It would be good if they could help bolster our case I agree. Unfortunately Tether already facilitate 1 to 1 par value cross chain “protocol swaps” for anyone that requests them between the different chains they support. These are analogous to an account transfer, not a buy/sell redemption tax event. https://tether.to/explained-chain-swaps/
Omni share of Tether has been declining for years, I do not see how it would make sense for Thorchain or others to make a swap for it as it is already possible should anyone need it.
Poloniex are also doing the same, on the same date funnily enough. Omni is no longer required for Tether so unless the CEX lists MaidSafeCoin, why would they bother with the extra maintenance/security concerns.
The slight concern is that Bittrex also announced transition from Tether Omni to ERC20 at around the same time Binance and Poloniex did. With luck it will not be an issue until after MaidSafeCoin is dead and gone, but it does raise the risks.
It certainly raises the risks. While conversation is still ongoing on the Wrapped front, OMNI has become such a liability that multiple exit options are necessary. @DeusNexus, did you ever find a solution to paying for the fees to wrap MAIDe? If so, were there any other challenges preventing your solution from rolling out?
If Omni was not on exchanges and this conversion was in place then we most likely don’t worry about Tax. As MAID is not tradable it has a zero value on conversion! Just a thought for everyone.
I read about the Gas Station Network which allows relayers to pay for the gas fees, but the idea to be dependent on the relayers to maintain enough ETH for transactions is prone to failure if they run out.
This should only be optional choice where person can choose to pay extra commission which will be used to reward the relayers for their work.
Then for Multisig Minting I found that this might help:
This is also used for current test Smart Contract, Openzepplin ERC20 with Fixed Supply:
I also see there is a Payment Splitter now, might be interesting where people deposit their ETH in the contract and it can distribute the payments based on size and reward in equal manner:
Just note that Gas fees are just one side, there are also Bitcoin fees when people unwrap their ERC20 and the Omni has to move out to their personal address.
Okay, so my understanding is that there are 4 steps to this wrapping process. Can you confirm which (if any) of the solutions you outlined could make the following true?
Move OMNI MAID from individual’s wallet to wrapping contract (fee paid by user based on BTC in personal wallet)
OMNI MAID locked (no additional fee)
Individual sends ETH to wrapping contract (covers fee for step 4)
MAIDe minted and sent to individual’s wallet (fee covered by step 3)
It sounds like the Payment Splitter option could support this.
No actually that is exactly backwards. We covered this pretty extensively from about here in this thread.
If you bought Maid for $1 and while you hold onto it, its value goes to 0.50 cents, then up to $100, then back to zero or close enough, and you then redeemed it for SN tokens that are worth $2, then this is not a 1 to 1 par value transfer/swap and so would be taxable. It does not matter that the value went to 50 cents, $100 and then zero or anything else in between. What matters is where you bought it ($1), how much you redeemed it for ($2), and how much time passed between those two events (long term vs short term holdings are taxed differently). You undertook a 100% return redemption event which is taxable.
However 1 to 1 par value transfers change the location/protocol but not the par value, so are not redemption events/taxable in any jurisdiction we can yet identify. Many 1 to 1 par value transfers happen in our accounts everyday, the whole financial system runs on them:
Shareholder reorganisation 100 ABC Corp shares for 100 ACME Corp shares of equal value
$100 USD in your company onshore bank account → TT wire transfer to fintech bank → $100 Eurodollars in same companies offshore bank account.
£100 in bank account → major protocol transfer → ATM cash out £100
100 USDT Omni → protocol transfer → 100 USDT ERC20.
100 Maid → protocol Transfer → 100 SN tokens
The good news is that there is no need to argue about this, verify instead. If there is any shadow of a doubt many in this community are/will be affected as the USDT Omni in their Bittrex, Binance or Poloniex accounts have already/are about to do a few billion in USDT Omni → protocol transfer → USDT ERC20. Poloniex will do the swap in a few days on the April 30th and I am very happy to say it will affect me, looking forward to dropping it on the accountants desk next tax time.
So to play it extra safe you can check with your accountant how the protocol transfer is to be handled from a tax point of view or ask someone in this community how they were affected when billions of USDT changed protocol. That will bring clarity when the Maid to SN tokens swap happens.
