Thank you for taking the time to read our claims. Since then, we have seen various opinions on Twitter and Telegram.
In this Medium, we would like to address some of the questions many of you have raised. We are not from an English-speaking country, and we are not perfect at English.
So, our writing structure and style may differ significantly from your culture. We would appreciate it if you could understand this and judge us with the essential contents.
- What exactly are we, Juno whale?
- Our perception of airdrops
- Concerns about actual distribution to users
- About Osmosis airdrop
- About Juno airdrop and Prop4
- About Prop 16 and our proposal
- Why do we sell $OSMO and $JUNO?
- About our conversations with Wolfcontract
- About the promise to limit slippage to 1%
- Selling of some assets on Binance
- How we transfer $OSMO and $JUNO to clients in the future
- Conclusion
We are a fund-like service looking forward to the development of the Cosmos Ecosystem.
In May 2020, Bitcoin was halving, and the entire cryptocurrency market showed signs of a boost. Cosmos was not as valued as much as it is today, except for a few early adopters.
We were among the first to see the future potential of $ATOM, and we started an organization to invest actively and stake $ATOM.
The organization aims to increase clients’ assets by holding $ATOM for the long term while working on expanding awareness of Cosmos to increase the market value of $ATOM.
Therefore, we have been busy promoting the potential of Cosmos and our service by going around various areas to get as many people as possible to understand what Cosmos is all about.
We also explained to our clients that we do not make short-term investments but rather long-term investments of at least one year or longer and that we would limit withdrawals for a certain period of time.(The withdrawal restrictions were lifted in December 2021, and assets continue to be returned to clients.)
Our activities were recognized by many users. As a result, 33417 users have raised a total of $143,538,500 and acquired 10,200,961 ATOM.
The purpose of the 33417 participants in our service is to maximize the growth of their assets.
To maximize the profit of these 33417 people, we’ve deployed GAME and DEBO, validator nodes, and provided ATOM staking services.
In the unlikely event of a validator node slash, penalties will be incurred. In order to mitigate the risk of slashing clients’ assets, the validators was divided and managed.Of course, each validator and sentry node has an independent environment. Since the total voting power does not change when the validator is divided, we thought it would not be a problem.
Some of the responses to our Medium posted yesterday pointed out that our fund is for our own profit, but of course, we do this for the profit, so we receive 10% of the assets raised by our users as a commission.
In addition, the majority of our clients had limited knowledge of blockchain and had trouble using apps in English, so they couldn’t manage their own wallets properly as well as staking without our help.
We have made the process of asset management very simple for anyone to use our service.
False claims have been made saying that we are a Ponzi scheme scam group, our clients are full of victims, and that they don’t increase their assets. They are completely untrue. Our service is totally different from Ponzi schemes, which have an infinite reward chain scheme that is clearly destined to fail.
As we have stated in the previous Medium, our carefully calculated reward system allows us to increase client assets in dollars without making anybody the victim.
Users have no problem withdrawing ATOM because it is not a phantom profit that cannot be withdrawn, as is the case with Ponzi schemes.
There are even claims that we are depriving people of seed phrases on Telegram and Discord. This is completely untrue. We are frustrated that people around core dev are using expressions that imply such false claims are true.
The blockchain is all open. Anyone can verify that there is no record of such fraudulent activities in our transactions on the chain.
Don’t Trust, Verify
Anyway, while this is not directly related to this case, the team running this service and the core members who’re developing GAME are almost the same. Please see the following Twitter accounts if you want to check our activities until now.
https://twitter.com/_GAME_official
https://twitter.com/takumiasano_jp
Would a representative of a Ponzi schemer show up with his face made public and disclose information about himself? Don’t trust the groundless rumors; check and judge by yourself.
https://twitter.com/takumiasano_jp/status/1503269224227422209?s=20&t=_tArytwetvjwwGdLOZBBTA
We would like to be the first to inform you that some people have pointed out that the airdrop tokens we currently hold and manage were embezzled from our clients, but this is not the truth at all.
