Navigating the CUDOS to FET Token Merger: What You Need to Know
As it’s been recently announced, the CUDOS token and blockchain have the opportunity to merge with the ASI blockchain and its token $FET in a significant step forward for AI, the journey to artificial super intelligence and blockchain. After the CUDOS merger, ASI will become a vertically integrated alliance, with CUDOS providing the infrastructure layer, Fetch.AI providing the tooling, Singularity providing the services and Ocean Protocol providing the liquidity and data. For a detailed explanation of the magnitude of this merger please read this article .
While we published some detailed FAQs yesterday, in this article we will dive deeper into the different aspects and steps of this token merger, should it be approved by the community.
In the original announcement we outlined merger process, which at a high level is:
As a quick summary: holders of the CUDOS token in the CUDOS mainnet wouldn’t need to do anything – the chain would stop, and their balances would be converted to $FET in the Fetch.ai (ASI) blockchain, in the same account where they’re currently holding CUDOS. Delegated tokens would continue to be delegated and they would keep earning rewards. Holders of the CUDOS token in Ethereum would need to use the SingularityDAO platform to swap their CUDOS into $FET. All $FET tokens received would have a three month vesting schedule.
Now let's dive deeper into each of the steps.
Governance proposals
Both the ASI and the CUDOS communities will vote on a governance proposal to decide if they want this token merger to go ahead. These votes will be run in parallel, since the voting time on both blockchains (CUDOS’ and Fetch.ai ’s) is 5 days. We will be sharing a how to vote guide for CUDOS holders next week.
These proposals need to pass in order for the token and chain merger to go ahead, as that will signal the majority approval from token holders. Assuming both governance proposals pass, this would give the green light to both the ASI and the CUDOS teams to start executing and making available the necessary steps for the token and blockchain merger to happen.
The first step would be to mint the new $FET tokens needed for this conversion to be possible. There will be 88,946,755.672 new $FET tokens minted, given the total supply of the CUDOS token is 10 billion and the token merger rate is 112.427. This price was calculated as an average over a 30-day period. A 5% merger fee was agreed to support this merger, and as such the fixed exchange rate between CUDOS and $FET for all CUDOS holders would be 118.344, meaning that for each 118.344 CUDOS tokens exchanged one $FET token will be received. This rate is fixed and will not change.
Distribution of the new $FET tokens
These new $FET tokens would be made available to all CUDOS holders of both the Ethereum version of the token and the native Cosmos one. As such, part of these tokens would be sent to the swap smart contract in Ethereum, and the rest would be assigned to holders of the native currency as part of the ASI network upgrade process.
The first exchange facility opens in Ethereum
The next step in the process would be the opening of a swapping facility in Ethereum. Two smart contracts would be deployed in the Ethereum blockchain, in order to receive CUDOS tokens, burn them and transfer the corresponding amount of $FET in a 3-months vesting schedule. The vesting in this case would take 648,000 Ethereum blocks, which is approximately 3 months.
This exchange facility would remain open indefinitely to allow current CUDOS holders in Ethereum enough time to swap their tokens. This would also mean that current CUDOS holders that have an active vesting schedule in Ethereum would be able to wait until their CUDOS vesting ends, and then swap their CUDOS into $FET with the exchange facility provided. The website CUDOS holders would use for the swap would be the SingularityDAO platform .
What wallets would be supported?
MetaMask would be the main wallet supported in this process for the Ethereum conversions. As a reminder, the Ethereum address of both tokens is:
CUDOS begins to be delisted from exchanges
At the point where the exchange from CUDOS to $FET is made available, public trading of the CUDOS token would start to decrease and the token would be delisted from all main exchanges. It would be advised that any CUDOS holders providing liquidity in decentralised exchanges also remove their liquidity in readiness for the token swap.
The CUDOS and ASI teams would work closely with all the different exchanges to make this a smooth transition. Further details would be provided if there are any further required actions from users in any of the exchanges.
The CUDOS blockchain stops producing new blocks
The next major step in the process would be the stopping of the CUDOS mainnet blockchain, as a necessary step to merge the CUDOS blockchain into the ASI blockchain. While Ethereum token holders would need to actively go to the contract or UI and swap their tokens, the process would be automated for mainnet tokens.
After the chain stops, a snapshot would be taken of the latest state of the network. This snapshot, an export of the chain’s state, contains all the information about the blockchain at that point in time. That would include token balances, delegated tokens, outstanding rewards and any other on-chain information such as the active validators.
