TELIP: The TEL Token Upgrade

Council Proposals TELIP
1

Activating TEL as the Native Token of Telcoin Network

Abstract

This TELIP proposes the development, third-party security assessment, and deployment of the native TEL token contract and its supporting upgrade contracts across Ethereum, Polygon, Base, and Telcoin Network, in coordination with Telcoin Network mainnet launch.

In exchange for approving this upgrade, the ecosystem receives the following:

  1. A standards-compliant, 18-decimal TEL token that every exchange, decentralized exchange, lending market, aggregator, bridge, and institutional custodian in the EVM ecosystem can list and integrate by default, with no bespoke engineering.

  2. TEL activated as the native gas token of Telcoin Network at genesis, creating recurring, structural, on-chain demand for TEL for the first time.

  3. A single, unified contract address across all supported chains, with mint and burn capability and clean cross-chain liquidity, using Telcoin Network as the source of truth for total supply.

  4. A direct community voice in the upgrade, through ratification of the downstream constitutional amendment that records the upgraded TEL as the canonical TEL going forward.

The upgrade preserves every holder’s position one for one. Balances do not change. The TEL ticker does not change. No token is removed from any wallet. Holders upgrade directly on the chain where they already hold TEL, in a single click, with no requirement to bridge first.

This TELIP is the primary proposal and is decided first, through the standard TELIP process: Platform Council approval, then Treasury Council approval, then the Compliance Council veto window. Its approval is what authorizes the upgrade. Two downstream instruments follow. A TGIP, voted by the full Miner Assembly, amends the Telcoin Association Constitution to record the upgraded TEL contract in the preamble.

Motivation

For eight years, TEL has paid a tax that almost no other token pays. Every exchange that wanted to list it, every protocol that wanted to integrate it, and every custodian that wanted to hold it has had to build something custom to do so, because TEL does not behave the way the EVM ecosystem expects a token to behave. The cost of that friction is not theoretical. It is the listings that never happened, the lending markets TEL was never added to, the liquidity pools that required special handling, and the institutional integrations that quietly declined rather than take on the engineering. TEL has been structurally excluded, by default, from the integration surface that the rest of the market has used to grow for years.

The cause is a single architectural detail. The current TEL token uses 2 decimals. The EVM ecosystem standardized long ago on 18, and it has standardized with increasing rigidity. A token’s decimal count is one of the first three attributes any exchange or protocol checks when assessing an asset, alongside its address and its supply. A 2-decimal token signals non-standard behavior immediately, and non-standard behavior is friction, cost, and risk that most counterparties simply route around.

This is the moment to remove that constraint, permanently, because the network TEL was built for is now here.

Telcoin Network is launching, and TEL is its native gas token. A blockchain’s native token must express value in fractions finer than 0.01, and it must bridge cleanly without destroying value on the way out. A 2-decimal token can do neither. Launching the network on a legacy token architecture would embed that limitation into the foundation of the chain and into every downstream system, and would make any future correction far more disruptive than doing it now.

This upgrade marks TEL taking its native form: the standards-compliant, finely-divisible, cleanly-bridgeable token that powers its own Layer 1 and that the entire market can finally integrate without exception. The constraint that has capped TEL for eight years comes off at the exact moment the network switches on. That alignment is the opportunity this proposal asks the Councils to seize.

What the Upgrade Unlocks

The case for this upgrade is not relief from a problem. It is the expansion of everything TEL can do, where it can trade, and who can hold it. Each item below is a capability TEL gains, tied directly to network usage and value accrual.

The full EVM integration surface, by default. An 18-decimal TEL is a token every exchange listing pipeline, every decentralized exchange pool template, every lending market, every yield aggregator, every cross-chain bridge, and every institutional custody platform can support out of the box. The integration work that was a custom engineering project for each counterparty becomes a standard onboarding. The set of venues where TEL can live, trade, and be used expands from a constrained subset to the entire ecosystem.

TEL live as native gas on Telcoin Network. At genesis, TEL becomes the fuel of its own blockchain. Every transaction on Telcoin Network requires TEL for gas. As mobile network operators validate the chain and build applications that drive subscriber activity, that activity converts directly into demand for TEL. For the first time in TEL’s history, the token has structural, recurring, on-chain demand tied to real usage rather than to speculation alone.

Clean cross-chain liquidity and a single source of truth. A unified contract address across Ethereum, Polygon, Base, and Telcoin Network, deployed deterministically, means partners identify TEL by the same address everywhere. Mint and burn capability replaces the lock-and-release model that constrains liquidity today, so TEL can move between chains without the bottlenecks and dust losses that legacy bridging imposes. Telcoin Network serves as the canonical source of truth for total supply across all chains. The result is dramatically simpler integration and far easier market-making.

A functioning on-chain TEL economy. Validator staking, TELx liquidity mining, TAN application-developer fees, and Treasury harvesting all assume a standards-compliant, finely-divisible token. The upgrade is the precondition for the full Miner economy to operate at scale. It is what allows the four Miner Groups to produce, earn, and govern on the infrastructure the network was designed around.

Taken together, these are not incremental fixes. They remove the single largest structural suppressor of TEL’s market access and replace it with the native foundation for a global, institutionally adoptable token standard for the telecommunications industry.

Why the Current Architecture Caps TEL

The following details what the upgrade removes. Each is a real constraint on TEL today, and each maps directly to a capability gained above.

