Are the total number of tokens restricted to this same number or could you double book an entire year? (Also gives me an understanding that if you can sell 3 years worth of hours as MPT I might have trouble getting access rapidly)
My plan is to sell far fewer MPT than I have available hours. While up to 7200 tokens could be sold per annum, the actual number sold will be substantially less.
It has been suggested that I could presell the next twenty-five years of my labour. I don’t feel any need to do that, and wouldn’t even consider selling a substantial number of MPT until the smart contract is well-developed and has had a fair degree of real-world testing.
Professional services do you agree to not provide professional services for a price less than the MPT or could I contract you external to the MPT and get a better rate? (From a customer perspective it would provide further comfort to know that you aren’t offering the same services elsewhere cheaper – similar to Apple’s pricing for books etc)
I make no representation that the price others pay for my labour is always going to be equal to or greater than the price of MPT.
Does not include endorsement. Although you have excluded endorsement there is wiggle room around confirmation that Mark worked/advised on project. It’s a grey area but if I wanted to circumvent this rule I would take the angle that you advised on the project. (May want to including a second clause post this that states ‘no reference to Mark’s involvement, consultation or advise on anything through redemption of MPT is to be made either publicly or privately without written consent by Mark’)
Wiggle room is precisely where lawyers earn money writing cease-and-desist letters. I will be zealous in enforcing that term, wherein hangs my professional reputation. Just because I’ve spent time with you and your project does not mean I endorse either you or that project.
Rule 1: token may not be exchanged (wholly or partly for cash). Can I exchange ownership for nil value? Can I purchase the right to the use of a token, not not the ownership transfer? (Eg can I pay person C to direct you to work with me for $$ without taking ownership? If person C had booked months ago would this allow me to jump the queue? I recognise this is probably splitting hairs, but hey that’s what rules do to people – inspire them to bend or brake them)
This is a good question; common sense would apply here, but I’ll check to see if we need to add any specific language.
Rule 4: Fraud is ambiguous. As per Rule 1 above this may not capture any other attempt to circumvent or game clauses contained with the contract. (Might suggest any attempt to commit fraud or circumvent any other clause can lead to forfeit ownership of all tokens, funds and escrowed funds to any and all parties involved. Subject to Mark’s judgement as final. The reason I suggested any and all parties is that if I am attempting to misuse an tokens or transfer there is normally two parties involved so just seems a better catch all).
It is my understanding that – in the legal sense – fraud is an unambiguous term. If I make a poor ruling about what constitutes fraud, that would reflect poorly, so it is up to me to be careful about that.