That information would be used to calculate the $FET amounts that correspond to each token holder. Those $FET amounts would then be added to the ASI blockchain as part of a network upgrade process in that chain, which would be the last step in the merger of the two blockchains.
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The CUDOS Bridge will no longer be available
While each CUDOS holder would be able to freely choose where they’d like to swap their CUDOS for $FET, there would be advantages in being part of the automated swap process in the CUDOS blockchain, such as earning staking rewards during the whole term of the vesting period, so this option might be more attractive for some token holders.
At the point where the CUDOS blockchain stops, the CUDOS Bridge would also stop working, given its functioning depends on the CUDOS blockchain producing blocks. So please make sure that all cross-chain transfers are done before the CUDOS blockchain stops, if the merger does go ahead.
Receiving the new $FET tokens
The new $FET tokens would be received in the same Cosmos account that had the CUDOS tokens. That is, the same mnemonic/private key has a representation in many different blockchains, and in particular in all Cosmos chains. That means that the ASI public address can be obtained from the CUDOS public address without the need to know any secrets.
For example, the CUDOS account cudos1dpnfa2e97mkzj6aurx3mm9zvaxmagt2qfzx72z shares a private key with the ASI account fetch1dpnfa2e97mkzj6aurx3mm9zvaxmagt2qmwx9kq (note the similarity between the two addresses).
A very convenient way to find the address of an ASI account given a CUDOS account is by using the Multichain Profile option that’s available in Mintscan when using it from a desktop browser.
Supported wallets for $FET
ASI have their own wallet for $FET tokens which you can find here , which would be the recommended one for this token merger. Keplr, Cosmostation, Leap wallet and others also support $FET.
Vesting schedule
The newly minted $FET tokens that current native CUDOS holders would receive after the ASI upgrade would also have a three months vesting schedule. The vesting would be linear, the release would be per second, and it would start the first block after the ASI upgrade and would finish for everyone three calendar months later.
These vesting schedules in ASI would support staking. That means that all tokens that are the equivalent of all CUDOS tokens that are delegated when the chain stops would also be delegated in ASI after the upgrade, and so the vesting schedule would not affect the reception of staking rewards. The tokens wouldn’t be able to be moved until they have vested, though. As for outstanding rewards in CUDOS, they would be added to the available balance of the account, and would also be part of the vesting schedule, making the process completely automated and removing any need to do last minute actions.
Current CUDOS holders who are already holding FET in the same account they are holding CUDOS would have the exact same experience: their current holdings and delegations would be unaffected, and on top of what they already have they would be assigned a vesting schedule with the new $FET tokens that correspond to them.
Validators on the CUDOS blockchain who are not also validating in ASI would be encouraged to move their operations to ASI, and so would all their current delegations. Accounts delegating to a validator who does not join ASI as a validator after the upgrade would have their tokens delegated to a new CUDOS Validator in the ASI Network.
What should I do as a validator in CUDOS?
The CUDOS team would be in touch shortly about the process and the steps to follow via the usual communication channels used for network upgrades. Detailed instructions would be provided for this migration and support would be provided to migrate the infrastructure to be able to validate in the ASI network, if they wished to.
Other holdings in the CUDOS Network
Any CUDOS accounts holding tokens received via IBC in the CUDOS blockchain would need to move them out of the network before the chain stops. Afterwards, they would be lost, given that they cannot be minted anywhere else without breaking IBC protocol rules. So please make sure to move any non-acudos tokens out of the chain as soon as possible, if the merger does go ahead.
CUDOS holdings in other Cosmos chains
Any users holding CUDOS tokens in other Cosmos chains would be encouraged to send them back to the CUDOS blockchain using IBC before the chain stops. However, a smart contract in the ASI network with its corresponding vesting schedule would be provided to allow the CUDOS to $FET conversion for any users who did not transfer their CUDOS holdings back to CUDOS on time.
The ASI blockchain upgrades to include all new $FET balances from CUDOS native holders
The last step in the blockchain and token merger process would be the upgrade of the ASI blockchain to include all of the CUDOS community and validators. There would be a governance proposal for the upgrade as usual. The swap facilities in Ethereum and the smart contract in ASI would remain open indefinitely.
Further details will be shared if the community votes pass, but in the meantime please do reach out to us if you have any questions. A voting guide will be shared next week as well to try and maximise community participation.
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1moLooking forward to seeing how this unfolds and the innovations it will bring