Non-standard decimals exclude TEL from the integration surface. TEL’s 2-decimal configuration deviates from the 18-decimal standard that virtually every tool, protocol, and exchange in the EVM ecosystem relies on. In practice, every integration with a 2-decimal token requires custom handling. Exchanges must build bespoke deposit and withdrawal pipelines. Decentralized exchanges cannot use standard pool templates. Lending markets, yield aggregators, launchpads, bridges, and custody platforms that assume 18-decimal conformance must either special-case TEL or decline to support it. For a meaningful number of counterparties, the answer has been to decline. The cumulative cost, measured in foregone listings, integrations, and liquidity over eight years, is difficult to overstate, and it is fundamentally incompatible with the adoption trajectory TEL requires.

Non-standard decimal handling is also a security liability. Custom scaling logic is a recurring source of catastrophic precision-loss vulnerabilities across DeFi. The November 2025 Balancer exploit, which drained roughly 128 million dollars across six chains, originated in a precision-loss and rounding inconsistency in the scaled-balance invariant math of its stable pools, exploited by driving balances into very small unit ranges across many swaps in a single transaction. The broader lesson is direct: wherever a token forces custom decimal and scaling logic, it widens the attack surface. A standards-compliant token removes an entire class of this risk.

Inconsistent addresses across chains. TEL’s contract addresses differ across chains today, which complicates integration for exchanges, mobile network operators, and data services. A unified address across all supported chains simplifies onboarding at scale.

No mint and burn, which constrains bridging. The current contract lacks mint and burn capability, which limits bridges to lock-and-release. That model creates liquidity bottlenecks that can prevent tokens from moving cleanly between chains. Mint and burn capability enables robust cross-chain supply management and gives the Association the ability to add, replace, or revoke bridge partners over time without further token changes.

Unviable as gas on Telcoin Network. Gas pricing requires denomination in fractions far smaller than 0.01 TEL. With only 2 decimals, the minimum unit is too coarse. As TEL appreciates and network demand rises, fees would become prohibitively expensive relative to competing networks, and TEL could not function as a unit of account on its own chain without value leakage.

Value destruction on outbound bridging. Converting TEL from 2 decimals to 18 when bridging onto Telcoin Network is straightforward. The reverse is not. When a user bridges TEL from Telcoin Network to a chain where TEL has only 2 decimals, any value beyond the second decimal place is truncated and permanently lost as dust. At small sizes this looks negligible, but it compounds across millions of transactions and grows as TEL appreciates. A token that silently destroys value on every outbound bridge transaction cannot serve as a credible medium of exchange.

A clean upgrade to a properly configured 18-decimal token is the only solution that fully, permanently, and verifiably resolves all of the above. Since assuming stewardship of the project, the team has evaluated every reasonable alternative, including wrapper contracts, proxy upgrade patterns, and decimal-adapting middleware. None eliminates the underlying incompatibility. Each only adds layers of abstraction that enlarge the attack surface and reduce confidence in security assessments. For a token destined to sit at the center of a global, institutionally adopted network, residual ambiguity in how decimal handling behaves under adversarial conditions is a systemic risk no responsible engineering team should accept. TEL has been upgraded cleanly once before, when the contract was last updated in January 2020. The team knows how to execute this, and the discipline applied to evaluating the alternatives is the same discipline that will govern the upgrade itself.

Specification and Technical Strategy

Deployment Plan

  1. Telcoin Network. A LayerZero native adapter locks and releases native TEL. Genesis includes the total off-chain supply. As holders upgrade and bridge to Telcoin Network, these tokens unlock and serve as native gas. To bridge off Telcoin Network, users lock native TEL, which is then minted on the destination chain.

  2. Ethereum, Polygon, and Base. The upgraded TEL contract is deployed using CREATE3 for deterministic, identical addressing across chains. Each deployment integrates a mint and burn adapter to support bridging to and from Telcoin Network.

  3. Upgrade contracts. Dedicated upgrade contracts are deployed on Ethereum, Polygon, and Base. Each accepts legacy TEL and mints upgraded TEL to the holder in the same transaction, ensuring liquidity is always available for the upgrade. After the primary upgrade window closes, the contract stops accepting deposits and stops minting. Legacy TEL remains locked in the contract until all upgrade windows close, enforced at the contract level by a timestamp that any holder can verify by reading the contract directly.

  4. Legacy token deprecation. To help holders distinguish the two, the legacy TEL logo is updated to gray. The upgraded TEL retains the familiar blue logo as the canonical TEL going forward.

  5. Recovery of abandoned legacy tokens. Following the primary window, the schedule in the Upgrade Window and Governance section governs the recovery of permanently abandoned legacy tokens to the community-governed TEL Treasury, administered by the Compliance Council. The upgrade contracts permit withdrawal of legacy TEL only after all windows close, again enforced by an on-chain timestamp.

  6. Integrate with LayerZero DVNs. The final step is to register the new TEL with LayerZero DVNs using best practices, diverse clients, and multi-signature threshold. LayerZero is the initial bridge partner that supports flat-fee bridging between chains. The bridge authority is fully customizable and can be revoked any time by a multisig safe controlled by TAO.

  7. TAN and TELx Updates. The councils will update relevant contracts once the upgraded TEL becomes available.

Upgrade Mechanics

  • Holders call the upgrade function on the official contract for their chain. The Telcoin Association provides an official upgrade page. Holders connect their wallet, approve the transfer, and complete the upgrade with a single click. The operation is one-way. Upgraded TEL cannot be reverted to legacy TEL.

  • The contract locks the holder’s legacy TEL and mints an equivalent amount of upgraded TEL to the holder in the same transaction. One human-readable legacy TEL equals one human-readable upgraded TEL.

  • After the primary window, the official page draws from a one-way reserve for holders upgrading late. The holder experience is identical across all windows.

  • The only recommended upgrade method is the official Telcoin Association page. Holders should verify official contract addresses independently and should never trust unofficial upgrade links.

