TL;DR:
- Coinbase won’t support Gala Games’ move to roll out an upgraded GALA token on May 15 through an airdrop to existing holders.
- Gala’s V2 issuance consists of moving to a new smart contract and sending Gala V1 holders the identical amount of tokens through the new Gala V2 contract.
- The exchange announced that it will disable trading on May 12 for the GALA token (Gala V1) and will not let holders receive the new airdropped token (V2), nor does it currently plan to provide any way to swap the tokens after the fact.
Cryptocurrency exchange Coinbase has come under fire from Gala Games, a popular Web3 gaming platform, for refusing to support the platform’s upcoming token upgrade. Gala Games plans to roll out an upgraded version of its GALA token via an airdrop to existing holders on May 15, but Coinbase has announced that it will not support the transition, leaving many of its users unable to take advantage of the new token.
In a statement, Coinbase announced that it will disable trading for the current GALA token (Gala V1) on May 12 and will not allow holders to receive the new airdropped token (V2). The exchange has also stated that it does not currently plan to provide any way for users to swap the tokens after the fact. This move has angered many Coinbase users who hold GALA tokens, as they will now be unable to take advantage of the new features and functionality that the upgraded token offers.
Holders on Coinbase will still be able to withdraw their V1 tokens to a self-custodied or hardware wallet after the V2 token goes live, but they will not be able to do much else with those V1 assets after the May 15 drop. In order for Coinbase users to convert their old Gala tokens, they will have to move their Gala V1 to a wallet before May 15 and wait to receive the new token. Gala has advised holders who have Gala V1 in a liquidity pool or held in smart contracts to withdraw their tokens in order to ensure receipt of the new token. After May 15, Gala V1 will have “no support or usability,” according to the firm.
Gala Games has stated that the token upgrade is an important and necessary step for the cryptocurrency. The new token’s smart contract, which contains the code that powers things like tokens, NFT projects, and decentralized apps, will offer “enhanced burn mechanisms, security enhancements, and future upgradeability,” according to a Gala blog post. However, Coinbase has remained tight-lipped about its refusal to support the upgrade, leaving Gala Games and its users in the dark as to the reasons behind the decision.
Gala Games’ President of Blockchain, Jason Brink, has taken to Twitter to voice his frustration with Coinbase’s decision, suggesting that the exchange may have an issue with the token upgrade’s issuance method. Brink argued that the V2 issuance is not a traditional airdrop, as Gala is not trying to give its holders freebies or extra goodies for owning their old token. Instead, Gala is simply doing what has to be done to upgrade the contract. In this case, it consists of moving to a new smart contract and sending Gala V1 holders the identical amount of tokens through the new Gala V2 contract.
Coinbase’s refusal to support Gala’s token upgrade is not the first time the exchange has faced criticism for its cautious approach to token issuance. The exchange is currently facing increased regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC), which has caused it to take a more cautious approach to token listings. While Coinbase just reported a 22% revenue bump compared to the previous quarter, it is still facing a number of legal challenges, including a recent lawsuit for allegedly violating the Illinois Biometric Information Privacy Act due to its collection of user data. An ex-Coinbase product manager also pleaded guilty to criminal charges of insider trading earlier this year.
In response to Coinbase’s decision, Brink has remained optimistic that the exchange will ultimately reconsider its stance, following Gala Games’ additional explanation of its approach. “It is my hope that once there is a little bit of clarity, they will decide to support the V2 token,” Brink said.
Overall, Coinbase’s refusal to support Gala Games V2 token airdrop could be viewed as a concerning signal for the cryptocurrency industry. While Coinbase has not provided a clear reason for its decision, the exchange has faced increased regulatory scrutiny from the SEC and other legal challenges, which may be impacting its approach to token issuances.
However, it’s worth noting that other exchanges, such as Binance and Kraken, have announced their support for the Gala V2 token airdrop. This suggests that Coinbase’s decision is not a blanket refusal to support all token upgrades, but rather a specific issue with Gala Games and its token issuance method.
It remains to be seen whether Coinbase will ultimately reconsider its stance on the Gala V2 token. The fact that the exchange has not provided a clear explanation for its decision has frustrated many in the cryptocurrency community, and it may face backlash from Gala V1 holders who are unable to participate in the airdrop.
For its part, Gala Games has been proactive in advising its users on how to prepare for the token upgrade and ensuring that holders of Gala V1 are able to receive the new Gala V2 token. The company has also provided a clear rationale for the upgrade, highlighting the enhanced burn mechanisms, security enhancements, and future upgradeability that the new smart contract will provide.
As the cryptocurrency industry continues to evolve and mature, it’s likely that we will see more token upgrades and airdrops like the one being conducted by Gala Games. Exchanges like Coinbase will need to navigate these changes carefully to ensure that they are supporting their users while also complying with regulatory requirements and mitigating legal risks.
The Gala Games V2 token airdrop and Coinbase’s refusal to support it highlights the challenges that the cryptocurrency industry faces as it continues to grow and mature. While the reasons behind Coinbase’s decision are unclear, the fact that other exchanges have announced their support for the airdrop suggests that this is a specific issue rather than a broader policy. As token upgrades and airdrops become more common, exchanges must carefully navigate these changes to ensure that they provide their users the best possible experience while managing risks and complying with regulations.
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