Last Updated: June 2024
Blockchain Protocols are basic sets
of rules that govern the way a blockchain is managed & secured. These
protocols may change due to various reasons, such as a change to a particular
rule as an improvement, or a disagreement between blockchain community members,
termed as a fork, or a 51% attack. Such changes can pose a risk for clients and
exchanges.
The purpose of this Fork Policy is
to provide guidelines and procedures for handling such protocol changes within M2.
This policy outlines the approach we take to ensure the security, stability,
and fairness of our platform during and after a fork event.
2.1.
SOFT FORKS
A soft fork is a backward-compatible
update to a blockchain protocol. It introduces new rules that are compatible
with the existing rules, and the old nodes can still operate within the updated
network. Soft forks generally aim to enhance or improve certain aspects of the
blockchain without creating a separate branch or cryptocurrency. This means
that participants that still operate on the older blockchain protocol will
still be able to validate and verify the transactions on the upgraded version.
2.2. HARD FORKS
A hard fork occurs when a blockchain
protocol undergoes a substantial update that results in an irreconcilable
divergence from the previous version. This typically leads to the creation of a
new blockchain branch with incompatible rules and often results in the creation
of a new cryptocurrency. In effect, participants taking part in transactions on
the old blockchain must upgrade to the new one in order to
continue validating transactions. However, participants that do not upgrade may
continue to support and validate transactions on the older blockchain protocol
separately.
2.2.1.
PLANNED HARD FORK
A planned hard fork is a
premeditated and scheduled event in which the network's rules are changed to
improve its functionality, security, or scalability. This type of hard fork is
usually agreed upon by the majority of the network's
community, and it is executed with the aim of improving the network's overall
performance. No new virtual assets are created as a result
of this fork.
Examples: Ethereum Constantinople hard
fork, Bitcoin Segwit2x hard fork.
2.2.2. CONTENTIOUS
HARD FORK
A contentious hard fork is a result
of a significant disagreement within the network's community, usually over the
network's direction, rules, or protocol. This type of hard fork can result in
the creation of two or more blockchain networks, each with its own set of rules
and protocols. This type of fork results in the creation of a new forked
asset.
Examples: Bitcoin Cash hard fork, Ethereum
Classic hard fork.
Suspension of deposit &
withdrawal: To avoid any confusion or technical issues, M2 Global
Wealth Ltd will suspend the deposits & withdrawals of the virtual asset
that is experiencing a hard fork.
Suspension of trading: M2
Global Wealth Ltd will suspend the trading of the virtual asset that is
experiencing a Hard fork. The duration of this suspension will be decided by M2
Global Wealth Ltd based on the fork assessment. M2 may clear the order book for
the virtual asset before trading is enabled. M2 will resume the trading service
only when the network is said to be stable. For soft forks, the trading
services will remain unaffected.
Communication to clients:
M2 Global Wealth Ltd will inform its clients about any upcoming forks in
advance, providing clear instructions and recommendations on how to navigate
the fork and its potential impacts. M2 will communicate through email
notifications and publish all fork-related information on its platform’s notifications
page.
M2’s Customer Support team will be
available to address any user inquiries and provide
assistance during the fork event and its aftermath.
3.1.
APPROACH FOR SOFT FORKS
M2’s default policy for SOFT forks
will be to wait for majority of the nodes to upgrade to the new protocol.
Once a majority of nodes have migrated to a new
protocol, M2 will review the impact of the new protocol on the blockchain &
the Virtual Asset’s price. Only after satisfactory review will M2 support the
new protocol.
M2 will ensure the uninterrupted
operation of its platform during the soft fork, making necessary adjustments to
support the updated protocol while maintaining compatibility with the older
version.
3.2. APPROACH FOR PLANNED HARD FORKS
During this type of fork, M2’s
default policy will be to support the new blockchain and discontinue the
old blockchain. All client’s balances will be converted to the new blockchain
and any assets on the old chain will not be accessible by the clients.
M2 will communicate with its clients
well in advance of the upcoming fork. If the client wishes to use the old
blockchain, the client may withdraw their funds to a wallet that supports the
old chain before the fork.
3.3. APPROACH FOR CONTENTIOUS HARD FORKS
In this type of fork, there will be
creation of a new asset and wallets holding the virtual assets on the
blockchain will now possess duplicate & mirrored assets on both
blockchains.
M2’s default approach will be to NOT
list the contentious hard-forked coin on its platform unless the forked coin
meets the criteria required for listing of new VAs on M2’s platform. Therefore,
clients will be requested to withdraw their VAs balances prior to the fork
event, if clients wish to benefit from the new VA prior to the new VA being listed
on M2’s Global Wealth Ltd platform.
If the forked coin meets the listing
criteria, M2 will check the balances of original VA in each client’s account at
the time prior and immediately after the fork and determine the amount of the
forked VA owed to each client and update the client balances accordingly.
An airdrop is a
marketing strategy that involves sending coins or tokens to wallet addresses.
Small amounts of the new virtual currency are
sent to the wallets of active members of the blockchain community for free or
in return for a small service, such as retweeting a post sent by the company
issuing the currency. The ultimate goal of a crypto
airdrop is to promote awareness and circulation of a new coin.
M2 does not have any control over
airdrops that are sent to its client’s wallets. M2 will credit the airdrop to
its clients’ wallets only for those Virtual Assets which have been supported on
M2’s platform.
All incoming airdrops will be screened by M2.