Hi All, Before we kick-off, we wanted to clarify and expand on this morning’s statement.
Firstly, we have not sold the company. We have sold FUN tokens to Freebitco.in.
The company remains committed to developing the plans outlined in the Q1 update—those being Layer 2 tech, the Wallet and Games. We continue to support the casino platform despite the cost of gas. This situation, of course, is unsustainable, and the team are monitoring closely.
Finally, a lot of questions have related to the purchase price. We are under NDA and cannot release this publicly. Moving forward, we collated most of the questions received since this morning’s announcement and found that a lot of them had similar themes. So have broken today’s AMA into sections to try and cover off the underlying subject matter.
- Cold Storage
- Next Steps for FunFair/ Fun Token
Q1: When was the decision with free bitcoin made? Since the communication has flipped out of the blue. Fred: It was a very short term decision and was released to the community as the NDA bound us not to discuss before execution. The offer and decision were made in the last week or so and made with recognition of unviable gas costs.
Q2: In what way is this not a semi rugpull? Fred: The token and commercial use case of the existing FunFair casino tech is too reliant on the cost of transactions, so when an opportunity came along to find a new use case for the token, it seemed like the best outcome. FBC has made a large commitment to promoting and supporting the FUN token, and they have every reason to continue. There is an incentive for them and their customers to continue to support the FUN token.
Q3: It was otc one would assume since personal holdings from the team were already sold months ago 1bil+ tokens of their own using Binance. Why did the team suddenly decide to then sell via otc to Free Bitcoin team? Seems a bit contradictory and bad for the token holder and more in self-interest? Fred: FBC wanted to take over the token in its entirety. That was the most practical and sensible way of doing it.
Q4: Why was the announcement made after the transfer of the fun tokens (as can be seen by the screenshot in #💹trading ) instead of right before. Did that announcement come on the back of the tx being spotted for huge 1bil+ transfers of the token? Fred: The NDA bound us not to discuss before execution. The announcement was made immediately after the transfers happened. It took seven transactions to move the tokens, and the announcement was made seconds after the transfers were complete.
Q5: When have discussions regarding the sale of extra tokens otc to freebitco.in been going on from? Fred: Last week or so, it was very short term. It seems clear now that FBC and their customers have been using the token in significantly higher volumes than the previous couple of years of FunFair customers’ token usage.
Q6: Did FF do any vetting of freebitcoi.in? I’m concerned about the many big red flags like openly pumping the price and advertising future price increases. Is FF concerned about this too? Surely FF doesn’t want some scam representing them tarnishing the brand. Can we trust freebitcoi.in? Lloyd: The deal was conducted between two Isle of Man registered entities with full KYC on both sides, Freebitco.in have a licensed gaming entity in the Isle of Man. They are also making key and senior hires to focus on developing FUN token utility across igaming.
Q7: Why would you not just allow them to continue to buy on the open market and continue to run your normal operations? Fred: FBC’s number of customers (40m+) dwarfs the few thousand of FunFair’s own customers, so this would’ve been impractical.
Q8: What are the pros and cons of this deal for current FUN token holders? Jez: freebitco.in has a use case and has a large number of customers they can market it to. It’s a potentially much larger use case involving a lot more potential customers than our existing Casino. We can’t promise anything about what FBC will do with it, except to recognize they and their customers now have a lot of tokens. They have lots of incentives to do their best to make it work and be successful. Fred: No question, FBC has an entirely different use case than FunFair. However, they can market to many customers and aren’t relying on on-chain games. Thus the use case works better for them. Overall this is good for current holders. The FUN token is entering a new era and a different use case. If you compare this year’s use of the token to the last two years, the difference is noticeable in token activity (and volume and value)
Q9: What did FBC actually buy? The brand FUN, only tokens, or technology like faith channel’s?
Tom: Only FUN Tokens, The existing casinos continue to be under FunFair control. Freebitco.in also operates its separate casinos.
Q10: Will FunFair team members be moved to work for FBC? What do employees think of this move? Lloyd There are no plans to move any current FunFair team members. We are happy that we can focus on the projects we have set ourselves to complete. FunFair remains a separate entity from Freebitco.in
Q1: Has fun sold off any of the 4 billion FUN locked in cold storage that was intended never to be touched? Lloyd: We have sold 3.75bn FUN tokens from cold storage. Our whitepaper mentioned that the remaining 4.7B (45%) tokens were held in cold storage for future sale to institutions or large token buyers.
Q2: Are the cold storage tokens they got the ones that weren’t supposed to be used ever? Fred: FBC has taken over the FUN token. Part of that deal was transferring the majority of the tokens that we held to them.
