What is token swap? A primer to Zilliqa token swap

Primer to Zilliqa token swap

tldr (too long didn’t read). Here are some of the important information

What is token swap?
Token swap is a mechanism that will help you convert ERC20 ZILs from the Ethereum network to native ZILs on the Zilliqa network at the rate of 1:1. This is crucial for all token holders as the trading of ERC 20 ZILs will eventually stop permanently.

Please note that token swap is conducted through supported exchanges. For the list of supported exchange, please refer to “Token swap progress (exchanges)”.

So why is Zilliqa using exchanges to conduct the swap? How does it work?
Since the TGE, Zilliqa has been very mindful of potential risks associated with token sale and allocation. All who joined our token sale at that point- whether larger or smaller token holders — had to go through a fairly stringent KYC/AML procedures. This procedure was of the utmost importance for two reasons:

Firstly, to reduce risks on the Zilliqa team, and secondly to ensure the sustainability of a project that is operating in an evolving regulatory ecosystem. That is why for the upcoming token swap, we find it crucial to be consistent with the best practices we’ve adopted since the early stages of our project by avoiding unchecked direct token swap. Given the bandwidth and capacity of the Zilliqa team, we cannot lead KYC/AML for such a large number of token holders. After discussions with our legal counsel, we decided that leveraging third parties to facilitate the swap was the most robust option.

Thus, Zilliqa has chosen to facilitate token swap through reliable top exchanges for reasons of convenience and security — and the process has already begun. While we have recommended some tried-and-tested mechanisms to all exchanges we are liaising with, some may vary in the methods they use and their timeline for swaps. We cannot stipulate the exact procedure adopted by all platforms. There may be some differences across exchanges. When that happens, we will try to inform the community to help clarify all steps to successfully conduct the token swap.

The basic principle behind it remains the same, regardless of the platform. Via exchanges, users can:

  1. Deposit their ERC20 interim ZILs on the exchange
  2. Get native ZILs in return when withdrawing from the exchange

Is it critical to swap my tokens immediately? What happens if I don’t?
You are strongly encouraged to swap your tokens as early as possible. Eventually, after a deadline (exact date to be confirmed later), interim ERC20 ZILs will be frozen and become obsolete. Native ZILs on Zilliqa mainnet will be the only ZIL token. To use the various Dapps in the ZIL ecosystem, the native tokens are needed as gas fees similar to Ethereum’ ETH tokens. Find out more about gas fees on Zilliqa at “Gas accounting in Zilliqa”.

How many phases of the swap can the community expect?
We expect the overall token swap to be a rolling process, with different exchanges facilitating their respective users for the swap at different dates, in different batches over the coming months. We will send advance notice to our communities on various platforms before we end the token swap.

The current status of token swap can be found over at “Token swap progress (exchanges)”.

Can I store my mainnet ZIL in myetherwallet? If no, what can I use?
No. You will need a wallet that supports mainnet ZIL. For the list of supporting wallets, you may wish to refer to “Wallet supporting mainnet ZIL”.