# Proposal for Creating a Token
**URL:** https://discourse.sourcecred.io/t/proposal-for-creating-a-token/1195
**Category:** Governance
**Tags:** cryptoeconomics
**Created:** [July 23, 2021, 3:41pm UTC](https://discourse.sourcecred.io/t/proposal-for-creating-a-token/1195 "2021-07-23T15:41:19Z")
**Posts on this page:** 6
**Page:** 1
### Author:  [@blueridger](https://discourse.sourcecred.io/u/blueridger)
#### Post date: [July 23, 2021, 3:41pm UTC](https://discourse.sourcecred.io/t/proposal-for-creating-a-token/1195/1 "2021-07-23T15:41:19Z")
# Background
[Community sentiment towards creating a token is very high.](https://discord.com/channels/453243919774253079/684687406275887105/867207438684127243) We are also [in need of some urgent action](https://discourse.sourcecred.io/t/proposed-change-to-grain-redemption/1192) to be able to provide short-term and long-term liquidity for grain.
# Proposal
- Launch Grain as a free-floating ERC-20 token ( **on-chain grain** ) with variable supply minting and burning functionality (i.e. no hard cap on supply, allowing us flexibility to mint more grain down the line if needed).
- The token minting will be technically controlled by the existing [SourceCred Multi-Sig](https://roamresearch.com/#/app/SourceCred/page/oNvU2U3Sf), but will be governed by SourceCred Core, or whatever governance body/mechanism SourceCred Core may choose to delegate/defer to.
- Anyone can sell grain from their [sourcecred instance ledger balance ( **instance-grain** )](http://cred.sourcecred.io/#/accounts) in exchange for an equivalent amount of **on-chain grain**.
- For now, our funding will only be used to purchase **instance-grain** as describe in [this proposal](https://discourse.sourcecred.io/t/proposed-change-to-grain-redemption/1192) up to $1USD. Our funding will **not** be used to buyback **on-chain grain** for now.
# Effects and Benefits
- The ability to convert **instance-grain** into **on-chain grain** on request allows folks like DL to lock in their commitment to not eat up our current funding, allowing us to have a clearer picture of what kind of short-term liquidity we can provide.
- The convert-on-request model is also important because we do not have a viable Eth address for contributors, nor a good way to mass collect them.
- The proposed parameters of the token leave all the doors open for changing minting terms and building additional infrastructure, so that we retain the power to choose more deliberately.
- ERC-20 is easier to use and easier to learn about than side-chains such as xDai. Although gas fees are high, L2s will soon address the problems with Eth mainnet, and our ERC-20 token will be compatible with L2 functionality. We will even be able to use 1hive tools like Gardens using L2s, in the future.
- The urgent creation of a token has the possibility of creating additional liquidity, since the creation of some infrastructure like liquidity pools is permissionless. This means on-chain grain might open up more short-term liquidity with no additional effort on our part, even potentially to the point of being more attractive than our up-to-$1 instance-grain liquidity.
# Plan to propose
This will be proposed at the Emergency Core Meeting today if there’s time, or next Tuesday otherwise.
Thanks @s_ben for helping draft this.
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### Author:  [@Jolie\_Ze](https://discourse.sourcecred.io/u/Jolie_Ze)
#### Post date: [July 23, 2021, 5:45pm UTC](https://discourse.sourcecred.io/t/proposal-for-creating-a-token/1195/2 "2021-07-23T17:45:04Z")
> [@blueridger](#):
>
> The convert-on-request model is also important because we do not have a viable Eth address for contributors, nor a good way to mass collect them.
Just as an aside, 1hive has a bot that when you submit your eth address it confirms it without publicly displaying it… sorry if I’m off topic but I am looking into it because I want to replace our current google poll model. Should I stop looking into this because we won’t need it with this new proposal?
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### Author:  [@s\_ben](https://discourse.sourcecred.io/u/s_ben)
#### Post date: [July 23, 2021, 11:04pm UTC](https://discourse.sourcecred.io/t/proposal-for-creating-a-token/1195/3 "2021-07-23T23:04:46Z")
Collecting ETH addresses is something we’re going to need to do anyway eventually. E.g. if we decide to do an airdrop (note: not a current plan). And even if we just continue our current policies, a bot sounds better than a google form. Not required for current proposal I guess, but something that would be good to move forward on anyway.
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### Author:  [@AL0YSI0US](https://discourse.sourcecred.io/u/AL0YSI0US)
#### Post date: [August 24, 2021, 4:54am UTC](https://discourse.sourcecred.io/t/proposal-for-creating-a-token/1195/4 "2021-08-24T04:54:45Z")
> [@s\_ben](#):
>
> Collecting ETH addresses is something we’re going to need to do anyway eventually. E.g. if we decide to do an airdrop (note: not a current plan).
🤔 I was wondering at what stage we would want to do this.
I can throw together a spreadsheet to house wallet details so _we have the thing_ and it’s ready when we need it if that’s desired.
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### Author:  [@s\_ben](https://discourse.sourcecred.io/u/s_ben)
#### Post date: [August 24, 2021, 5:18am UTC](https://discourse.sourcecred.io/t/proposal-for-creating-a-token/1195/5 "2021-08-24T05:18:03Z")
The [form for opting in](https://docs.google.com/forms/d/e/1FAIpQLSc29INkjxXt7b2Y4HwpglWq169cgNxxulz3C8nJz5FGeYxVuw/viewform) (fill out if you haven’t already and want to move your Grain on-chain!) has a neat feature where you can send responses to a google sheet, so we got that covered. If you want you could help with verifying the submissions (just DM me if interested!).
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### Author:  [@AL0YSI0US](https://discourse.sourcecred.io/u/AL0YSI0US)
#### Post date: [September 1, 2021, 9:42pm UTC](https://discourse.sourcecred.io/t/proposal-for-creating-a-token/1195/6 "2021-09-01T21:42:48Z")
Are we ready to talk about a governance Token yet? 😉