Fork Policy

“Forks” and “airdrops” provide new channel for delivering real value to holders of existing digital assets. The deployment of new forks and airdrops has raised questions about how Crystal Point Finance customers can expect to receive or not receive this value for themselves or for their customers. Each fork or airdrop faces unique technical, security and liquidity challenges.

This document sets out Crystal Point Finance’s policy on how to handle forks and airdrops for its customers.

Crystal Point Finance’s primary goal is always security and safety of assets under its custody. Crystal Point Finance will never introduce support for any fork where Crystal Point Finance, at its sole discretion, believes it may be unsafe to do so.

Crystal Point Finance also intends to preserve value for its customers. When forks occur with significant value, Crystal Point Finance will work with customers to attempt to deliver that new value to customers. This may or may not mean that Crystal Point Finance can support the token as a fully featured wallet with all the security principles that Crystal Point Finance generally tries to maintain. It may mean that Crystal Point Finance provides customers with tools such that they can access the token and convert it to other forms of value.

For the purposes of this policy, Crystal Point Finance treats forks and airdrops similarly. Crystal Point Finance customers generally desire to have access to all value which they may be able to access, and whether the new value is delivered via a fork or an airdrop, the evaluation and support of that new value by Crystal Point Finance will be determined by this policy.

Crystal Point Finance will take into account the following five factors before they arrive at a decision of how to handle a fork or airdrop: (1) technical stability; (2) market capitalization; (3) liquidity; (4) cost; and (5) timing.

As security is always our most important goal, the technical evaluation of any new fork or airdrop is critical. In order for Crystal Point Finance to support a fork, Crystal Point Finance must believe that the new fork is technically stable and secure. This determination will be made based on many factors, including but not limited to:

In order for Crystal Point Finance to consider support for a new fork or airdrop, the value within the fork or airdrop must be significant. If it is not measurable on top-10 exchanges to be more than US$100M of value globally, Crystal Point Finance will likely not support the fork or airdrop. Note that in many cases, a new fork or airdrop may appear to have sufficient market capitalization to be supported, but it may not have sufficient liquidity (see below).

Other than having sufficient market value, the forked token must have sufficient liquidity. A fork of Bitcoin, for example, with even a US$10/token valuation would have over a US$190,000,000 market capitalization. However, if it is thinly traded, access to the value of the token would be a mirage to Crystal Point Finance’s customers.

In order for Crystal Point Finance to support the token, there must be sufficient liquidity in the market on reputable exchanges for a sustained period of time. Generally speaking, Crystal Point Finance would expect to find at least US$25 million of daily liquidity available on well-known and trustworthy exchanges for a period of not less than 14 days before Crystal Point Finance will consider whether the forked token has sufficient liquidity and real value.

There is considerable overhead in supporting new tokens. Once Crystal Point Finance issues wallets for a token, Crystal Point Finance supports that token and blockchain essentially forever. Some forks are seemingly simple for Crystal Point Finance to support. For example, if a forked token is technologically the same as the original, the cost for supporting the new token may be relatively low.

At the same time, some forks or airdrops may be technologically very different from the existing supported tokens. For instance, new airdrops or tokens may be built upon different cryptographic algorithms (RSA instead of Elliptic Curve), and may have new transaction formats, block formats, multi-signature features or other changes.

The larger the changes, the higher the cost to support and maintain. Generally speaking, if a new fork is costly but has sufficient value to Crystal Point Finance customers, Crystal Point Finance will use its best efforts to enable its customers access to the new token. However, it may affect the timing under which Crystal Point Finance can do so.

In general, new forks and airdrops will be introduced with prior notification before the fork or airdrop occurs. However, the notification periods can sometimes be very short, say less than 8 weeks. Additionally, airdrops can be done in such a way that the airdrop later will “expire”, giving implementers only short windows of time to claim the airdrop before the value is lost.

Unfortunately, Crystal Point Finance cannot guarantee to support new forks or airdrops within any short timeframe. Business obligations, developer availability and cost are all material factors, and security, testing, quality and service are our primary objectives. While Crystal Point Finance will do its best to make value available to its customers, it cannot guarantee a specific timeframe when the exact considerations of future forks can be so varied.

In addition, should Crystal Point Finance elect not to support a fork at one point in time, it does not mean that Crystal Point Finance will never support that fork. For example, upon launch, a fork may not meet the stability market capitalization or liquidity thresholds for Crystal Point Finance to support. In the future, should the fork become viable, Crystal Point Finance may, at its sole discretion, elect to support the fork or airdrop.

In the event of an upcoming modification to the Bitcoin network or other applicable networks that could potentially result in a digital asset network fork or airdrop, Crystal Point Finance will use its best commercial efforts to provide the value of the forked digital asset to its Customer.

Nevertheless, the top priority of Crystal Point Finance is always the security of the existing digital assets of its customers. Crystal Point Finance, at its sole discretion, may or may not decide to make digital assets available to its customers. It may also take significant time for Crystal Point Finance to implement or provide access to any digital asset created as a result of a fork. Customer shall indemnify Crystal Point Finance against any direct, indirect, incidental, special or consequential losses due to inability to access any digital asset created as a result of a fork or airdrop.

In the event that Crystal Point Finance does consider a fork to be technically safe with sufficient market value and liquidity, but the customer desires access to the fork in advance of the timing that Crystal Point Finance can provide due to cost or timing considerations, Crystal Point Finance will, in good faith with the customer, determine a product plan to enable the customer to access the value of the fork or airdrop such that the customer, at its sole expense, can access the token.

Crystal Point Finance reserves the right to update this policy and the criteria for measuring the viability of a fork or airdrop from time to time based on new technological, legal or environmental factors that may emerge.