The liquidation option is open to registered and verified users. It exchanges a person's C20 tokens for their NAV share. The token holder receives the equivalent ETH. This is explained in Section V of the Crypto20 Whitepaper.
This feature secures a floor for the market price. Persons are therefore unlikely to sell below NAV. If C20 was to trade at a discount, however, users would take advantage of the arbitrage opportunity. The market discount to NAV is likely to be temporary.
This is a largely automated process, governed by an Ethereum contract - it is therefore capable of being viewed on block explorers such as Etherscan.
There is a simple-to-use decentralized application (dApp) available on the website for liquidation purposes. Please note that this feature requires the use of MetaMask, alongside a whitelisted address. If your tokens are elsewhere, in order to use the dApp, please install MetaMask and transfer the tokens to that address. The address that you liquidate from must also have a minor amount of ETH in it, in order to cover network fees (for example, 0.001 is ordinarily plenty).
It is possible, with a whitelisted address, to liquidate from other clients such as MyEtherWallet (MEW) or MyCrypto. The principle here is largely the same. Please see the following instructions for MyCrypto, which we recommend using over MEW as MEW is buggy at times.
- Navigate to https://mycrypto.com/contracts/interact - ensure you are at the correct website with a valid SSL certificate.
- Enter the contract address (0x26E75307Fc0C021472fEb8F727839531F112f317) and then the Contract ABI. You can copy and paste the ABI from this page. It is the second box.
- Select the 'requestWithdrawal' function and specify the amount of C20 tokens to withdraw including all 18 decimals e.g. 50 tokens is written 50e18. If you wish to include decimals 50.15 tokens is written 50.15e18.
- Unlock/access your account (through a hardware wallet, MetaMask, private key, etc.)
- It will ask you to enter a gas limit, use a high number to ensure transaction success (e.g. 200,000). For optimal GWEI settings check the ETH gas station. For an explanation of what gas limit and GWEI are and why these settings are important, see this article. You can leave the 'amount to send' field empty.
- Send the transaction. You can track whether it succeeded on Etherscan.
- Wait for the price update, which happens every hour on the hour, and then (following 1-6 again if necessary) select the 'withdraw' function (with no arguments) to complete the withdrawal. You must complete the withdraw transaction to receive your ETH.
It is also possible to redeem tokens from a hardware wallet, in concert with MetaMask, and thus you can use the website dApp. Please see the following:
- Redeeming with Trezor/MetaMask: https://wiki.trezor.io/Apps:MetaMask
- Redeeming with Ledger/MetaMask: https://www.ledger.com/metamask/
There is a troubleshooting article, if you are still having trouble, here.