Bridge Partner Flexibility

Because the upgraded TEL uses a mint and burn model on EVM chains, the Telcoin Association retains the ability to revoke mint authority from any bridge provider and to onboard new or additional bridge partners. This eliminates long-term vendor lock-in and strengthens the security posture of cross-chain operations.

Upgrade Window and Governance

The upgrade gives every holder a full, generous, and heavily communicated window to upgrade one for one, and it provides a long tail of additional opportunity for anyone who cannot act in time. It does not take tokens from holders. What it does, after a long period, is return permanently abandoned and provably lost tokens to the productive, community-governed TEL Treasury, rather than leaving that value stranded and unusable forever.

This framing is deliberate and it is accurate. A large share of unclaimed legacy TEL will be permanently lost or abandoned: sent to burn addresses, trapped in dead contracts, or stranded as dust in expired liquidity pools. Leaving that value permanently unrecoverable serves no member of the ecosystem. Recovering it, slowly and transparently, returns it to the Treasury that the four Miner Groups govern, for allocation through the TELIP process to ecosystem purposes such as network growth, liquidity, security, and incentives. Recovered TEL does not accrue to any company. It returns to the community.

Phase 0: Governance Sequence

This TELIP is the primary proposal. It is decided first, through Platform Council approval, then Treasury Council approval, then the Compliance Council veto window. Approval of this TELIP is what authorizes the upgrade.

Two downstream instruments follow upon that approval. First, a TGIP, voted by the full Miner Assembly, amends the Telcoin Association Constitution to record the upgraded TEL contract address in the preamble. This is a constitutional amendment to keep the founding document accurate, and it gives the entire community of TEL holders a direct voice in affirming the canonical token, in the same manner the community ratified TGIP1. Second, a CCIP authorizes the Compliance Council to define and finance the party responsible for administering the upgrade window and the recovery of abandoned legacy tokens, and to specify the process by which holders upgrade after the primary window.

Phase 1: Primary Upgrade Window (12 months)

A twelve-month primary window opens upon deployment of the upgrade contracts. During this period, all holders, including individual users, exchanges, liquidity providers, and institutional partners, upgrade one for one. Communications begin well in advance and run continuously across official channels, exchanges, wallets, community channels, and ecosystem partners. The objective is maximum participation during this window.

This initial window is short to encourage all users to upgrade to new TEL. The upgraded TEL is the only supported TEL token on Telcoin Network. It also reduces the strain for exchanges, infrastructure partners, and Telcoin Association from maintaining two competing digital assets.

Phase 2: Extended Windows and Recovery (months 12 and 24)

After the primary window, additional upgrade opportunities remain open for a further 12 months, for a total of 24 months. Holders upgrading late use the same official page and the same one-for-one experience, drawing from a reserve. At each six-month checkpoint, a share of the reserve that has not been claimed is recovered to the community Treasury, on the following declining-retention schedule:
Checkpoint
Share of remaining reserve that stays claimable
Recovered to Treasury this period
Month 12
50%
50%
Month 24
0%
100%

Illustrative example, assuming 100,000 legacy TEL remains unclaimed at the end of the initial 12-month upgrade window and no further claims occur:
Checkpoint
Remaining claimable
Recovered this period
Month 12
50,000
50,000
Month 24
0
50,000

The schedule front-loads protection for genuine holders, who retain the great majority of the reserve through the early checkpoints when real holders are most likely to act, and reserves full recovery only at the far end of a 24-month horizon. Long multi-window upgrade periods are standard practice. Polygon’s MATIC to POL upgrade, for example, ran over a multi-year window and achieved a conversion rate of roughly 99 percent.

Phase 3: Completion

After 24 months, upgrade support ends and legacy TEL is no longer supported. The Compliance Council, through the CCIP established in Phase 0 and administered by the TAO or another designated operator, oversees the close-out. At that point, legacy TEL may be withdrawn from the upgrade contracts and sold to recover abandoned liquidity from obsolete pools, with proceeds returning to the community Treasury.

Risks and Mitigations

A token upgrade of this scope carries real, ecosystem-wide impact. Each material risk below is paired with its mitigation.

Ecosystem-wide coordination. Every participant must act, including centralized exchanges, decentralized exchanges that will redeploy liquidity pools, wallet providers, and data services such as CoinMarketCap and CoinGecko. Mitigation: a dedicated coordination effort with early, direct outreach to every affected exchange, market maker, and infrastructure provider, ample lead time, a defined exchange contingency path, and supported TELx pools for liquidity providers to upgrade into.

Security. New token and upgrade contracts must meet the highest standard. Mitigation: rigorous third-party security assessments of all new contracts before deployment, with findings addressed and re-assessed as needed, funded as a defined line item in this proposal.

Market confusion during transition. Legacy TEL and upgraded TEL may trade separately for a period. Mitigation: clear deprecation of legacy TEL, the gray-versus-blue logo distinction, consistent identification of the upgraded token as the canonical TEL, and continuous communication. Some transitional confusion is possible, and the communications plan is built to minimize it.

Exchange non-cooperation. An exchange may be slow to support the upgrade. Mitigation: a published contingency path. Depending on the exchange, holders may withdraw legacy TEL to a self-custody wallet and upgrade directly through the official page.

Phishing. Upgrade events attract impersonation and fraudulent sites. Mitigation: official contract addresses published through multiple channels, prominent anti-phishing guidance, and clear instruction that holders verify addresses before approving any transaction and never trust unofficial links.

Adoption friction. Despite a chain-native, one-click upgrade, some holders will not act in the primary window. Mitigation: the 24-month extended window and the front-loaded recovery schedule are designed to protect genuine holders while still reaching ecosystem finality.

