Gala Games, a Web3 gaming startup, is set to launch an upgraded GALA token on May 15 through an airdrop to existing token holders. However, major cryptocurrency exchange Coinbase has decided not to support the transition.
On May 15, 2023, @GoGalaGames will deprecate the existing Gala V1 and issue Gala V2 under a new contract address.
— Coinbase Assets
What does this mean for you? Read more in the threadhttps://t.co/RlFz5GuuqZ
(@CoinbaseAssets) May 3, 2023
Coinbase announced its plan to disable trading of the GALA token (Gala V1) on May 12 and will not permit its users to receive the new airdropped token (Gala V2) or facilitate any token swaps post-transition. After the V2 token’s release, Coinbase users can still withdraw their V1 tokens to a self-custodied or hardware wallet, but their options for V1 assets will be limited following the May 15 airdrop.
Gala Games emphasizes necessity for token upgrade
According to Gala Games, the token upgrade is essential for the cryptocurrency. The new token’s smart contract is designed to offer improved burn mechanisms, security enhancements, and future upgradeability.
Jason Brink, Gala Games’ President of Blockchain, shared on Twitter that Gala’s token has evolved over the years, initially existing as an Ethereum ERC-1155 token and then being reissued via the ERC-20 token standard for improved capabilities.
Brink stated that he is uncertain why Coinbase has chosen not to support the new iteration of Gala’s token, speculating that it could be due to the issuance method resembling an “airdrop” of bonus tokens rather than replacement tokens.
Gala’s V2 issuance, Brink argued, is not a traditional airdrop, as the company is not trying to offer additional benefits to its token holders. Instead, it is doing what is necessary to upgrade the contract, which involves moving to a new smart contract and sending identical amounts of tokens to Gala V1 holders via the new Gala V2 contract.
Hoping for a change of heart from Coinbase
Brink remains optimistic that Coinbase will reconsider its decision once Gala Games provides further clarification on its approach. “I hope that once there is a little bit of clarity, they will decide to support the V2 token,” Brink said.
Coinbase’s cautious stance on token issuance comes amidst numerous legal and regulatory challenges, such as increased scrutiny from the U.S. Securities and Exchange Commission (SEC).
The exchange announced this week that it would shut down its “Bitcoin Borrow” lending service, which it claims is unrelated to its ongoing battle with the SEC. Furthermore, Coinbase is currently facing a lawsuit for allegedly violating the Illinois Biometric Information Privacy Act due to its user data collection practices.
