Hi everyone,

We recently made two posts on the NeuCoin Forum with updated information regarding:

• How the team's, angels’ and foundations’ NeuCoin token holdings will be transparent over time
• How the foundations plan to distribute NeuCoins from launch through yearend 2016

Please find these two posts below here as well, since they answer many of the questions raised by critics about how the founding team or foundations are unaccountable. Both are long reads but pretty important nevertheless!


There are huge potential benefits to a cryptocurrency that uses a premine to:

• acquire a large user base through giving out small numbers of tokens to large numbers of users
• finance the development of the cryptocurrency’s utility over time

However, all cryptocurrencies that follow this strategy (Ripple, Stellar, NeuCoin) face the challenge of winning the trust of their communities: specifically, how can users trust that the founders and insiders will in fact use the premine over time in a way that benefits all of the crypto’s holders, as opposed to primarily the founders or insiders themselves.

This posting will explain the steps that the NeuCoin Project has taken and will be taking to demonstrate that the foundations, founding team and insiders are indeed working to benefit the wide community of NeuCoin holders.

Coin holdings restricted for use or sale
First of all, unlike any other cryptocurrency project, all members of the founding team, angel investors, and service providers of the NeuCoin Project have agreed to the imposition of use and sale restrictions on the NeuCoin tokens they have received or will receive. Restricted coins become unrestricted according to the following schedule:

• 2% of holdings per month in the first year
• 3% per month in year two
• 4% per month in year three
• 5% per month in year four
• 6% per month in year five
• After year five, all restrictions expire

See explanation of the restriction mechanics at the bottom of this post

Publicly visible addresses and verifiable transactions
Second, all NeuCoin tokens owned by the foundations, as well as all restricted NeuCoins (whether owned by founders, angel investors or service providers) will be held and mined in published addresses clearly visible and verifiable on the NeuCoin blockchain.

Each of the three foundations will have two publicly visible addresses: one for long-term holdings and the other for near-term transactions. The entire founding team will share one address controlled by the NeuCoin Utility Foundation for their restricted NeuCoin tokens. At the end of each month, 2% (in year one, etc) of those token holdings will become unrestricted and distributed to team members. Likewise, all of the angel investors’ restricted NeuCoin tokens will be held in a single segregated address controlled by the NeuCoin Utility Foundation, and again, at the end of each month the NeuCoin tokens that become unrestricted will be distributed to the individual angel investors. In the same manner, all restricted NeuCoin tokens awarded to service providers (exchanges, distribution partners, game developers, contractors, etc) that increase the utility and value of NeuCoin will also be held in an additional segregated address controlled by the NeuCoin Utility Foundation, and again, at the end of each month the NeuCoin tokens that become unrestricted will be distributed to the individual owners. All of the balances held by these entities along with the monthly transfers will be visible on the blockchain and easily verifiable by any outside party.

Reports on distribution of NeuCoin tokens and sales for fiat
Third, the NeuCoin foundations will publish quarterly NeuCoin distribution reports and provide details on material transactions. They will also report any sales of NeuCoin tokens on a monthly basis.

Illustration of how the re-sale restrictions work in practice
Consider an angel who owns 1 million NeuCoin tokens on the day of launch. For the first month after launch, the angel cannot sell any NeuCoins; indeed the angel does not even have any access to the private keys for his/her tokens. During the month, assume the angel’s NeuCoins grow to 1.08 million due to POS rewards. At the end of the month, 2% of 1,080,000, or 21,600, would become unrestricted and sent to the address of the angel’s choice. At the beginning of month two, the angel has 1,058,400 restricted NeuCoins. During the month, assume this restricted coin balance grows 7.9% from POS rewards to approximately 1,142,000 coins. At the end of the second month, 2% of this balance, or 22,840 coins, become unrestricted, and will be sent to the angel’s address. And so on.

Next post will cover Year one distribution plan.