Rationale

Strategic Alignment with Association Mission

The Telcoin Association’s mission is to align GSMA mobile network operators and a global user base around common blockchain infrastructure, with TEL and Telcoin Network as the blockchain and token standard for the telecommunications industry. A token standard cannot be a token the industry’s exchanges, custodians, and protocols cannot integrate by default. This upgrade is the precondition for TEL to function as that standard. It is also the precondition for the network’s economic model, since validator staking, liquidity mining, application-developer fees, and Treasury harvesting all depend on a standards-compliant, finely-divisible native token. The upgrade does not sit beside the mission. It is required to achieve it.

Proportional Equivalence Between Costs and Benefits

The cost of this upgrade is a defined, one-time engineering and security investment plus a coordinated communications effort. The benefit is the permanent removal of the single largest structural constraint on TEL’s market access, at the exact moment the network goes live. The integration surface expands from a constrained subset of the market to the entire EVM ecosystem. TEL gains structural on-chain demand as native gas. Cross-chain liquidity becomes clean and unified. Set against the eight years of foregone listings, integrations, and liquidity that the 2-decimal architecture has cost, and against the systemic risk of launching a global network on a legacy token, the investment is small and the return is asymmetric.

Risk and Reward Profile

  • Holders are protected. Every position upgrades one for one. Balances do not change. The ticker does not change. No token is removed from any wallet. The upgrade is chain-native and one-click, with a twelve-month primary window and a 24-month total horizon.

  • The upside is unlocked. TEL gains the full EVM integration surface, native gas demand on its own Layer 1, and clean cross-chain liquidity, all of which compound with network adoption.

  • Principal is preserved, and recovered value returns to the community. The upgrade does not dilute holders or alter the economic supply. Recovered abandoned TEL returns to the community-governed Treasury, never to any company, and is allocated transparently through the TELIP process.

Feasibility

The upgrade requires no unproven technology. CREATE3 deterministic deployment, mint and burn adapters, and LayerZero native bridging are established patterns. The team has evaluated and ruled out every non-upgrade alternative on security grounds. TEL has been upgraded cleanly once before. Execution is coordinated with mainnet readiness, exchange readiness, bridge readiness, and communications readiness, and the timeline is generous and telegraphed well in advance. If mainnet timing shifts, the Councils reassess the upgrade timeline accordingly, since the two are deliberately coordinated.

High-Level Phases

Development
Develop the upgraded TEL token contracts and the upgrade contracts for Ethereum, Polygon, and Base.

Security Assessment
Engage third-party security researchers to review all new contracts. Address findings and re-assess as needed.

Deployment
Deploy the upgraded TEL and the upgrade contracts across all target chains. Include upgraded TEL in Telcoin Network genesis configuration.

Ecosystem Coordination
Notify and support exchanges, wallet providers, data services, and community members ahead of and throughout the upgrade.

Primary Window Opens
Begin the twelve-month primary upgrade window. Monitor participation and provide ongoing support.

Extended Windows and Recovery
Maintain extended upgrade opportunity through month 24, with the front-loaded recovery schedule returning abandoned legacy TEL to the community Treasury.

Completion
After 24 months, conclude upgrade support. Recover abandoned liquidity from obsolete legacy pools, with proceeds to the community Treasury.

Conclusion

TEL was built for a network that did not exist yet. That network is now here, and this upgrade is TEL taking its native form: the standards-compliant, finely-divisible, cleanly-bridgeable token that powers its own Layer 1 and that the entire market can finally integrate without exception. The constraint that has quietly capped TEL for eight years comes off at the precise moment the network switches on, and the two events reinforce each other into a single, positive catalyst.

This is not a discretionary change, and it is not a defensive one. It is the foundation for everything the token standard is meant to do: to let GSMA operators validate and build, to let the four Miner Groups produce, earn, and govern, and to connect every mobile user to digital money through infrastructure the world’s exchanges, custodians, and protocols can adopt by default. Approving this upgrade does not just fix a contract. It activates TEL as the native token of the telecommunications blockchain and opens the door to the on-chain TEL economy the network was designed to host.

We respectfully request the Councils’ review and approval to proceed.

TEL The World,

Grant Kee

This document is the TELIP, submitted for decision first by the Telcoin Association Platform Council and Treasury Council, followed by a TGIP for the constitutional amendment.

11 Likes
2

Lots of information to digest here. Upon first glance most of my concerns, if any, were alleviated by the detailed rationale. Quite honestly this answers some of the age old questions around listings and general adoption by the broader crypto communities. I’m fully supportive of this upgrade.

9 Likes
3

Huge step at the finish line for mainnet!!

9 Likes
4

Grant,

I really like the direction this proposal is taking. It feels less like a token change and more like laying the foundation for the next phase of the Telcoin ecosystem.

Telcoin evolved from a remittance app into a full digital asset bank and teleco focused blockchain, it makes sense that the underlying token architecture evolves with it. Building for scalability, cleaner integrations, and future network functionality now is far better than trying to retrofit those capabilities later on my opinion.

I also appreciate that the focus appears to be on strengthening the infrastructure rather than changing the fundamentals of TEL itself. To me, this is the kind of forward looking thats necessary if supporting millions of users, telecom partners, and real world financial activity on the network is key.

Excited to see the discussion continue and looking forward to what this enables over the coming years. :fire::fire:

9 Likes
5

First, I want to say up front that I support the core of this proposal. Moving TEL to 18 decimals is the right call for a token that is about to be native gas on its own chain. The gas argument is just arithmetic: with 2 decimals the smallest unit is 0.01 TEL, which is far too coarse to meter fees on an L1, and the outbound bridging point is equally valid, since converting 18 decimals back down to 2 truncates everything past the second place as unrecoverable dust. If we believe in the network strategy at all, an 18-decimal, cleanly bridgeable TEL is the correct foundation. I am not arguing against that.