As a matter of fact, when we launched our service in May 2020, we did not anticipate the current airdrop rush within the cosmos ecosystem.
Therefore, there was no predetermined method of handling airdrop between clients and us.
However, it is clear that the tokens received by airdrops belong to the clients, as clients’ ATOM we manage is their properties.
So, we fully recognize that as well.
There are several concerns regarding the actual distribution of airdropped tokens to clients. While we recognized the undoubted fact that tokens are their property, as explained above,
- The amount we got is far less than what our clients would typically get if they managed it by their own wallet due to whale cap and formula. We need to help them understand how the cap and the calculation formula work to convince them.
- We also need to provide support to some clients who do not speak English or have limited knowledge of the blockchain. To completely solve these problems with limited resources, we decided to put the airdrop distribution on hold.
In July 2021, the highly anticipated airdrop of Osmosis was executed within the cosmos ecosystem, and at the time of receiving the $OSMO, we discussed within our team how we should return this currency to our clients.
However, the amount of $OSMO we received was significantly less than what users would have received because the square root was used as the whale cap even though ATOM was managed with multiple addresses for security purposes.
According to our original fund guidelines, no ATOM withdrawals were allowed until December 2021. During these early months, we decided that any early trading of $OSMO and subsequent withdrawals would not be necessary. We decided to put it on hold and not take any major action until December 2021, when the service would actually end, and ATOM restrictions would be lifted.
In the meantime, we have been operating at a minimal level, increasing the number of tokens by staking while converting a portion of the rewards we receive into ATOM. Even in the worst-case scenario of an $OSMO crash, our clients would still be able to profit.
Because the management costs of daily operations like claiming and restaking of $OSMO, which was distributed across 53 cold wallets, were too high, they were combined into a single address to facilitate this operational act. Again, this was a trade-off between management cost and security risk, and given the early stage of the project at the time of the airdrop, reduction of management costs was a priority for us.
In October 2021, Juno airdrop was distributed, and at first, we took the same approach as $OSMO by consolidating multiple addresses into one in terms of managing costs.
However, something unexpected happened to us on October 7, 2021: Juno Prop4. Prop 4 is a proposal to confiscate 90% of our assets due to the suspicion that we may have gamed the airdrop fraudulently.
We were baffled at the time.
We thought we had nothing to do with any wrongdoing.
Still, we understood the community’s view that our large number of tokens at one address was dangerous for the Juno ecosystem. Therefore for a while, we thought about returning the token.
However, when we surveyed our closest clients, we found that, of course, this was unacceptable. It would go against the purpose of maximizing their profit.
Then we decided that we should follow the Juno community’s decision first, so we put the vote Abstain and let the community make the decision. At this time, we also sent a message to Wolfcontract to let them know what we thought.
As a result, Prop 4 was rejected.
We were relieved, but one big problem happened. Our Juno address was recognized by so many Juno community members, meaning that our every move has a significant impact on the community.
This is why it becomes impossible for us to take action easily.
Until this issue arose, we would unbond Osmo/Juno and send them to users after our service ended and withdrawal limits of ATOM were lifted.
However, that approach turned out to be practically tricky because it was clear that it would cause a lot of concern in the community that we might dump if we were to unbond all of $JUNO.
Again, we discussed this problem in our team and interviewed our closest users to handle the situation.
We found that a certain number of our clients did not expect the future value of Juno and were willing to sell immediately due to the risk of inflation. (Users are hoping for the Juno future as well)
Then we considered the risk of unbonding all $JUNO and returning them to the users.
The return would make a large number of $JUNO under our management move freely.
Therefore, with Juno’s less liquidity at the time, even sellings by a few users could result in a dump, potentially destroying the ecosystem.
This was the scenario we most wanted to avoid.
Not only would it bother the Juno ecosystem, but it would also be wrong to maximize the benefit of our users.
We did not want to destroy the good relationship we had built with Wolfcontract, too.
The most important thing for us is to wait until the liquidity becomes large enough that it would not be a problem for us to sell without destroying the Juno ecosystem.
