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SOS Token: What It Is and How It Works

What is SOS coin in cryptocurrency? How does it work?

Previously there was an airdrop of SOS token by OpenDAO. This airdrop, specifically aimed at OpenSea users, witnessed a remarkable surge of over 1,000% in just two days.

Despite not being affiliated with OpenSea, more than 200,000 wallets have claimed their SOS tokens, resulting in a market cap of over $200 million.

In this article, we will delve into the details of the SOS token, its workings, and its significance in the crypto space.

Overview of SOS Token

OpenDAO, a decentralized organization, distributed an airdrop called SOS to users who had made purchases on OpenSea, the leading NFT marketplace.

Overview of SOS Token

Source: telegaon

The amount of SOS tokens received by each user was determined by their spending on OpenSea’s non-fungible tokens (NFTs).

The SOS token experienced an incredible rise in value, with 240,000 people claiming it and a 1,000% increase, according to CoinMarketCap.

Why was there a SOS Token Airdrop?

The primary goal behind the SOS token airdrop was to compensate OpenSea users who had been scammed and to support the rapidly growing NFT industry.

OpenDAO, the group behind the token, is dedicated to providing a platform for decentralized governance and decision-making, which can contribute to the development and sustainability of the NFT space.

How to Claim SOS Tokens?

OpenSea users can claim their SOS tokens based on the duration and volume of their transactions on the platform.

To claim the tokens, users need to visit OpenDAO’s website, connect their crypto wallet (such as MetaMask, Coinbase Wallet, or WalletConnect), and initiate the claim process.

OpenDAO calculates the reward based on the total amount of DAI, ETH, or USDC spent, multiplied by a specific multiplier and the number of transactions made on OpenSea.

OpenSea's NFT Marketplace

Source: OpenSea’s NFT Marketplace

Users have until June 30th, 2022, to claim their tokens; any unclaimed tokens will be transferred to the DAO’s treasury.

Tokenomics of SOS

OpenDAO has outlined the tokenomics of the SOS token as follows:

  • Total supply: 100 trillion $SOS tokens
  • 50% allocated for the airdrop
  • 20% designated for staking rewards
  • 10% reserved for liquidity providers
  • 20% allocated to the OpenDAO protocol

The OpenDAO protocol’s share will be used to reimburse scammed OpenSea users, support NFT communities and artists, and provide funds for developers.

Token holders will decide the distribution of staking incentives and rewards for liquidity providers through a voting process.

SOS Token’s Validity and Concerns

Is the SOS token legitimate?

The legitimacy of the SOS token has been a topic of debate within the Ethereum community. Developers and experts have been analyzing the token’s smart contract code to determine if it is safe and secure.

According to a developer known as 0xquit, the SOS token is generally safe to claim and trade. They found nothing unusual within the contract that would raise major security concerns. However, another developer, fabdarice, identified some “red flags” in the code.

Concerns Raised About the SOS Token

Fabdarice pointed out that half of all SOS tokens are held in three externally held accounts. This could potentially lead to a “rug pull” – an exit scam where the project’s creators sell their tokens, causing a sudden drop in the token’s value – or create a central point of failure if these accounts are compromised.

A central point of failure refers to a part of the system that, if it fails or is attacked, could cause the entire system to stop working properly.

Another concern raised by fabdarice is that the smart contract’s claim function allows developers to “grant any arbitrary amount of $SOS to any arbitrary wallets by simply generating ‘valid signatures.'”

This means that the developers could potentially mint more SOS tokens for themselves without anyone being able to tell if these new tokens are legitimate or not.

0xquit, however, argued that fabdarice’s concerns are more about the token’s viability rather than its security. They explained that while the developers could potentially forge signatures to mint SOS tokens for themselves, they could not use this method to steal tokens from users’ wallets.

0xquit also noted that there are easier ways for a project’s creators to conduct a rug pull, making this concern an “orange flag” rather than a red one.

The Response from OpenDAO

The creator of the SOS token, 9x9x9, addressed these concerns on Discord.

They acknowledged that the project’s smart contract is not perfect but explained that the only action the developers can take is to move unclaimed SOS tokens to the DAO by June 30th.

They also mentioned that the project’s snapshot has already voted in favor of locking up 30% of the tokens for at least a year, and the team is in the process of finding reputable holders for its multi-signature wallets.

Decentralized Governance and OpenSea

The success of the SOS token airdrop highlights the desire for a governance token from OpenSea. Decentralized platforms such as Uniswap, Compound, and Aave have distributed governance tokens to their users, fueling anticipation for OpenSea to follow suit.

While OpenSea, as a company, does not necessarily need to adopt decentralized governance like Uniswap and Compound, the community’s interest in an OpenSea token cannot be overlooked.

The platform’s growing user base has generated anticipation for an OpenSea token, especially since many other DeFi projects have done so.

This expectation became more apparent when Brian Roberts, OpenSea’s new CFO, mentioned the possibility of an initial public offering (IPO) and received negative feedback from the community.

An IPO would mean selling equity on the stock market, allowing wealthy investors to own shares of OpenSea instead of distributing ownership to the platform’s users. However, OpenSea later clarified that their initial intentions had been misrepresented.

Decentralized autonomous organizations (DAOs) like OpenDAO can provide a self-governed structure that allows for community-based decision-making. These organizations can use governance tokens to involve users in project funding decisions or to address issues such as compensation for exploited vulnerabilities.

Although OpenSea is a business and not obliged to follow the same decentralized model as Uniswap and Compound, the community’s desire for an OpenSea token demonstrates a preference for a more decentralized approach. By considering assistance from a DAO, OpenSea could potentially align itself with the values of the broader crypto community, involving users in the platform’s governance.

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