Frequently Asked Questions


Frequently Asked Questions

The MOD Token

The Modum token, listed as MOD, is an ERC-20 compatible token, which means its smart contract runs on the Ethereum blockchain. You can interact with it— transfer, store, use the smart contract— using any Ethereum-based wallet. For more information on where to store your tokens, refer to question 6 of this section. 

The Modum token, or MOD token, comes with profit-share and voting rights. For more information on the profit-share and voting processes, refer to questions 8 through 13 in the section dedicated to profit-share and voting.

There is no universal definition of a security. In every jurisdiction, regulators have different assessment criteria. Swiss regulators have defined a guidance for ICOs where they classify tokens into three categories: a payment token, a utility token, and an asset token. The Modum token meets the definition of the third category and is considered as an asset token. Asset token classification has no repercussions on the company. We have taken care to be compliant with existing laws and regulations before our token sale.

Due to the currently planned Token-Equity swap (see here), we do not actively promote the trading of the MOD token and do not provide any advice on how to buy or sell the MOD token. However, you can exchange information with others on the Modum Discussion Group Telegram channel.

Answer Updated on 20 February 2020

The Modum token is an ERC20 token, which means you can store it on any wallet that supports Ethereum (MyEtherWallet, Trezor, Ledger, Mist, Parity, etc.). All you need is a valid Ethereum address. The tokens can also be stored on the exchanges that trade the MOD token. However, storing your tokens on exchanges comes with a different set of risks. For more information on where to keep your tokens for voting and dividend purposes, please refer to question 9 in the "Profit Sharing and Voting” section.

No, staking the token is not necessary. We believe that any measure that reduces liquidity and trading freedom is detrimental to the value of the token. Therefore, we will not put into place a mechanism that rewards long-term holders over short-term holders.

Due to the planned Token-Equity swap, we are not pursuing any new listings. See Media Release from August 2019 for more information. 

Answer Updated on 20 February 2020

Profit Sharing and Voting

The board of directors decides if and how much of a dividend is to be paid. If a dividend is determined, a payment equivalent to the defined dividend will be forwarded to all MOD token holders. The payment equivalent is always 100% of the defined dividend. The amount in CHF will be converted to ETH and sent to the Modum smart contract. The smart contract will evaluate the current holdings and distribute the profits to MOD token holders in ETH. The tokens that are locked for the shareholders of Modum do not come with profit-participation rights while they are locked.

At a pre-defined time, in advance of the profit sharing payout, the smart contract will take a snapshot of all wallet addresses containing MOD tokens. The snapshot will be announced at least four (4) weeks in advance. For-profit sharing purposes, you must own the wallet where your tokens are stored at the time of the snapshot. Token holders will need to withdraw their tokens from any exchange and store them on a private wallet before the snapshot is performed. After the snapshot, tokens can be transferred back to the exchange platforms, the right to a profit share remains with the address containing the tokens at the time of the snapshot.

Each token holder will need to claim their profit share using our smart contract. With your private key, you will prove ownership of your MOD tokens. The smart contract will identify the number of tokens in your wallet and distribute the profit share accordingly. A minimum of one token is required to receive the dividend and there is no staking. Because the dividend claim represents a transaction on the Ethereum blockchain, you will need a very small amount of Ether to pay for the transaction fees.

You can use Modum’s web app which will be launched when a payout date is determined and various Ethereum based wallets to claim your share of the profit. We will provide detailed instructions on how to use either option when a payout date is determined. 

The smart contract is open source. It can be reviewed here.

After the snapshot, you will have 18 months to claim your share of the profit. All funds that remain unclaimed after 18 months will be redistributed using the same process to all addresses containing MOD tokens.  

If you leave your tokens on an exchange at the time of the snapshot and the exchange owns the private key to your address, then the exchange, for the purposes of Modum’s smart contract, owns your tokens. Although it is highly unlikely, the exchange would have the capacity to claim the profit share for themselves without any obligation to forward it to the owners of the tokens. Most likely, you will not receive your share of the profit. Refer to question 9 for more information about how to claim your profit share.

Swiss law requires companies to allocate a minimum amount of their net profit to legal reserves. The rest can be reinvested into the company or used for dividend payments. The Board of Directors of Modum will decide how much will be reinvested and how much will be paid as dividends based on their assessment of what is in the best interest of the company, the token-holders, and the shareholders.

Every MOD token in circulation is entitled to one vote. Token holders will vote to determine if the Modum team has reached the goals set out in the pre-defined milestones. A positive vote will release a portion of the locked MOD tokens to the team. Locked tokens for Modum do not come with voting rights while they are locked.

Each voting period will be announced on our website, social media channels, and in our token holder newsletter. The voting period will be stated along with all relevant details regarding the milestone achievement. These will be followed by explicit instructions on how to vote using our web application. Because the voting represents a transaction on the Ethereum Blockchain, you will need a small amount of Ether to pay for the transaction fees.

While every vote is appreciated, there is no obligation to vote and there are no consequences for you if you do not participate. Refer to the milestone overview in our whitepaper on page 13 for more information.

The open-source smart contract enables the voting process as well.

Company Structure

No, the Modum token does not represent a share of the company. The relationship between Modum and token holders is a contractual obligation as outlined in the terms of token sale. Shareholders will not receive any share of the profit unless they own tokens. As compensation, shareholders receive the 9 million locked tokens if we achieve the pre-defined milestones.

The shareholders of Modum are divided into three groups: the board of directors, external investors, and the team. The shareholders will receive their pro-rata share of the released tokens as compensation if Modum achieves the pre-defined milestones.

In order to align the interests of token holders and our team, 9.9 million tokens have been locked for internal distribution after achieving predetermined milestones. This will ensure that our team is incentivized to further advance the company in ways that benefit our token holders. The locked MOD tokens will be released to the Modum shareholders to retain profit-sharing rights within the company, as determined by token holder voting outcomes at each milestone. Detailed information regarding the voting principle and profit share process can be found in the Modum whitepaper as well as in questions 8 to 13 in the “Profit Sharing and Voting” section.

Over the next three years, if Modum achieves its milestones and the voting is positive, shareholders will receive 9 million tokens. Shareholders will become token holders sharing the interests of the original token holder community: to increase the value of the token, make sure the profit share payouts are balanced, and potential deals are fair. 

The contractual obligation between Modum and the token-holders remains intact in the case of an acquisition. The acquiring company is bound to this agreement and the token preserves voting rights and profit sharing rights.

However, the exact implications of a potential deal cannot be foreseen at the moment as they are subject to negotiations between both parties. However, our token model ensures that the interests of the shareholders and token holders are aligned.