Token Transfer
Similar to regular fungible tokens, there are 2 main steps in general to make a transfer. However, we offer more precise transaction configurations to deal with tax payments.
Last updated
Similar to regular fungible tokens, there are 2 main steps in general to make a transfer. However, we offer more precise transaction configurations to deal with tax payments.
Last updated
OWY is a modified ERC-20 token with the standard transfer and transferFrom methods. These methods are enhanced with configurable transaction options that can be customized during a transfer.
The transfer function is used to send tokens directly from the sender’s address to the recipient’s address, similar to sending an email to someone; it is a direct transfer method.
The transferFrom function allows for a delegated transfer. For example, Bob can approve Alice to access a specific amount of her funds through a contract. Bob can then use the transferFrom function to transfer the approved amount on Alice's behalf. She can then use these funds herself or transfer them to other contracts.
Standard approval is the most commonly used method in ERC-20 tokens. It is signed by an externally owned account (EOA), which is a type of wallet familiar to most users.
Next, let's explore the transaction options. OWY offers various options to tailor your transaction strategy, including Liquefaction, Tax Payment Options, and Tax Slippage Limit.
Transaction options are configured to strategize on value utilization and tax payment settings. Essentially, these settings determine how, where, and how much tax will be paid.
Whenever an OWY transfer occurs, the sender is responsible for the tax. The value stored in their OWY tokens is used as a tax discount for the transaction. However, this results in the recipient receiving tokens that no longer retain that value. If the recipient uses these tokens immediately, they will have to pay the tax without benefiting from any time accumulation value as a discount.
Liquefaction is implemented to address this limitation. It allows the sender to transfer tokens with their original stored value intact, so the recipient can spend them immediately with full liquidity. However, since the value is transferred along with the tokens, the sender forfeits any transaction discount from the time accumulation and must pay the tax without that discount. The advantage is that the tax accumulation discount still applies to the sender because the tax accumulation value is stored separately from OWY tokens, unlike the time accumulation value.
This is the default setting for an OWY transfer: The tax amount is deducted from the transfer value. For example, if Bob intends to send Alice 1,000 OWY and 15 OWY is deducted as tax, Alice will receive 985 OWY. In practice, the tax amount can fluctuate, which may make the final amount received by the recipient unpredictable.
"Tax out-value" means that the tax amount is deducted externally from an account balance. In this case, the tax is deducted from Bob's balance, ensuring that Alice receives the full transfer value of 1,000 OWY. However, Bob must ensure that he has enough OWY left to cover the tax; otherwise, the transaction will be reverted.
Alternatively, we offer tax delegation as an additional option. For example, Kevin, Bob's uncle, wants to pay the tax on Bob's behalf. Kevin can approve a tax delegation for Bob with a specified amount limit. As a result, the tax for Bob’s transaction will be deducted from Kevin's balance instead.
This tax delegation approval is separate from the previously mentioned transfer approval. The approved funds can be used exclusively for tax payment activities.
This extension also benefits those with affiliations. For example, a company might allocate a tax delegation limit as a budget to facilitate transactions for employees paying for business operations. Similarly, a business could create a monthly subscription plan to cover tax payments for subscribers within an appropriate and specified limit. The business benefits if subscribers do not transact frequently within the subscription period, effectively managing and optimizing tax costs.
The final customization option is the tax slippage limit. This feature allows users to set a maximum tax amount for each of their transactions. After submitting the transaction, if the calculated tax exceeds the set limit, the transaction will be reversed. For users who do not wish to set a limit, they can either leave the input blank or set it to zero, indicating that there is no tax limit.
All three aforementioned transaction options can be combined to customize each transaction. This flexibility opens up a variety of transaction planning and decision-making strategies, allowing users to manage and optimize their outcomes effectively.
To maintain ERC-20 properties, the regular transfer and transferFrom functions from the ERC-20 standards, where users only set the destination and the amount of tokens without any transaction options, still exist in the OWY token. We have set a default configuration for users, which is a combination of the default transfer (not liquefied), tax in-value, and no slippage limit. However, for those seeking full customization, our additional transfer methods are available for more tailored transactions.
We've discussed how to manage the discount value, but it's important to clarify that this refers specifically to the time accumulation value as a discount. The tax accumulation, on the other hand, is reusable and automatically applied as a discount to all transactions without the need for manual management.
We also support for smart contract accounts, which enables gasless approval and facilitates batched transactions.
After specifying the liquefaction option, the system calculates the tax amount using the formula. The tax payment options will then determine the source from which the tax will be deducted.