What I want to raise are the places where the proposal argues more than it needs to, and the one section that I think deserves to be separated out and voted on its own. I am raising these in good faith, as a holder who wants this done right.

On the framing around exchange access. The proposal describes TEL as structurally excluded from listings because of its decimals, but TEL is already listed on Kraken, Uphold, KuCoin and others, with the Kraken listing happening only this past January. The decimal count is a standard, readable field, and competent integrators read it. The friction in AMM math and fixed-point libraries is real, and I do not dispute that 18 decimals is cleaner, but “structurally excluded by default” overstates it, and the listing history is the evidence.

On the Balancer comparison. I looked into the November 2025 Balancer exploit that the proposal cites. That roughly 128 million dollar loss came from a rounding flaw in Balancer’s own internal scaling logic, and the affected pools held 18-decimal assets like wstETH, osETH and rETH. It had nothing to do with a low-decimal token. The general lesson that custom scaling logic is risky is fair, but using that specific incident as evidence that 2-decimal TEL is a security liability does not hold up, and including it weakens an argument that is otherwise strong on its own.

On the Polygon precedent. The proposal cites Polygon’s roughly 99 percent conversion to justify its long upgrade window, but the comparison cuts the other way once you look at how that number was actually reached. The MATIC to POL migration was 1:1 between two 18-decimal tokens, so it carried none of the decimal-conversion complexity this upgrade does. More to the point, it was largely automatic: major exchanges converted user balances directly, holders on Polygon PoS were upgraded without taking any action, the migration began in September 2024, and it reached about 99 percent by September 2025. The Ethereum-side migration portal is still open and still offers the same 1:1 swap today, with no published deadline. So Polygon reached near-total conversion through automatic conversion and an open, ongoing window, not through any step that reclaims unconverted tokens to a treasury. If Polygon is the precedent, what it actually supports is a generous and ideally open-ended timeline, and it shows that a confiscation mechanism is not what drives a high conversion rate. The recovery mechanism in this proposal is an addition the cited precedent does not contain, so the proposal should not lean on Polygon to justify it.

That recovery mechanism is my main concern. The document frames it as recovering “permanently abandoned and provably lost” tokens, but the mechanism does not prove abandonment. It recovers whatever is unclaimed by a deadline, which means it also captures lost keys, long-term cold storage holders who are not following governance, estates in probate, and people who are simply not paying attention, right next to genuinely dead tokens in burn addresses. There is a real conflict of interest here as well, since the parties who benefit from the sweep are the same ones voting to authorize it. That alone is reason to hold this to a higher bar than a technical upgrade.

The schedule is also internally inconsistent, and this is the single most holder-relevant parameter in the entire proposal. The body says the extended period runs a further 24 months for a total of 30 months, which does not add up, since 12 plus 24 is 36. The table and the worked example only go to month 24 and imply a 24-month total. The High-Level Phases section says “after 24 months, conclude.” So the document gives three different numbers. Before this goes to a vote, it has to be one number. And whatever that number is, the “30-month window” language hides the fact that recovery actually begins at month 12, when half of whatever is unclaimed is taken immediately. A holder does not have a generous multi-year runway. They have 12 months before they start losing half.

There is also a legal question I do not think the proposal addresses. The Treasury recovery would be carried out by the Telcoin Association, not the bank, but Telcoin now operates regulated entities on multiple fronts, and programmatically reclaiming users’ unclaimed property to a treasury raises unclaimed-property and escheatment questions that I’d want a legal opinion on.

On security and execution. The proposal cites the clean 2020 contract update but does not mention the December 2023 incident, which I think is the more relevant data point. That exploit, around 1.2 million dollars, came from a proxy implementation on Polygon, and the key detail is that the vulnerable contracts were outside the scope of the audit at the time. CertiK confirmed the exploited contract was not in its audit scope. That history is exactly why “rigorous third-party security assessments” as an unspecified line item is not enough on its own. The new system has mint authority and bridge adapters across four chains, which is a larger surface than a single wallet proxy, so I want to know which firms, how many, and whether the scope covers the entire composed system, not just the token contract.

A few more things the proposal treats as pure upside that I read as new risk. Moving to a mint and burn model with Telcoin Network as the canonical supply source concentrates trust in the bridge and in whoever holds mint authority, and bridges have been one of the largest recurring sources of catastrophic losses in this space. During the transition, legacy and upgraded TEL will trade as two assets, and a gray versus blue logo does not stop price divergence or confusion, which matters a lot for a token with a large, less technical remittance holder base. And the urgency framing depends on mainnet being live, but the launch timeline has already slipped past the Q1 2026 that the community expected. If mainnet moves again, the catalyst narrative moves with it.

So here is what I am actually asking for.

Separate the votes. Approve the decimal and standards upgrade on its technical merits, which I would support today, and let the abandoned-token recovery mechanism stand on its own as a distinct vote with a fixed and consistent timeline, a real legal opinion, and ideally a much longer or open-ended claim window in the Polygon style rather than a trigger that starts at month 12.

And before any vote, I think it would be best to have clear answers to the below questions:

  1. How is total supply provably conserved across Ethereum, Polygon, Base and Telcoin Network during the multi-year period when two tokens coexist alongside the genesis allocation and mint and burn?
  2. Which audit firms, how many, and does the scope cover the full system including the upgrade contracts, the mint and burn adapters, the genesis configuration and the LayerZero DVN setup, given that 2023 was a scope gap?
  3. What is the mint-authority trust model: who holds keys, what is the multisig threshold, and what is the blast radius if a bridge or signer set is compromised?
  4. Which is it, 24, 30 or 36 months, and does meaningful recovery really begin at month 12?
  5. How does treasury recovery of unclaimed tokens square with unclaimed-property law?
  6. Have the major exchanges actually committed to supporting the swap, since Polygon’s high conversion rate depended heavily on exchanges auto-converting balances?
  7. What happens concretely to existing TELx and DEX liquidity, and who bears the redeployment cost?

