Token Grant v2
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# So you've been offered an MPC token grant
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What now?
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1. You sign the contract. (Signing date)
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2. Your tokens will start vesting at a date mentioned in the contract. Each vesting date represents the point at which point a fraction of the grant tokens are yours in a contractual sense. You do not control them yet, but in some sense you are owed them by the company. (Vesting date)
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3. Shortly after the vesting date these tokens will be moved to your PBC account. At this point you fully own and control them. (Control time)
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4. You sell the tokens, hopefully for bazillions. (Sell time)
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5. You pay roughly half of your bazillions to Skat.
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Obviously **nothing in this document is financial advice**. This is meant **to give
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an overview of what and how** is needed to cash out. Most of this will also be
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relevant if you want to keep an investment in MPC tokens, but I will not be
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covering that scenario in-depth. It assumes that you are paying danish taxes.
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Make sure you read up on [the tax effects of
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cryptocurrencies](https://skat.dk/borger/aktier-og-andre-vaerdipapirer/skat-paa-krypto-kend-reglerne-saa-du-undgaar-et-skattesmaek)
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yourself.
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## Overview
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Assuming a scenario where you want to sell your MPC tokens ASAP for money
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in the bank, you are probably looking on a flow of:
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1. MPC Tokens are moved to your MPC account.
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2. Transfer MPC tokens to Exchange A (Kucoin or gate.io)
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3. Exchange MPC tokens for more liquid tokens (USDT)
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4. Transfer liquid token to Exchange B (Kraken, Coinbase or Binance)
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5. Exchange liquid token for fiat (USD, EUR).
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6. Withdraw fiat to bank account.
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Most steps above occur within exchanges and financial institutes, but step
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2 happens directly on Partisia Blockchain, which requires BYOC
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(Bring-Your-Own-Coin) for transferring MPC tokens. There exists several BYOC,
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all of which must be transferred from another blockchain, with the easiest to
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acquire being MATIC, the native coin of Polygon Proof-of-Stake. I recommend
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buying enough to cover your entire token grant period:
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1. Buy BYOC through exchange or payments processor. Around 40-50 USD worth
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should be enough for the entire period.
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2. Transfer to MetaMask-accessible account.
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3. Deposit into your MPC account using the Browser's built-in BYOC bridging
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page.
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## Setting up accounts
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There are three primary ways for setting up accounts:
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1. Using a [Ledger Hardware Wallet](https://ledger.com/). This is at the intersection of easy and
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secure. This is my recommended method, and probably the most relevant for
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people reading this guide.
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2. Using a [MetaMask](https://metamask.io/) account directly. This is something
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called a Hot Wallet, which is easy to use, but leaves you open to hacking.
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Not recommended.
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3. Using a private key. Not easy, but can be made somewhat secure.
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These accounts will be used for receiving MPC tokens, transferring them, and
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acquiring BYOC.
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I will only be covering Ledger, as that is what I will be using.
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### Ledger Guide
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[Ledger Hardware Wallet](https://ledger.com/) only works in Google Chrome and Chromium.
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Setup guide:
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1. Acquire a [Ledger Hardware Wallet](https://shop.ledger.com/), cheapest model
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is fine.
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2. Setup your Ledger Hardware Wallet using the built in setup guide. Remember
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to backup your seed phrase as instructed.
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3. Download Partisia Blockchain App from Ledger Live.
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4. Install [MetaMask for Chrome](https://metamask.io/).
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5. [Connect MetaMask to your Ledger](https://support.ledger.com/hc/en-us/articles/4404366864657-Connect-your-Ledger-to-MetaMask?docs=true).
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You are now ready for using your Ledger Hardware Wallet for acquiring BYOC and
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for transferring MPC Tokens.
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## Selecting exchanges
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MPC tokens is currently only traded only on a [few less reputable
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exchanges](https://www.coingecko.com/en/coins/partisia-blockchain).
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Ideally you would be exchanging to fiat currency and withdrawing to bank account at
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the same exchange, but not all exchanges allows for fiat withdrawing, and not
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all exchanges list MPC pairs, so you might need to do a multi-exchange setup.
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In an multi-exchange setup you would exchange MPC for a well established token
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(USDC, USDT, EURC, BTC, ETH) at one of the above-mentioned exchanges, and transfer
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these to a more reputable exchange like Coinbase or Kraken. A stablecoin might
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be preferable as inter-exchange currency, as these (partially) reduce your
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exposure to crypto-related volatility, and can possibly ease your tax
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documentation burdens.