Q3: It was my understanding that the cold storage fun tokens were reserved for the rainiest of days, with FF even wanting to burn them but could not because of lawyers. These tokens were effectively out of the circulating supply likely forever. With the huge runway FF had, 6-8 years?, it doesn’t seem like there was a rainy day that threatened FFs existence, but now existing token holders have seen their holdings diluted. This move has benefitted FF by hurting existing token holders. Do you agree with this assessment? Lloyd: The gas cost caused unviable transaction fees and would have been a potentially systemic extinction-level event for the token use case. There was no foreseeable future in prolonging our use case for the token. Thus someone else finding a viable use case and generating significant token activity seems like a potentially better future for the token. Building the Layer 2 tech is a massive piece of work and will take a long time to get right.
Q8: How many fun tokens does FF still have? Fred: FunFair have around 800m FUN tokens across cold storage and in live wallets
Q9: Their website claims the circulating supply is 11B now, but FF holds 800M in cold storage and active storage still? Jez: That’s correct, FBC has overstated the number of circulating tokens. We will let them know. Coinmarketcap should automatically compute the correct number of circulating tokens as they know the cold storage addresses
Next Steps for FunFair/FUN
Q1: What will happen to casinofair? Fred: We will continue reviewing our Casino’s performance as we were before and will take actions as we see fit. We haven’t made a decision on the casinos, but as you know, the gas costs are prohibitively expensive. It costs us a fortune every time a customer plays any of our games, so we’re in the midst of a massive overhaul of the technology to make it viable to run on today’s blockchains.
Q2: How will the team be involved in the future development of FF or it has plans to start a new project? Fred: We are already working on projects that we started at the end of last year, like L2 games, Multiplayer games and Wallet. So we will continue to work on these projects. Our main focus are the L2 Projects. We’re committed to solving the transaction fee problem and making games affordable to play for the mass market. We’re exploring multiple different Layer2 technologies, and we will also be considering other blockchains with different costs and performance capabilities.
Q3: It appears you are trading off another independent use case and an infusion of cash for the additional runway. To then continue to pursue the original mission along with additional liquidity and promotion of the shared token. Tom: We believe this is good for both the company and token holders via this deal.
Q4: Is the Fun team going to be continuing to work on the FUN token acquired by freebitco.in or is it them on their own now? Fred: The casinos are still running and using FUN. We need to decide how to move forward with them, given the astronomical gas costs we have. We are working through those decisions and will update you as soon as possible.
Q5: Will the planned projects continue to use FUN, or another token altogether? Jez: There are no plans to use another token. As said previously, the current projects will continue as normal. We’re knee-deep in research on Layer 2 tech, and we will also be evaluating new blockchains that are faster and cheaper. It’s going to take time to get it right. Oliver: Here’s an (impenetrable) sneak peek at our in-development game running on xdai. https://blockscout.com/poa/xdai/address/0x28655d5d2A2d6Aa8132028D5878F62741c19D332/transactions
Q6: Is the era of centralization back upon us? Fred: Different use cases have different requirements. FunFair is a big fan of decentralized, non-custodial, guaranteed fair gaming, and we intend to continue our work in that direction. FBC’s present Casino and customers are using a different model and use case.
Q7: isn’t it concerning that fun could be used in 3rd party unaffiliated casinos that are in fact not provably fair just as a normal funding token thus diluting or damaging the brand? Oliver: That was always true. The token is decentralized, and we can’t control who uses it or for what. Jez: It’s a generic erc-20 token. Anyone could’ve used it for any purpose, and they did.
Q8: What did FBC say their reason was for wanting to use FUN vs their own token? Jez: They are already using it for loyalty and promotional purposes and have been since early January. They also operate casinos and have bigger plans to expand their use.
Q9: FBC claims to want to port FUN tokens over to a different blockchain and burn tokens. Can they do this if they don’t have access to The token code? Oliver: Yes, anyone can burn tokens. Just send them to 0x0. The token’s utility is done at the application layer. They don’t need access to the code to move tokens to another chain either. They can just burn on one chain and mint on the other. This is how almost all tokens are moved from one chain to another.
Q10: If FF is decoupling from FUN will FF turn into a traditional company and issue equity/IPO down the line? Jez: We’re going to stick to our long term R&D and solve some big blockchain problems to make gaming viable on-chain. We’re not concerned with additional strategic plans (no IPO, no equity raise, no new token etc). We’ll use our existing and now enhanced treasury to keep on mission.
Q11: So what does this now do to the FF runway? Jez: It’s healthy. We have the treasury to stay on mission and double down on the stuff that works once we’ve figured out the L2 tech.
Q12: What access does Free Bitcoin have to FunFair IP other than the tokens: Oliver. None
Q13: It seems like FBC is way less constrained on the promotion of FUN and that could be good for hodlers. Tom: We believe that has been evident over the past few months. FBC has been able to promote FUN to move the volume via a much bigger audience.