To be clear, none of this is opposition to the upgrade itself. The core is sound and probably necessary. I just think a change this large, with a confiscation mechanism baked in, deserves to be approved on its strongest version, with the contested part debated on its own and the unknowns answered first.

7 Likes
6

This is a major advancement and I’m in general support of this transition if this helps the Telcoin Association and community move forward to meet the potential and functionality of the Telcoin network.

A few questions:

  1. What is the estimated overall cost of this transition as well as the overall cost for each high level phase listed above? Can this be covered by budget already allocated for this year or does additional budget need to be provided from somewhere to cover this?

  2. I think before anything moves forward, the Telcoin community has also asked for quarterly (or some sort of recurring) public release on the finances and financial health of Telcoin DAB, Telcoin org & TAO (as well as any additional funding that has occurred to support Telcoin). Additionally, if my understanding is correct, more Telcoin have been locked as collateral. Before a transition of this size and scope is approved, I believe it’s necessary to have a financial snapshot of the Telcoin and any related entities so we can understand the effect this transition (or failure to do the transition) will have. Cash on hand, cash burn, asset and liability disclosures, etc. Why: To provide holders, investors, MNO partners and others that this 3+ year initiative won’t make the entire project financially unstable or insolvent especially as market forces/factors are unpredictable.

  3. Are MNOs allowed to go live on Mainnet with legacy TEL until the extended window closes? When do MNOs on Mainnet transition over to upgraded TEL? Are they aware of this proposal? Do they have any say in any part of the transition?

  4. What are the tax implications for a holder once they submit and activate an upgrade? Does a staker also need to unstake, convert and then restake which opens up multiple taxable events? For non-stakers but US holders who have held for more than a year, would this conversion remove any long term capital gains benefits that holder would have if they convert and then sell a portion or all of their TEL with a year of the conversion?

  5. I appreciate the explanation for security features and notifications on and about official channels for support during this transition but in my personal experience, the support framework is ripe for malicious actors. Any time I’ve requested guidance or assistance on Twitter & Discord, there are multiple inbound inquiries received claiming to be Telcoin support and asking me for my info/wallet or to connect to them. I am jaded enough to reject those requests but for a transition of this size, so many people may not be as discerning. In the official Telcoin Discord alone, there are so many malicioua actors who attempt to trick users into wallet access, there needs to be a full review/overhaul of how fast Telcoin support can act to provide guidance and official support before malicious actors can act.

  6. I second all of Evan’s inquiries and questions as well especially regarding clarifying inconsistent timelines, confirming a review of legal implications for unclaimed property, disclosing plans for exchange support/approval for the transition to help fortify the likelihood of success.

  7. What mechanisms can be put in place to prevent huge changes in value between legacy Telcoin & the new Telcoin as the migration takes place over what looks close to be 3 years?

Looking forward to continuing this discussion.

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The only question I have is how this will work for tokens in LPs. If I have to pull them out, I could be looking at tax implications.

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Great points. I support upgrading the token. I don’t support introducing an expiration date on self-custodied property.

Upgrading a token and reclaiming unconverted balances are two separate policy decisions. The first is a technical necessity. The second is a governance choice that deserves independent debate.

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Edit1: correct “30-month” typo to intended “24-month”

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Thanks for your feedback @EvanBryan7

To answer your questions:

1. How is total supply provably conserved across Ethereum, Polygon, Base and Telcoin Network during the multi-year period when two tokens coexist alongside the genesis allocation and mint and burn?

Conservation is verified on-chain through three independent checks.

  1. Summing totalSupply() across Ethereum, Polygon, Base at any point gives the total amount of upgraded TEL claimed to date.

  1. The upgrade contracts on each chain separately track locked legacy TEL against minted upgraded TEL, providing a second verification path.

  2. Once Telcoin Network is live, the locked balance in the NativeBridge contract can be checked against the sum of totalSupply() on all satellite chains, and the two should always reconcile. The combined totalSupply() across all chains will remain below the fixed total supply of 100B TEL until every legacy token has been claimed.

2. Which audit firms, how many, and does the scope cover the full system including the upgrade contracts, the mint and burn adapters, the genesis configuration and the LayerZero DVN setup, given that 2023 was a scope gap?

  • Spearbit x2
  • Private assessments x2
  • AI scans

The scope covers the full system. I wasn’t part of the 2023 scope gap.

3. What is the mint-authority trust model: who holds keys, what is the multisig threshold, and what is the blast radius if a bridge or signer set is compromised?

Multisig requiring 7-of-9 signatures for admin operations. Signers are experienced participants in crypto security with a clean operational track record. Individual identities are not disclosed publicly, consistent with standard practice for high-value multisig custody. On blast radius: the bridge contracts hold mint/burn authority directly, and the signer set holds the authority to assign or revoke that authority. A compromise of the signer set would therefore represent a system-wide risk which is why the threshold, signer vetting, and the security program above are central to this proposal’s design rather than an afterthought.

4. Which is it, 24, 30 or 36 months, and does meaningful recovery really begin at month 12?

The proposed design is a 24-month total window: the front-loaded recovery schedule begins at the month-12 checkpoint (50% of the unclaimed reserve recovered to Treasury) and concludes at month 24 (full recovery of any remaining unclaimed reserve). I realize that the current draft contained inconsistent figures for the total window length in different sections and corrected the document so the timeline reads consistently as 24 months throughout now.