If as David says the conversion happens with a zero valuation for the MAID, then he’s correct that no tax would be payable. I’m not sure why you are arguing against that.
The only question would be whether he’s correct about losing all exchanges meaning a zero valuation would be given. I’m not sure myself.
No, he is not correct. I explained clearly why he is not correct and zero is not anymore special than $100 to any other number:
It would help if you could explain your reasoning it will help to understand where your coming from. I have bought and sold enough assets and done enough tax returns to know what I know.
Edit: The only way he could be correct is if SN Tokens are also valued exactly zero.
If you buy at any value and sell at a value below that, there’s no tax to pay. I’m sure you agree on that.
So a tax event that means a disposal occurs at a value of zero cannot incur any tax.
In that case it doesn’t matter what the conversion is because you only pay tax on a disposal event, and if that is deemed to be from something that has zero value to something else, anything else, there’s no tax to pay at that point.
There may be later, when you dispose of the new asset, but that’s not the issue being discussed. The issue here is whether a conversion triggers a tax liability.
It is actually a tax credit which you can use to offset any tax gains you have made elsewhere. So still a taxable event. Go ask the traders over on the traders thread they will be very familiar with this.
No, you bought an asset for $1, which you then redeemed for another asset that for example at launch is valued at $2. The zero in between is no more special than -$40, or +$100 would be, just another intermediate price between where it was bought and for how much it was redeemed. Your not redeeming for $0, your redeeming for the value of the SN token. Tax returns are pretty clear: Where and for how much did you buy the asset. When and for how much was it redeemed. If you bought it for $2 and redeemed it at a loss for $1 a SN Token that is also a taxable redemption event, only this time you get a tax credit to offset somewhere else (how and where you can use this credit varies a lot between jurisdictions if at all).
As I said above the only way he could be correct is if SN Tokens are also valued exactly zero, and so it is not a redemption event but a 1 to 1 par value transfer/swap/protocol change.
We’re talking at cross purposes. The event that matters here is not when you later sell SNT. Obviously that will be taxable if you made money at the time you dispose of that.
The issue that people are concerned about is whether they incur a tax liability at the point of any conversion of MAID into something new. So I don’t know why you are not addressing that. And I repeat, if when that occurs the MAID is given a zero value, no tax liability will result.
I did mention this in my replies, but you keep ignoring what I’m saying so I’m going to leave you to it.
All exchanges have to delist Maidsafe in order to not have price discovery, not only Bittrex.
If one exchange keeps Maidsafe listed, there will be price discovery. The case could even be made, that price discovery is still in place because we are an omni token and there will always be the OmniDEX.
So tax event or not, the most important issue is a potential delisting from Bittrex.
60%+ of the voting empowered community voted in favor of an ERC20 token, and those are long term members, which have to be listened to, they cant be kept hostage by a minority.
At this point, I think it’s no longer a question of whether to convert to ERC20 but rather a question of when and how. The risk of remaining on OMNI is too high. Even the issues with P2PB2B are all because of OMNI.
Rather than cross purposes I think there is a major misunderstanding. I am only talking about that exact moment, the moment Maid changes from zero value to a SN Token in equal [edit: equal amount 1 Maid for 1 SN Token] worth $2 at launch. At no point have I talked about or referred to the moment where “you later sell SNT”. That would be another separate taxable event, where in my example above your starting acquired price is $2 and the sell price is… something a lot higher.
I can’t agree more and honestly i believe the easiest way to deal with this is to have every holder send their Maid-o to a burn address and have the Maidsafe company take care of the exchange to Maid-e.
This Maid-o burning process should be kept open long enough, so that everyone can change their Maid-o into Maid-e.
EDIT: people that don’t want to make the exchange because of gas fees, should wait until fees go down.
I honestly believe that no tax service will make a problem out of this. They will not even understand it is a slightly different token. You just dont declare it for obvious reasons.
Sure you can declare it. 100 Maid Tokens held here on this omni address are now 100 Maid tokens held over here on this new erc20 address (Maid-omni to Maid-ecr20). To be absolutely sure in your jurisdiction check your exchange accounts or ask someone who has/is about to go through the USDT-o to USD-e transfer on those major exchanges.
Sounds very logical what you say. I sincerly doubt that moving you tether-o to tether-m would cause a taxable event. But at the same time why would you even state that you now have Maid-e? You just have MAID.