We then decided to manage Juno at our discretion to maximize the return to our users in the future.
This was when we found ourselves caught in a dilemma between the Juno community and our clients.
We also feared that revealing $JUNO and $OSMO airdrops to our clients would cause them to request immediate withdrawals (which would lead to the destruction of Juno). Hence, we withheld information from all but a few private large users. Our act of holding the $JUNO and $OSMO tokens was not an act of claiming ownership away from our users.
We told some private users that we would eventually return significant profits through $OSMO and $JUNO because of their potential.
Although we tried to protect the ecosystem and our clients, it is now clear we should have explained the whole process earlier to inform both our clients and the Juno Community.
Due to our fundamental problem of poor English, we failed to actively express our stance as a whale in the Juno community leading to misunderstanding, and Prop16 was submitted.
Wolfcontract also attacked us. We thought we had a good relationship, so we were very confused.
However, we cannot ignore what has been submitted. We all feel a great deal of responsibility for making this announcement about the return at a time when the Juno of our client has been put on trial and at risk.
https://gist.github.com/junowhale/4179ac072b91f66fcb56e0ad76532ce9
Our proposal is to Continue to stake all Juno we currently hold forever. We will also provide liquidity to Junowap with the currency pair whenever we sell and convert the reward to another currency. The Liquidity definitely will not be unbonded for at least two years from now.
For the majority of the members in the Juno community, we feel that we have to make a mighty concession, as it is clear that simply claiming justice is not acceptable in a situation where there are huge advantages to confiscating our assets, regardless of the fact whether we’re right or wrong.
If Prop 16 is not rejected, we intend to make the above proposal in Prop 17.
In the case that Prop 16 is rejected, we will proceed with returning all assets to users while giving utmost consideration to not impacting the market.
As we have said many times, our purpose is to maximize clients’ profits. So on that point, we would like to share our perspective on Osmo and Juno’s views.
First of all, we have great respect for the Juno and Osmosis core teams, the founder, and the community.
It is a great aspiration for the Cosmos ecosystem that IBC connects application-specific chains to shape the Internet of Blockchains.
Osmosis, the most used and easy-to-use DEX in the cosmos ecosystem, and Juno, which released a chain that implemented CosmWasm earlier, are great projects that play a crucial role in Cosmos.
However, apart from the excellence of such projects, the Cosmos Ecosystem is currently experiencing a bit of late arrival of the Defi boom that occurred on Ethereum, BSC, Solana, Matic, and Avalanche.
We see this as a fragile and short-lived boom generated by immediate incentives rather than a boom caused by a belief in the project’s intrinsic value, ideology, and potential.
We think that the current boom in the ecosystem will be short-lived and will cool down, without exception, because of the very rapid nature of the boom and bust cycles. （We strongly believe that it will come back.)
To be honest, we think that this will be especially true for Juno compared to Osmosis, where there is a real demand for transactions.
We are expected to grow the clients’ assets. So from that point of view, we cannot continue to stand on the sidelines. Therefore, since we did not have the measures to immediately return $OSMO and $JUNO to our clients without affecting the ecosystem, we needed to ensure at least some of the profit was realized in order to prevent a large loss in asset value.
Therefore, we sold a part of $JUNO, and $OSMO gained staking rewards.
This was done at the same time as the selling requests from some large private clients. (We explained that we could only sell 10,000 $JUNO of assets in one day and that it was impossible to sell large amounts at a time.)
However, since the volume we sell in a day is only about 0.5% of our assets, and we’ve restaked most of the staking reward (we have re-staked a total of about 500,000 Juno so far). We hope community members understand that we do not intend to dump, and we believe in the long-term prosperity and growth of Juno.
Our sellings of $OSMO and $JUNO are not intended to destroy the market. That is obvious because the $JUNO price has increased although we sold it. We checked the liquidity and sold it not to have an impact on the market.
Also, some people seem to have misunderstood that we sold over 279k $JUNO at one time, which is also incorrect. (This is exactly what we stated in the previous statement).