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### Exchange Overview
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Includes exchanges where MPC is listed, and top 10 on both [CoinGecko](https://www.coingecko.com/en/exchanges) and [CoinMarketCap](https://coinmarketcap.com/rankings/exchanges/). Information may be outdated, DYOR.
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Ordered by relevance and personal preference:
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- [KuCoin](https://www.kucoin.com/): Listing exchange. No fiat withdraw. [Medium risk of collapse](https://manifold.markets/Base/the-next-crypto-exchange-to-file-fo).
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- [Gate.io](https://www.gate.io): Listing exchange. No fiat withdraw.
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- [Bitfinex](https://www.bitfinex.com): Listing exchange from Hong-Kong. [Allows fiat withdraw ($10000 minimum)](https://support.bitfinex.com/hc/en-us/articles/900007648263-How-to-make-a-Bank-Wire-Withdrawal-at-Bitfinex). Low liquidity, may risk slippage! [Medium risk of collapse](https://manifold.markets/Base/the-next-crypto-exchange-to-file-fo).
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- [Kraken](https://www.kraken.com/): Based in San Francisco. Well-regarded and personal favorite. [Allows fiat withdraw](https://support.kraken.com/hc/en-us/articles/360048656092-How-to-withdraw-funds-from-your-Kraken-account). [Low risk of collapse](https://manifold.markets/Base/the-next-crypto-exchange-to-file-fo).
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- [Binance](https://www.binance.com): Chinese and largest crypto exchange post FTX. [Allows fiat withdraw](https://www.binance.com/en/support/faq/how-to-withdraw-eur-from-binance-via-sepa-bank-transfer-fda6235094964faf8084902c8da94687). [Some risk of collapse](https://manifold.markets/MarcusAbramovitch/will-binance-collapse-before-the-en)
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- [Coinbase](https://www.coinbase.com/): Second largest exchange, based in San Francisco. Runs USDC and EURC stable coins. [Allows fiat withdraw](https://help.coinbase.com/en/coinbase/trading-and-funding/buying-selling-or-converting-crypto/how-do-i-sell-or-cash-out-my-digital-currency). [Some risk of collapse](https://manifold.markets/SpencerGreenberg/what-is-the-chance-that-coinbase-go).
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- [HTX](https://www.htx.com) (formerly **Huobi**): Formerly Chinese-based Exchange. [Allows fiat withdraw](https://www.htx.com/support/54929997851541). [High risk of collapse](https://manifold.markets/itsTomekK/will-huobi-be-insolvent-by-the-end-d6ca4a840d2b).
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- [Crypto.com](https://crypto.com): US specific? Based in Germany. [Allows fiat withdraw](https://help.crypto.com/en/articles/3857197-fiat-wallet-usd-withdrawal-via-ach). [High risk of collapse](https://manifold.markets/Base/the-next-crypto-exchange-to-file-fo).
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- [Binance US](https://binance.us): US specific? [Allows fiat withdraw](https://support.binance.us/hc/en-us/articles/360047428893-How-to-Withdraw-via-ACH). [High risk of collapse](https://manifold.markets/Base/the-next-crypto-exchange-to-file-fo).
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- [Bybit](https://www.bybit.com/): [Allows fiat withdraw](https://www.bybit.com/en/help-center/article/FAQ-Fiat-Withdrawal). Unknown risk of collapse.
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- OKX
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- Upbit
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- Bitget
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## Taxes and Paper Trails
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First and foremost: Document absolutely everything, and keep a paper trail. This will be
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useful for when Skat and your bank comes knocking, asking about your sudden
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acquisition of bazillions of kroner.
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Examples of documents to maintain and send to relevant authorities:
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- Maintain a spreadsheet of what you did, when and why.
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- Emails and documents from exchanges
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- Links to (and maybe screenshots of?) transactions in [the Browser](https://browser.partisiablockchain.com/)
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- Your MPC token grant contract is crucial in explaining the arrangement
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- Contact information for your boss and [Partisia Applications](https://datacvr.virk.dk/enhed/virksomhed/39454882).
