1. As Inlock’s Recovery and Restructuring Plan approaches the final phase, we present the “Scheduled Release” and “Exit payout” (formerly known as Early payout) programs in more detail now. This document should only be interpreted in association with the Inlock Recovery and Restructuring Plan (issued 1 January 2023).

  2. Scheduled Release: As specified in the Recovery and Restructuring Plan, the phased payout of the remaining client assets will start on the 28th of April 2023, followed by the conversion and payment of the pro-rata share on the 28th of each month to the payout address specified by the client. Payments can only be made in USDC.

  3. Exit payout program: After the migrations have been completed, 100% of the assets remaining on the Inlock platform will be stored on cold storage, allowing clients who prefer not to wait for the legal process related to the damage to claim all their assets remaining on the platform, while still writing off the loss at that time. We are unable to offer a partial Exit payout, however, the option is available to our clients at any time during 2023. Clients opting for an Exit payout are exempt from the Scheduled Release phase. The conditions for the Exit payout are the same as the previous Early payout programs (except for the volume limit and the loss write-off rate), and the payout is also made in USDC.

Details of the Scheduled Release:

  1. The Scheduled Release program is open to all clients who still have assets on the Inlock platform on the 28th of April 2023. The release applies to all crypto assets held with the exception of the ILK token. If you wish to claim the value of your ILK tokens through the program, you may want to sell your ILK tokens through the ILK tokenmarket or Swap functions by the 28th of April.

  2. It is not possible to be exempt from the Scheduled Release program, even if the client does not enter their withdrawal address.

  3. Clients must enter their wallet address for the withdrawal by 12:00 (CEST) on the 28th of April. For this purpose, they can use Ethereum and Binance Smart Chain network addresses. Clients are responsible for ensuring that they have free access to the recipient wallet address and can receive USDC payments there. Executed withdrawals cannot be reversed or repeated!

  4. The conversion of crypto assets will be made immediately before the withdrawal and we will inform our clients in each case. The conversion is free of charge. The conversion will involve exchanging 2.6% of the client’s crypto assets into USDC, which will be sent to their registered recipient wallet address within a short period of time.

  5. For Binance Smart Chain wallets, the minimum amount that can be withdrawn in one transaction is $5 equivalent to USDC, and for Ethereum wallets, the minimum amount that can be withdrawn in one transaction is $100 equivalent to USDC. The monthly pro-rata conversion will also be made if the minimum amount is not reached in a given month or if no wallet address is registered. In these cases, withdrawals will be executed when the minimum amount of USDC available for withdrawal is reached or when the client ensures that the recipient wallet address is registered.

  6. Payouts under the Scheduled Release program can only be processed on the 28th of the month. We are not able to initiate payments to our clients on any other date, with a different schedule, or with a different minimum amount.

Details of the Exit payout:

  1. The Exit payout program offers a quick solution for clients who do not want to wait for the legal process surrounding the claim and wish to withdraw their assets at a proportional loss. Clients can claim all their assets stored on the platform in one lump sum on the 20th of April 2023.

  2. The Exit payout program operates according to the terms of the “Early Payout” option detailed in Inlock’s Recovery and Restructuring Plan, which means that payouts can still be initiated after conversion to USDC, but with Exit payout, this can be done without any value limitation. A partial Exit payout is not possible, and the conversion applies to all coins, including ILK tokens and the still-locked LUNA tokens that our clients received as part of the ecosystem recovery plan associated with the Terra network collapse.

  3. The conversion is an automated process and the client does not have to complete it individually. In all cases, the conversion is done before the actual payout, so there is minimal exchange rate risk when opting for the Exit payout program. The platform does not charge any additional costs for the conversion of the assets or the payout, apart from the pro-rata loss deduction.

  4. In order to participate in the Exit payout program, a recipient wallet address must be registered, for which Ethereum and BSC (Binance Smart Chain) addresses can be added. The client is solely responsible for ensuring that the receiving wallet address is freely accessible and can receive USDC payouts!  We are not able to reverse or replicate any withdrawals made!

  5. The loss write-off for the Exit payout program is expected to be between 15-20% but may improve in the coming days depending on the ongoing migrations.

Other regulations following the launch of the Scheduled Release:

  1. On the 28th of April 2023, all customers with a positive balance on the Inlock platform will start the scheduled conversion and release. After this date, it will still be possible to take advantage of the Exit payout program, but the amount already paid out will still be included in the loss deduction applied. This also applies if the client has not registered a recipient wallet address for the Scheduled release!

  2. The delayed Exit payout program is available until the 31st of December 2023, and we reserve the right to extend the program up to the year 2024 as well.

  3. From the 28th of April 2023, the loss write-off rate may change in light of the assets available to the platform and their exchange rate. Based on our forecast, an increase in crypto asset prices will decrease the proportional loss write-off, while a decrease in crypto asset prices may increase the proportional loss!

Calculation example for a delayed Exit payout following the launch of the Scheduled release:

  1. In this example, the client holds 1 BTC on the Inlock platform and receives 2.6% over five months through the Scheduled Release. Accordingly, they would receive the following payouts between 28 April 2023 and 28 September 2023, assuming the bitcoin exchange rate does not fluctuate significantly from the current exchange rate: 730 USDC, 725.5 USDC, 742 USDC, 722.8 USDC, 751.3 USDC. Over the five months, a total of 3671.6 USDC was paid out, and the balance stored on Inlock decreased to 0.87 BTC.

