Why token migration is necessary is not your only wonder, specially in token trading is more and more important in our life style. Let’s talk about this problem in this article below.
Blockchain projects often begin their lives as white papers promising innovative technologies to follow at a later date. The journey from design paper to real product often goes through many twists and turns, and sometimes projects change their plans in fundamental ways – like choosing to switch to a completely different blockchain.
In these circumstances, projects may require investors to participate in the movement of cryptocurrencies or tokens. Token migration is also known as a token swap, the process involves transferring the balance of token holders on one blockchain to another.
Token migration first became popular in 2018, following the peak of the Initial Coin Offering (ICO) boom from 2017 to 2018. An ICO is a fundraising technique in which one the project generates a token that can be purchased by those who wish to invest in the project’s future technologies, often outlined in the white paper. In 2018, most projects doing ICOs conducted them on the Ethereum blockchain using ERC-20 tokens. Some of these projects promise that the tokens investors have purchased can be used in their future technologies, including the blockchains they plan to build. Therefore, when projects finally launched their own blockchain, they needed a way to migrate investor tokens from Ethereum to their own chain. This is similar to moving from a house you rent temporarily to a home you intend to own permanently. Enter token migration.
Notable projects that have completed the migration from Ethereum to their own proprietary chains include Tron, EOSIO, Crypto.com, Golem, and Aeternity. Token swaps also occur when a project moves from another third-party smart contract platform to its own blockchain. For example, Ontology, originally a NEP-5 token on the Neo platform, switched to its own blockchain in 2018.
Token migration can also be conducted between two different third-party blockchains. As the smart contract platform landscape becomes increasingly diverse – and smart contract platforms continue to compete with each other in terms of cost, features and more – some experts predict an increase in migrating from Ethereum to other smart contract platforms such as Solana, Cardano, Polkadot, NEM and others.
The token migration process varies from project to project. If you preserve your tokens yourself, you may be asked to initiate the migration yourself. However, this usually does not mean that you need to understand the intricacies of coding.
If you keep your tokens on an exchange, that exchange will likely handle the token migration on your behalf, especially if that exchange is a large, potentially expensive player. reputation in the field of electronic money. However, this is not always the case, so you should check with both the project in progress and your exchange to make sure that the exchange is participating in the migration.
Also, some projects implement a cut-off date for token migration, which means you won’t be able to transfer your tokens after a certain date. In many cases, this will effectively show stale tokens of little or no value after the cut-off date.
During the Initial Coin Offering (ICO) boom of 2017, many blockchain projects raised capital by issuing tokens on the Ethereum blockchain and other third-party smart contract platforms.
Want to know more about token migration, contact SmartOSC’s experts here
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