Here is why Polkadots Dot is not security according to the Web3 Foundation

Here is why Polkadots Dot is not security according to the Web3 Foundation

As early as 2017, the SEC published report 21a, better known as DAO report. In it, the agency explained the reasons why the tokens of most Daos, including Polkadot, should be regarded as securities.

In the paper, however, it says that development teams could take steps in order not to act as securities as securities if this should be desired. According to the Web3 Foundation (W3F), DOT does not meet the criteria required to be viewed as security, and calls for a review of the matter by the Sec.

software, no securities

The 14-tweet thread published yesterday is that according to Chief Legal Officer Daniel Schoenberger, Dot should never act as security, but as a layer 1 blockchain, i.e. as software on which other companies can build.

"When we thought about the start of the Polkadot network, there was no intention to issue security. We always considered Dot as vertical and application-independent coordination software."

Nevertheless, the Dot development team admits that the project was apparently mainly intended for financial purposes, and repeated that they have taken steps to correct this view.

1/@dabt@dab Coordinating software. After the announcement of W3F, read that Dot turns into a non-security, the thread below to find out how Dot could turn what polkadot is and what main goals the network has. pic.twitter.com/sanu56gnih

- Web3 Foundation (@web3foundation) 26. January 2023

measures to prevent unwanted economic attention

Since 2019, when the Polkadot-WhitePaper was published, the W3F development team has repeatedly held meetings with the SEC to assess the progress of the project with regard to the cancellation of the status of DOT as possible security.

According to W3F, a real decentralization had to be achieved so that DOT could only be regarded as software, and the organization had taken three important steps.

First of all, the W3F would like to ensure that the entire advertising for Polkadot focuses on technology and not on the token itself. Second, the company has imposed restrictions on the whales and limited the percentage of the entire DOT offer to ensure fair coordination and governance.

If the agency agrees, this would mean that DOT is no longer bound to the same strict standards that apply to cryptocurrencies that are mainly used as value preservatives.

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