However, we re-staked 260k $JUNO considering the impact on the market in the case we would have sold it. We’ve never sold that much amount.
You can check the truth from the actual rebonding transactions here.
https://www.mintscan.io/juno/txs/E1289E95F4EA9CFCE79FACFDC298327BEE47D31C808599DA40C1BF7D32BD7AC3 https://www.mintscan.io/juno/txs/BE80DB5994250B22ED0FB990F1F1F98D4CD9633389B6B143FA14FB357D07D5BE https://www.mintscan.io/juno/txs/EE65F7791A12CB4DFB6E3B8D4F4A85CDDAEA7D8D3AEEA4E26C3DEC7E7DE792D1 https://www.mintscan.io/juno/txs/666FD7F654301E5FD84F9EEE5840E67F93336FDBA38DC0F04B0ADE348E7FC20A https://www.mintscan.io/juno/txs/C80CAE7CEB38724BD3AF73758A86D84ACC5C110D62802CD75E658CBC682709BC https://www.mintscan.io/juno/txs/03F3199CB951921DE45E35E52C0C6A0311203D22DD2ABB62338B4E46609ACF2A
We would like to disclose our past conversations with Wolfcontract.
We feel it is vital for you to have a complete picture of how our relationship with Wolfcontract has developed and how the problem this time happened.
To avoid further misunderstanding, we would like to explain that we have large private clients close to the administration and many general clients. https://www.youtube.com/watch?v=V9fXH3RHmsM
In the conversations, Wolfcontract says “Hey Takumi”. We used a personal account as a Juno whale.
https://twitter.com/takumiasano_jp
In the conversations with Wolfcontract, we do not distinguish them and describe them as “clients” because there is no need to go into that much detail, but we referred to private clients in most of these conversations.
His acts are unethical. He unilaterally abandoned the conversation with us after the last one on February 17. He submitted such a Prop 16 five days before our mainnet(We’re separately working on GAME project) launch on March 16, 2022, to exclude us due to extreme fear of a Juno price drop.
Was there no other solution?
GAME has decided to postpone the mainnet launch until this issue is resolved to minimize damage to our reputation in the Cosmos ecosystem.
We still have the utmost respect for the Core1 team even with the potential risk to our GAME project.
We believe if COVID-19 had not happened and we had communicated face-to-face at least once, we would not have had this problem. It is an unfortunate situation.
Some people pointed out that we made transactions with slippage exceeding 1%.
https://www.mintscan.io/osmosis/txs/247EA70CAD42AB350C520E45024F6B058FA52CB48472838DE1B4625A30998D27 https://www.mintscan.io/osmosis/txs/D4D395B8A11F441F1A8535D27F4E20FD7F7B4844BAB5299867E20E8D576D23A5
The promise about limiting slippage to 1% was for the selling AFTER January 9, 2022, as proposed with Wolfcontract in DM, as we posted in a previous statement.
It seems that the expression “few months” was ambiguous and created a misunderstanding. Our current policy is 1% slippage maximum on transactions.
Within the Juno community, some members have pointed out that we sold $JUNO, converted it to $ATOM, and then sold it on Binance.
This is true. We sold both $JUNO and $OSMO.
I would like to make a statement as to why we sold them.
We believe that one of the most important factors in shaping the price of cryptocurrencies today, apart from the future value of Osmosis, Juno, and even Atom, is the massive quantitative easing and fiscal stimulus implemented by central banks and governments as a result of the global COVID-19 pandemic.
This has led to rapid inflation in many countries and has created a money glut in the markets.
There is no doubt that much of the flooded funds have flowed into the financial markets. Without exception, the cryptocurrency market has experienced a large inflow of funds.
COVID-19 helped to fuel the cryptocurrency boom generated by Bitcoin Halving in May 2020, but such a movement has been temporary and is slowly coming to a settlement.
Last October, the FOMC announced that it would initiate tapering toward March 2022. In addition, the central bank is planning to raise the key interest rate in 2022 to control excessively increased prices.
