Focus on economic policy and incentives aligned with long-term growth and transparency
August 1, 2019
The Algorand Foundation’s mission is to promote the long-term success of the public blockchain network and the Algo token. By introducing an early redemption option, we are giving auction participants an early optional opportunity to redeem the refund above the current value of the Algo. In response to feedback from the market, the foundation is seeking to strengthen the long-term viability and fairness within the Algo market for remaining participants who are taking a longer-term view and who wish to contribute to building out the Algorand platform.
Accordingly, as an alternative to the original 90% refund option available to auction buyers on the first anniversary of the first auction, the foundation will provide an optional Early Redemption Option in an effort to take these specific auction tokens out of circulating supply. In this option, a user who bought #X Algos at the first auction can return all #X of them to the foundation in this coming week and receive 85% (recognizing the effect of the time value of money) of the price paid to acquire them.
In order to meet eligibility requirements, participants will have seven days to return all auction Algos to their designated wallet starting at 8am SGT on August 2nd, 2019 and ending at midnight SGT on August 9th, 2019. The redemption window will open on August 23rd and will provide an 85% refund of the clearing price at the first auction. Refunds will be dispersed via the same currency the auction account was funded by (USD, BTC, ETH).
Early Redemption Window Details
All Algos intended for redemption must be in the wallet that received Algos from successful auction bids by midnight SGT on August 9th, 2019.
Redemption processing window will be seven days starting at midnight SGT on August 23rd, 2019.
Redemptions must be initiated via the Algorand Foundation auction website and your auction account. Additional details to come to eligible early redemption window participants.
The Algorand Foundation will refund 85% of the auction clearing price per Algo returned
If you funded your auction account with USD, refunds will be processed in 1-3 days (determined by the time required for bank wire transfer);
If you funded your auction account with BTC or ETH, refunds will be processed within three hours.
Early Redemption Window Requirements
100% of Algos received at auction for a single address must be returned - no partial refunds will be eligible
All Algos must be in the wallet that received Algos from successful auction bids by midnight SGT on August 9th, 2019 or you will not be eligible to participate in the early redemption window
Redemptions must be initiated from the auction website and your original auction account. Additional details to come to eligible early redemption window participants.
Participants in this optional early redemption program agree to waive their rights to their original 90% refund policy.
Next Steps to Participate in Early Redemption:
Ensure that by midnight SGT on August 9th, 2019, your designated auction wallet has the same number of Algos as you received from the original auction.
Original Refund Policy
Participants may retain the original Refund Policy of 90%. This means that auction participants can continue to retain their Algos and have the option of participating in the original refund policy in June 2020, where they will have a one-week window to exercise the 90% refund of the June 2019 auction purchase price. Details on exercising this option will be available approaching June 2020.
About the Algorand Foundation
The Algorand Foundation is providing the trusted infrastructure needed to support the growth of a borderless economy. With research led by Dr. Tal Rabin, a 2018 Forbes World Top 50 Women in Tech, the Algorand Foundation is incorporated in the Republic of Singapore.
For more information, visit algorand.foundation.
Points of clarification can be found below. For more specific questions, please reach out to [email protected]
What exact wallet should Algos be put back into?
You must send Algos back to the same address which you received Algos to after your successful auction bid. If you are unsure of the proper address, you should have received an email from the Algorand Foundation that contains the number of Algos you received in total and the address which received them. If you have not and need further clarification on this, please email [email protected]
Can you return Algos bought at market instead of the ones acquired at auction, if you were an auction participant?
Yes. The refund policy does not require returning the same Algos that were received from the auction.
In what format and currency will the 85% be returned to me in?
As detailed in the terms and conditions that were agreed to at the auction, the refund is denominated in USD. You will get 85% of the USD clearing price per Algo deposited into your auctions account (also known as the USD wallet). When you ask to withdraw the USD from your USD wallet, it will be converted to your original currency automatically.
Participant funds their auction account with 4ETH for a total USD value of $1008 ($252/ETH)
Participant bids all $1008 at auction and the bid is successful
Auction clearing price is $2.40 and Participant receives 420 Algos
Participant accept the early redemption window
USD refund value per Algo is $2.40 * 85% = 2.04
Total refund due to participant is $2.04 * 420 Algos = $856.8
Value of ETH at time of refund is $200
Refund in ETH is 4.284 less conversion fees incurred by the Foundation changing USD into ETH
If I paid in ETH or BTC what are the conversion fees that are subtracted from the refund when the Foundation converts USD back into ETH or BTC?
The Foundation uses a 3rd party to do the conversion which carries a flat fee of 0.25%
The exchange rate is set relative to the spot price at https://tradeblock.com/markets/index as of the moment in time that a user requests such rate:
Refund <= $100,000: the exchange rate will be within 1%
$100,000 < Refund <=$500,000: the exchange rate will be within 1.5%
$500,000 <= Refund: the exchange rate will be within 2.0%
What happens if I put more Algos in my auction wallet than I qualify to receive a refund on? Ie, more Algos than I received at Auction?
You can have as many Algos in your Algorand wallet as you please. The amount of Algos in your auction wallet must be equal to or greater than what you received from the successful auction bid in order to be eligible for the early redemption.
At a future date, and to participate in the early redemption, you will be asked to send the exact amount of Algos you received at auction to address that will be provided. If there are any overages sent, they will be returned back.
Are pending rewards counted in the staking balance for the 200 million Algo Staking Rewards Program?
No, pending rewards are excluded from this program.