Web3 Foundation Claims DOT is a Piece of Software and Not a Security - Blockchain.News

Web3 Foundation Claims DOT is a Piece of Software and Not a Security

Godfrey Benjamin Nov 05, 2022 17:00

Web3 Foundation has made a conclusion based on SEC terms that Polkadot is not a security

Web3 Foundation Claims DOT is a Piece of  Software and Not a Security

Web3 Foundation, a non-governmental organization headquartered in Zug, Switzerland has released an announcement that they have come to the realization that Polkadot’s native token (DOT) is only software and not a security because it has morphed.


Their view is consistent with that of the U.S Security and Exchange Commission (SEC).


In a recent press statement made by Web3 Foundation's Chief Legal Officer, Daniel Schoenberger, the staff of the United States SEC Strategic Hub for Innovation and Financial Technology (FinHub) released a framework for Investment contracts to analyze digital assets. 


The framework suggested that almost all digital assets that are being sold for the purpose of fundraising were initially meant to be a security in the hands of the initial buyer. 


The framework, however, also suggested that there also exists factors that could result in complaints, for example, a complaint that exists when initial digital assets initially offered are sold as a security and to be re-evaluated at a later date. This security therefore no longer exists under federal security laws in the U.S because it has morphed.


Daniel also highlighted that it has been three years since the interaction between Web3 Foundation and SEC. He reiterated that their discussions have been positive and have brought about a deeper understanding of the issues raised by the SEC while seeking solutions to address their concerns.


Web3 Foundation has also developed a workable theory on how token morphing can be adopted for decentralized projects such as Polkadot and other digital assets because aside from being offered for fundraising purposes lacks security-like properties.


The Launch of Polkadot


Polkadot was developed in 2016. The Polkadot is a representation of the vision of the Web3 Foundation founder Dr Gavin Wood to develop a decentralized internet which is known as Web3.


Polkadot is a sharded blockchain, which means it connects multiple chains into a single network, allowing them to process and exchange data in parallel while maintaining strong security guarantees between chains. By parallelizing the workload, Polkadot addresses major issues that have previously tempered with decentralized application development.


In a bid to delve into the digital educational sector, Polkadot recently partnered with edX to promote educational courses. 


The course outline covers blockchain and Polkadot technology fundamentals, as well as the Substrate blockchain framework and the Rust programming language. Users are permitted to try the courses free of charge without prior knowledge or experience.

Image source: Shutterstock