One of the biggest debates that revolve around the crypto ecosystem is if a coin is a commodity or a security.
In this thread, I'll explain the difference between securities and commodities and how #AVAX being recognized as a commodity is more important than you might think.
twitter.com/scienceXBT/status/1607797081195925507
On December 13th, the Commodity Futures Trading Commission of the United States determined USDT, BTC, and ETH are commodities.
As the tweet below establishes, this should put down any debate regards if cryptos are securities and commodities for a certain time.
twitter.com/NorthRockLP/status/1602743320995766272?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1602743320995766272%7Ctwgr%5Eeab9d545365a6d537cd4e964c427f00c6af90164%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fcointelegraph.com%2Fnews%2Fcftc-declares-ether-as-a-commodity-again-in-court-filing
Just so we're all on the same page:
Commodities are generally non-tangible assets that can be used for personal consumption and benefit as goods.
Securities are actives that serve as methods of savings, and investments and represent profitability generally as shares of companies.
Now that we know that, it's important to note that in most countries, cryptos are considered commodities, even though they could also be considered securities, as they represent shares of companies, as well as those shares function as a good to use the chain.
In my opinion, cryptos should *generally* be commodities.
But in certain cases, I believe that they could fit into the definition of security since the VC and team share is bigger than the number of coins circulating through users.
#BTC can never be classified as a security since it is not VC-backed and the non-circulating supply is not retained by any company.
But this does not apply to #Solana, since the amount of tokens circulating in the community lies way below 50%, making the team profit from the community usage through $SOL tokens more than other chains do with their token reserves.
This is not the case for $AVAX, since the token distribution relies mostly on the community.
Only 27.8% of the tokens are not destined for the community, which means that most people use #AVAX as a good (to use the chain and its features and decentralized apps).
The world recognizing unanimously cryptos such as $AVAX, $ETH, or $BTC removes the tag of "a quick way to make you rich", "a pump and dump", and "an unstable and unreliable asset investment" that some people have put upon them.
This is how we start using crypto as a manner to make our life easier and not just something to make our folio bigger (as things should be).
Cited on this thread:
cointelegraph.com/news/cftc-declares-ether-as-a-commodity-again-in-court-filing
αɾʂԋ9000 🔺
@Arsh0x1
@avax official ambassador | DeFi Researcher | #Avalanche ambassador for @MELD_Defi | Marketing Consultant at @BioFiGlobal 🧑🏻💻