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PRE-ICO Tokens Migration Conditions

Keeping our investors happy is one of the main priorities for SONM team.

In regard to the recent Ethereum leapfrog we found ourselves in a difficult situation. The initial maximum ICO cap was set at 273 399 ETH which became irrational when 1 ETH reached 350$. We had to reduce the cap and at the same time to make sure the new token distribution model meets the interests of all parties involved: both pre-ICO and ICO investors.

On April 15th we conducted the pre-ICO with SPT tokens, 1 ETH = 606 SPT. Provided that 1 ETH = $50 at that moment, there was a 100% bonus for investors which equaled to 1 SPT = 2 SNM (Pre-ICO tokens were supposed to migrate to SNM tokens after ICO starts, with the exchange rate of 1 SPT = 2 SNM).

Pre-ICO had 500 000 USD max cap (10 000 ETH), so pre-ICO participants share accounted for 5% of the total ICO crowdsale. All key numbers, namely the ICO max and pre-ICO cap, SPT/SNM exсhange rate to ETH, pre-ICO bonus — have been calculated according to the ETHUSD rate at that moment (1 ETH = $50).

Initially announced pre-ICO SPT token exchange rate, in USD:

1 ETH / 606 SPT = $50 / 606 SPT = $0,08 / 1 SPT

1 ETH / 1212 SNM = $50 / 1212 SNM = $0,04 / 1 SNM (after SPT to SNM migration)

SNM exchange rate on the ICO at that moment would be:

1 ETH / 606 SNM = $50 / 606 SNM = $0,08 / 1 SNM

But after ETH price skyrocketed, the conditions for the pre-ICO and ICO participants have been changed dramatically. SNM token price on the ICO, with the current ETH price and initially announced token allocation numbers, would be:

$370 / 606 SNM = $0,61 / 1 SNM

Pre-ICO participants with $0,04 per 1 SNM would have had an x15 advantage compared to the ICO investors. Such a difference would be unfair to the ICO participants. So, we had to make changes in the token allocation. Also, we reduced ICO max cap to 117 337 ETH, and we had to recalculate the token allocation numbers, to keep the token-shares of pre-ICO investors the same:

Max number of SNM tokens: 331.360.000 SNM

  • ETHSNM exchange rate during ICO: 1 ETH = 2824 SNM
  • SPTSNM exchange rate: 1 SPT = 4 SNM
  • ETHSNM exchange rate for pre-ICO investors after SPT tokens migration: 1 ETH = 2424 SNM

After the changes introduced SPT token price will be calculated as following:

1 ETH / 606 SPT = $50 / 606 SPT = $0,08 / 1 SPT

1 ETH / 606 SPT = $50 / 2424 SNM = $0,02 / 1 SNM (after SPT to SNM migration)

Actual SNM token price on the ICO:

1 ETH / 2824 SNM = $370 / 2824 SNM = $0,13 / 1 SNM

After these changes pre-ICO investors still have x7 advantage in USD compared to the ICO participants. But some of the pre-ICO participants found this migration unfair, as if the calculations were made in ETH and they don’t get their 100% pre-ICO bonus compared to ICO investors.

We can definitely understand them, but in this very situation, with ETHUSD rate being = ~$350-$400, we’ve chosen the best possible option.

We had 3 options:

1. To keep the same max cap: 273 399 ETH.
With the current ETH price it would have been almost $100M, and this is totally unacceptable, and the max cap had to be reduced.

2. To decrease max cap and keep 100% bonus for preICO investors.
If we have done this, pre-ICO investors’ SNM tokens shares would make more than 10%, and they would have x15–16 USD price advantage compared to the ICO participants.

3. To decrease max cap, to increase max SNM tokens number, and to change SPT and SNM exchange rate to ETH.

This is the option we have chosen.

We understand the feelings of the preICO investors: they have invested their ETH in April, expecting to receive 100% bonus tokens, and in fact will receive almost the same amount of SNM tokens per 1 ETH, as ICO participants.

PreICO participants still have x7 advantage in USD, but there are some preICO investors that are totally unhappy with the token allocation being changed.

We want all our users, community members and crowdsale participants to be happy, so we’ve came to the solution:

We will make full refund of ETH deposit for all preICO participants who don’t agree with the changed token allocation figures and SPT exchange rate.

Just send an email to [email protected] to discuss the details.