Stargate Finance proposes the reissue of STG token—see why

Stargate Finance proposes the reissue of STG token--see why

TL;DR Breakdown

  • Stargate Finance has proposed to reissue a new STG token and airdrop it to its holders.
  • The company’s new proposal was due to the security concerns with Alameda Research’s Wallets.

Stargate Finance has presented a proposition to reissue its STG token to address issues regarding the ownership of Alameda Research’s wallets and other security concerns. According to their proposal posted on their DeFi protocol governance forum, replacing the existing native tokens with the new ones is expected to bring more clarity and assurance.

The problem began in March 2022 when Sam Bankman-Fried’s crypto hedge fund Alameda Research purchased 10% of the total STG supply from an auction. CEO of Alameda Research Sam Trabucco stated then that these tokens would stay locked for three years and thus remain so until March 2025. The voting powers connected with those STG tokens were assigned to early participants in the community.

In December last year, Arkham Intelligence, a blockchain intelligence firm, discovered suspicious activity within Alameda’s wallets. This sparked speculation that an individual might be behind the suspicious activity. Now StargateDAO realizes that their proof-of-liquidity (POL) and token holders are at serious risk due to security issues with Alameda Research’s accounts.

The proposed solution by StargateDAO would allow them to issue new STG tokens, thereby eradicating the risks associated with illegitimate transfers from the vulnerable Alamada wallets. Also, this step is necessary to defend token holders’ interests and effectively contain any fallout should a bad actor try to sell off 100 million STG in bulk.

On March 15, 2023, the Stargate Foundation will circulate STG tokens again, followed by an equal airdrop for all token holders. The Stargate Foundation will put Alameda’s purchased tokens in a different wallet until further notice from the bankruptcy court. The proposition has generated tremendous support surrounding STGs; its market value rose by 21% after the news and is currently trading at $0.74.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

Damilola Lawrence

Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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