5. How does treasury recovery of unclaimed tokens square with unclaimed-property law?

I’m not in a position to offer a legal compliance determination in this forum. The Association has received legal advice indicating this design is compliant with relevant unclaimed-property considerations, and that guidance informed the recovery schedule and the Compliance Council’s administrative role. If specific jurisdictional concerns exist, please share them so they can be incorporated into the Council’s ongoing review.

6. Have the major exchanges actually committed to supporting the swap, since Polygon’s high conversion rate depended heavily on exchanges auto-converting balances?

Engagement with major exchanges is underway. The current working basis is that exchanges will support conversion for a fee rather than as a free, automatic balance conversion. As specific agreements are finalized, named commitments will be communicated to the community.

7. What happens concretely to existing TELx and DEX liquidity, and who bears the redeployment cost?

Existing TELx and DEX liquidity will need to migrate to pools using the upgraded TEL token. Telcoin Association will bear the cost of redeploying TELx infrastructure and incentivizing new pools. For third-party DEXs, redeployment will be handled case-by-case in direct coordination with each platform since liquidity ownership and migration processes vary by venue. We would provide community updates as those arrangements are finalized.

edit1: add quote sections for readability

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Thanks for your feedback @Thadcollins17

To answer your questions:

  1. What is the estimated overall cost of this transition as well as the overall cost for each high level phase listed above? Can this be covered by budget already allocated for this year or does additional budget need to be provided from somewhere to cover this?

I don’t have a finalized, phase-by-phase cost breakdown to share at this stage. What I can say is that additional budget beyond what is currently allocated for this year will likely be required to cover development, the security assessments, and the ecosystem coordination effort. As cost estimates are finalized, we’ll bring a funding proposal to the relevant Council for review alongside this TELIP.

  1. I think before anything moves forward, the Telcoin community has also asked for quarterly (or some sort of recurring) public release on the finances and financial health of Telcoin DAB, Telcoin org & TAO (as well as any additional funding that has occurred to support Telcoin). Additionally, if my understanding is correct, more Telcoin have been locked as collateral. Before a transition of this size and scope is approved, I believe it’s necessary to have a financial snapshot of the Telcoin and any related entities so we can understand the effect this transition (or failure to do the transition) will have. Cash on hand, cash burn, asset and liability disclosures, etc. Why: To provide holders, investors, MNO partners and others that this 3+ year initiative won’t make the entire project financially unstable or insolvent especially as market forces/factors are unpredictable.

Acknowledged

  1. Are MNOs allowed to go live on Mainnet with legacy TEL until the extended window closes? When do MNOs on Mainnet transition over to upgraded TEL? Are they aware of this proposal? Do they have any say in any part of the transition?

If this proposal passes, Telcoin Network will only use the upgraded TEL token. Legacy TEL will not be supported on the network itself, regardless of where the extended upgrade window stands elsewhere. The intent is to launch the token upgrade ahead of mainnet launch.

  1. What are the tax implications for a holder once they submit and activate an upgrade? Does a staker also need to unstake, convert and then restake which opens up multiple taxable events? For non-stakers but US holders who have held for more than a year, would this conversion remove any long term capital gains benefits that holder would have if they convert and then sell a portion or all of their TEL with a year of the conversion?

Tax treatment varies significantly by jurisdiction, and I’m not in a position to provide tax guidance. TEL holders should consult their own tax advisor about their specific situation, including any capital gains considerations. Mechanically, stakers will need to unstake before upgrading and restake afterward. Liquidity providers will need to withdraw from existing pools and deposit into new pools denominated in upgraded TEL.

  1. I appreciate the explanation for security features and notifications on and about official channels for support during this transition but in my personal experience, the support framework is ripe for malicious actors. Any time I’ve requested guidance or assistance on Twitter & Discord, there are multiple inbound inquiries received claiming to be Telcoin support and asking me for my info/wallet or to connect to them. I am jaded enough to reject those requests but for a transition of this size, so many people may not be as discerning. In the official Telcoin Discord alone, there are so many malicioua actors who attempt to trick users into wallet access, there needs to be a full review/overhaul of how fast Telcoin support can act to provide guidance and official support before malicious actors can act.

Acknowledged

  1. I second all of Evan’s inquiries and questions as well especially regarding clarifying inconsistent timelines, confirming a review of legal implications for unclaimed property, disclosing plans for exchange support/approval for the transition to help fortify the likelihood of success.

The timeline inconsistency, legal-review status, and exchange-support status are addressed in the first round of responses above. Happy to expand on any of those if questions remain after reviewing them.

  1. What mechanisms can be put in place to prevent huge changes in value between legacy Telcoin & the new Telcoin as the migration takes place over what looks close to be 3 years?

I don’t have a specific stabilization mechanism to propose today. The design as drafted relies on the one-for-one upgrade ratio rather than a mechanical peg between the two tokens during the transition. I welcome concrete suggestions from the community here.

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Thank you for the responses, Grant! Looking forward to seeing how things progress.

I definitely would appreciate (in reasonable due time) what information can be provided on the financial status and stability of the Telcoin connected ecosystem as we embark on this 2 year initiative

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Congrats Grant !!! :clap: :clap: :clap: and thanks all for your constructive proposals .

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Thanks for the detailed responses, @grantkee. Several of these move things forward, and I want to acknowledge that directly. Correcting the document so the window reads as a consistent 24 months resolves the inconsistency I flagged. Two Spearbit engagements is a serious signal, not a token gesture. And I appreciate the candor on Q3 in admitting that a signer-set compromise is a system-wide risk rather than downplaying it. That kind of straight answer is what makes the rest of this worth discussing.