We believe this will bring the market boom to settlement. Therefore, we have decided that it is not rational to keep all of our assets in cryptocurrencies. We are selling some of our assets at once and converting them into USDC, USDT, UST, and other stablecoins.
However, when interest rate hikes come to an end, and the market turns from risk-off to risk-on, we are considering using these funds to maximize client assets by buying more $ATOM at a lower price.
Our selling was for that purpose, not a shortsighted, selfish, and stupid act of destroying the ecosystem to buy a mansion and live a luxurious life, as pointed out by Community.
Many of our clients who have communicated with us know that we would never do such a thing because they understand us.
Our acceptance of new customers into our service has concluded as of September 2021. From December 2021 until today, we have been executing the withdrawal flow of users’ ATOM by their applications.
With the withdrawals this month, 96% of ATOM will be completed. You can see almost all of the past withdrawals here. (Among them, a few % are withdrawn in BTC by user’s request.)
https://www.mintscan.io/cosmos/account/cosmos1wz86dc3lyweg8slhf482vxy5ymd0t58ckpn3nq
Many of our clients don’t speak English and do not know how to use the wallet. Therefore, creating easy-to-understand videos and preparing materials to show the process required for $ATOM withdrawals has taken time.
The same is true for withdrawals of $JUNO and $OSMO. First, we should prepare a system for withdrawals and create videos or materials for those who don’t know how to deal with their $JUNO. Then, finally, we will execute the withdrawal step by step.
As for $OSMO, we will transfer to the clients gradually, taking utmost care not to destroy the ecosystem while having conversations with clients and confirming the liquidity.
As for $JUNO, if Prop 16 is rejected, we will follow the proposal below that we have posted in previous medium post and transfer $JUNO to our clients little by little.
Stake all Juno we own forever. Sell the reward and if we change it to another tokens, we have to provide liquidity to Junowap with that token pair. Also, we can’t unbond the liquidity for 2 years from now.
We are open to suggestions from the Community on what we can do after the two year period to be fair to both the community and our investors.
If Prop 16 passes, we would still like to formally propose the proposal we made in Medium again as Prop 17 before the system update is completed and the assets are confiscated.
If Prop17 is also rejected and the community confiscates the assets, we will obtain Juno addresses from our clients and submit a new Prop. The content of this proposal is to distribute $JUNO directly to those who are the original owners of $JUNO even though it is stored in the Community Pool once.
Even if the Juno community decides that our Juno is unjustifiable and Prop16 is passed, our clients are pure fans of the Cosmos ecosystem. Of course, it’s the same for Juno. On behalf of our investors, and supporters of the Cosmos Ecosystem, we believe that allocating a fair share of Juno to them is the right thing to do.
We all feel a great deal of responsibility for making this announcement about the return at a time when their Juno is on trial.
We would have liked to give our clients the best surprise after everything is done well and launched GAME. We apologize to our clients for not being able to do that according to our original schedule. But we hope with more understanding the Juno community will support our efforts to expand the Cosmos Ecosystem.
We have expressed the whale’s thoughts and background on what has been discussed in the community so far. We believe a favorable outcome can be achieved for both our investors and the Juno Community without the downside of damaging the Juno Network’s reputation. Upholding the ethics of the blockchain maximizes value for all of us.
We believe that we need to stay flexible for the discussions and find a point at which we and the community’s consensus can be balanced.
We want everyone to put in the effort to find a mutually agreeable solution. We have not unbonded any funds and we believe there is time to considering all possible options. Let’s not rush to pick Yes or No because it is very difficult to undo these actions.
We have no intent of doing anything unethical like unbonding and dumping until this issue is resolved.
We also understand that the agreement we reach at first may need additional adjustments as time goes on. We would ask that the community continues to communicate with us. We can find a lot more flexibility before heading into Governance Proposals, so please lend some flexibility ahead of time so we can find harmony.
We hope the Juno community can understand our sincerity and work with us to find a solution that is beneficial for all.