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Secondarily, read up on: [Skat på krypto: Kend reglerne, så du undgår et skattesmæk](https://skat.dk/borger/aktier-og-andre-vaerdipapirer/skat-paa-krypto-kend-reglerne-saa-du-undgaar-et-skattesmaek)
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Thirdly: The construction used in the contract is untested and might have
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unintended tax consequences. The contract was meant to mirror a traditional
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danish stock-based bonus contract, and attempts to fit into a known rule (for
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stocks at least) where taxes are delayed until the _sell time_, but with
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a clause that the asset must be paid back if the employee dies.
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There are to my understanding two ways Skat can interpret the contract:
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1. The contract more or less fits the rule, and taxes are computed at the
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_sell time_, amounting to roughtly 52% of the price.
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2. If the rule is not accepted, it would be most natural for taxes to be
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computed at the _control time_, based on the most recent price, as this is
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the point where you actually gain access to the tokens. This interpretation
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incurs volatility risks, both for the employee, as they in effect acquire
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a huge tax debt at the same time they acquire their tokens, and are motivated
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to sell ASAP to cover this debt, but also for the MPC token ecosystem, as the
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associated selling pressure may drive down prices.
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The first interpretation would be preferable, as it would allow the employee to
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cash out in stages and speculate with no risk of indebting themselves, and
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would allow the employee to delay steps 1. through 7. for as long as they liked. As of
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writing (marts 2024) it is still unknown which interpretation Skat will employ,
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and I recommend acting as if the second interpretation is in effect.
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## Example flow and report
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| What | Input | Price | Fee% | Fee of Input | Output |
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| PBC deposit | N/A | N/A | N/A | N/A | 10000 MPC |
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| Kucoin deposit | 10000 MPC | 1/1 | 0% | 0 MPC | 10000 MPC |
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| Kucoin exchange | 10000 MPC | 0.4 USDT | [`0.2%`](https://www.kucoin.com/vip/level) | 20 MPC | 3992 USDT |
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| Kucoin withdraw | 3992 USDT | 1/1 | [`0.8 + 0%`](https://www.kucoin.com/vip/level) | 0.8 USDT | 3991.2 USDT SOL |
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| Kraken deposit | 3991.2 USDT | 1/1 | [`0`](https://support.kraken.com/hc/en-us/articles/360000292886-Cryptocurrency-deposit-fees-and-minimums) | 0 USDT | 3991.2 USDT |
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| Kraken exchange | 3991.2 USDT | €0.91 | [`0.4%`]((https://support.kraken.com/hc/en-us/articles/360000292886-Cryptocurrency-deposit-fees-and-minimums)) | €15.9648 | |
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| Kraken instant SEPA withdraw | 3991.2 USDT | 1/1 | [`2`](https://support.kraken.com/hc/en-us/articles/360000423043-Cash-withdrawal-options-fees-minimums-and-processing-times-) | €2 | €3617.464032 |
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Contrast with a theoretic value of `10000 MPC * (0.4 USDT/MPC) * (0.91 USDT/€) = €3640`, resulting in `€22.535968` lost to fees, and `€3640 * 52% = €1892.8` in taxes, giving you `€3640 - €1892.8 - €22.535968 = €1724.664032`, giving you `0.473809%`.
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# Old and Scratchboard
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## Practical
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Preparation:
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- [ ] Generate a private key.
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* Use at least 256 bits (64 bytes)
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* Consider using a vanity key generator to personalize and to help verificstion.
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* Keep this safe; this is the password to transfer MPC tokens.
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- [ ] Transfer BYOC/gas to your account in preparation for transferring your
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MPC tokens.
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- [ ] Prepare for selling MPC tokens:
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* [ ] Select the exchange(s) you intend to use for selling MPC tokens. [See below.](#selecting-exchanges)
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* [ ] Sign up and perform know-your-customer procedures. These might be
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somewhat heavy-handed. For example Kucoin requires both document
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verification and face verification.
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- [ ] Possibly inform your bank about the situation. They are required by law
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to perform due-diligence to avoid white washing, and will
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question incoming transfers of bazillions of kroners.
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When acquiring tokens:
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0. MPC Tokens are moved to your account.
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1. Transfer MPC tokens to exchange hosted account.
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2. Exchange MPC tokens for more liquid tokens (BTC, ETH, USDT, USDC?)
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3. Transfer liquid token to reputable exchange
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4. Exchange liquid token to fiat (USD, EUR).
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5. Withdraw fiat to bank account.
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6. Report and pay taxable income.
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7. Send relevant documents (see below) to bank and tax authorities.
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