The answer that changes the most for me is Q6. You said the working basis is that exchanges will support conversion for a fee rather than as a free, automatic balance conversion. That is a material departure from the Polygon model, because free automatic conversion by exchanges was central to Polygon reaching roughly 99 percent. If conversion here is neither free nor automatic, the realistic conversion rate will be lower, which means more TEL sits unclaimed, and unclaimed TEL is exactly what flows to the Treasury under the recovery schedule. I am not imputing intent, but structurally the friction and the recovery point in the same direction, and holders would be paying a fee to keep tokens they already own. That interaction is the core of my concern, and it strengthens rather than weakens the case for separating the recovery mechanism into its own vote and lengthening or opening its window. A 24-month clock that begins sweeping 50 percent at month 12, paired with paid, non-automatic conversion, is more aggressive in practice than the framing suggests.

On the audits. Spearbit twice is genuinely reassuring, and I want to be clear I am not pointing at anyone personally over 2023. But the entire lesson of that incident is that “full scope” means nothing until the scope itself is on the table, because a gap is invisible right up until it is exploited. So the ask is verifiability, not trust. Publish the full audit reports, publish the exact scope statement that lists every contract reviewed, and confirm whether the two private assessments and their findings, at least in summary, will be released as well. If the community is told the coverage is complete but cannot read the scope for itself, then we are standing in the same spot the project stood in before 2023, no matter how strong the firms or how clean the current team. Public reports and a public scope list are the difference between a promise and a proof.

On the multisig and the mint authority. 7-of-9 is a reasonable threshold and I am not asking for signer identities. But a threshold only controls who can act. It does nothing to control what a compromised set is able to do once it acts, and that is the part that determines whether a bad day is survivable. You confirmed the bridge contracts hold mint authority directly and the signer set can assign or revoke it, so the real question is what the mint function itself is allowed to do at the code level. Three things need to be true and verifiable in the contracts, not merely promised. First, a hard supply cap enforced on-chain, so the combined supply across all chains can never exceed the fixed 100B, full stop. Second, minting that is only possible against a proven lock or burn on the source chain, so every minted token is backed one for one and no supply can be conjured out of nothing. Third, a rate limit or per-period mint ceiling, so that even a full compromise cannot mint an unbounded amount in a single event. This matters more than any other single item in the design. If the mint function is bounded, the worst case is a contained loss the ecosystem can recover from. If it is unbounded, a single compromise is not a loss event, it is an extinction event, because infinite mintable supply takes the token to zero and there is no recovering from that. The threshold protects against a rogue minority. The code caps are what protect against everything else, and they are the only thing standing between a bad day and oblivion. Please confirm which of these caps exist in the contracts and commit to showing them in the published audit scope. A timelock on any change to mint or burn authority, and signer independence from the Treasury that benefits from recovery, would round this out.

On where the unclaimed tokens go, I want to raise the destination itself, which the proposal treats as settled. As drafted, the design removes no supply from existence. The unclaimed portion ends up in the Treasury as upgraded TEL, and Phase 3 even contemplates selling some of it, so what is described as recovering stranded value is mechanically closer to activating dormant supply. Truly lost tokens are already out of circulation and already priced as gone, so moving them to a Treasury that can spend, incentivize, or sell them puts supply back into the market that holders had effectively already lost. “Returns to the community” is doing a lot of work in that framing, because a Treasury governed by the Miner Groups is not the same as every holder. Treasury allocation benefits whoever it is directed to. If the intent is genuinely to benefit holders, a burn does that directly: it permanently reduces effective supply below the 100B cap, benefits every holder proportionally and automatically, removes the conflict of interest entirely since there is no controllable pot for the deciding parties to draw from, and is legally cleaner since no entity takes custody of and profits from users’ abandoned property. The best outcome remains an open-ended window in the Polygon style where nobody is ever deprived, since abandoned tokens are already inert and harmless. But between the two end states that actually close the door, a burn is better for holders than a Treasury sweep in every respect I can identify, and I would want the proposal to justify why it chose the sweep over the burn rather than present the sweep as the only option.

On the legal question. I accept that you cannot issue a compliance determination in a forum, and I am not asking you to. What would help is knowing the scope of the advice the Association received, specifically which jurisdictions it covered, and whether even a summary can be shared. The concrete concern you asked for is this: in many US states, abandoned intangible property escheats to the state as custodian after a dormancy period rather than to a private party, and TEL holders are global, so “compliant with relevant considerations” needs to name the relevant jurisdictions to be reassuring. This is another reason the recovery piece belongs in its own vote with its own record.

On supply conservation, the invariants you describe are the right ones. The follow-up is whether they are enforced in code, meaning mint can only occur against a verified lock or burn, versus merely observable after the fact, and whether reconciliation is monitored continuously with a defined response if the balances ever diverge.

One thing that runs through several of the answers, including the tax reply and the value-divergence reply to another holder: the proposal’s “balances do not change” framing, and its broader message that no holder is harmed, is not quite complete. By your own answers, stakers must unstake, upgrade, and restake, LPs must exit and re-enter pools, in many jurisdictions the upgrade may itself be a disposal that resets holding periods, and there is no mechanism proposed to prevent legacy and upgraded TEL from diverging in price during the transition. The on-chain balance is preserved one for one, but the after-tax and in-market experience for a real holder is not necessarily neutral, and I think the proposal should say that plainly rather than lead with the idea that no holder is harmed.

Last, I want to reinforce the financial-transparency request that Thad raised and that got an “acknowledged.” A multi-year initiative that, by your own answer, will likely need additional budget beyond what is allocated this year should not be approved before there is at least a cost estimate and a basic financial snapshot of the entities that would carry it. “Acknowledged” is not yet a commitment to provide that, and I would ask for one before this goes to a vote.

None of this changes my support for the decimal upgrade itself, which I would vote for today on its technical merits. It is the recovery mechanism, the exchange-conversion terms, and the missing cost and financial picture that I think need to be resolved and, in the recovery case, voted separately.

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