  2. Supposing that exchange rates develop favorably during the month of October 2023, which slightly improves the pro-rata loss write-off associated with the Exit payout program, the client decides to exercise the Exit payout option on the remaining balance. In this case, the rate of loss relief is calculated on the basis of the current recorded balance and the amount of Early releases paid up to that date.

  3. If the proportional loss write-off rate is 16% in October and the bitcoin exchange rate is 30.000 USD, then after converting 0.87 BTC, the client’s balance is 26100 USDC + 3671.6 USDC, which is reduced by 16%, which equals 25008.144 USDC. From this, the already paid 3671.6 USDC is deducted, so the client is entitled to a payout of 21336.544 USDC, after which the platform will no longer maintain an additional asset balance for the client.

Questions & Answers – Scheduled release

Q: I do not wish to take advantage of the Scheduled Release program. Is this possible?
We are unable to provide this option on the Inlock platform. In our Recovery and Restructuring Plan, the Scheduled Release applies to all clients who still hold assets on the Inlock platform.

Q: I have bitcoin (or other cryptocurrencies) on the Inlock platform, could I get that instead of USDC?
You can only withdraw funds in USDC, but your assets will be converted beforehand, for which no fees will be charged.

Q: I only have a very small amount of assets on the Inlock platform, I don’t want to deal with this on a monthly basis, can I just give up on this entirely?
Yes, please send an email to [email protected] and our colleagues will assist you!

Q: Does the Scheduled Release also affect ILK tokens and locked LUNA tokens?
No, ILK tokens can be sold at any time, in this case, the counter value will be paid in the same scheduled way. The blocked LUNA tokens will be partially released on a regular basis until the end of 2024, during which time they will also be paid through the Scheduled Release.

Q: If the value of the assets converted each month is below the minimum amount that can be withdrawn, will the conversion still be performed?
Yes

Q: If I do not record a recipient wallet address, will the conversion still be completed?
Yes

Q: Will I get 100% of my assets through the Scheduled Release?
The payout can reach 100% in the following two cases:

  • if legal proceedings are eventually completed and the platform is compensated, 
  • if the migration to the Vigiler platform is capable of extracting the lost liquidity from Inlock to the extent that the company’s own resources can easily provide 100% compensation. 

Q: When can I expect to get 100% of my assets back?
The Scheduled Release is expected to be completed in 3 years. If the legal process is successfully resolved or we are able to self-fund the full compensation, this could potentially lead to a 100% payout within this timeframe.

Q: Why is it not possible to receive 80% in advance and the remaining amount after the legal proceedings have been settled?
Clients were able to store their assets on Inlock during the isolation in an “as-is” manner, so there was no conversion or balancing regardless of the amount of damage from different assets. It would only be possible to pay a lump sum upfront if all clients agree to have the remaining balance set at a certain predetermined asset value (e.g. the dollar value at the time of payment). The preliminary survey indicates that the majority of clients have been reluctant to accept this option, as they do not want to give up the potential exchange rate gains on assets.

Q: Is it possible to request an individual payment other than the conditions specified above?
We are not able to arrange individual agreements where the client is prioritized or favored to the detriment of other clients. However, we strive to be open to any individual, group, or alternative arrangements as long as they do not increase the risks for other clients. We welcome such requests to [email protected] with a concrete proposal.

Q: How would the Scheduled Release program be affected in case Inlock receives partial or full compensation during the legal process?
If the total value of the assets managed by the Inlock platform during a Scheduled Release exceeds the total value of the assets recorded to clients, the Scheduled Release will be suspended immediately and our clients will be compensated in one lump sum without further delay!

Questions & Answers – Loss deduction

Q: Do I have to pay a loss deduction with the Scheduled Release?
No, monthly payments are accounted to our clients as if we owned 100% of the total collateral.

Q: If I have a completed migration to Vigiler (reboot platform), do I have to pay a loss deduction in any cases to the assets stored on Vigiler?
No. Clients who complete the migration are exempted from any kind of loss deduction on Vigiler platform by creating a compensation balance. However, if the client has non-migrateble assets on Inlock platform (e.g. LUNA, ILK or UNI tokens), future management of these assets is only possible using the methods decribed in this documentation (Exit payout or Scheduled release).This exception also applies to assets that arrive at the Inlock account after migration via internal transfer, conversion, transfer or token market operations.

Q: On what legal basis can Inlock oblige me to write off a loss?
Inlock has no legal basis to force its clients to write off losses. This decision is entirely up to the client and if they accept this option, they are relieved from further action and risk.

Q: On what legal basis does Inlock retain my money and only return it through a loss deduction?
Inlock does not restrict clients solely to taking a loss write-off. In fact, we offer several alternatives to fully compensate our clients, such as migration or Scheduled Release.

Q: What legal remedies are available in case I want to reclaim the loss I suffered during the Early payout or the Exit payout?
If you have chosen the Early payout or Exit payout option and accepted the associated terms and conditions, you have accepted the loss write-off as well, waiving any further legal claims and you have no legal recourse in this case.

Q: What percentage exactly is the loss deduction?
The loss deduction rate used in the Exit payout will be announced on the 20th of April 2023, when the program opens. Based on the available data and information from early April, the rate is expected to be between 15-20%. The level of applicable loss write-off will be determined on the basis of the actual volume of collateral deficiency.

Q: Is the loss deduction rate fixed or will it change in the future?
Between the 20th and 28th of April 2023, the Exit payout option is also available alongside the pre-fixed and announced loss deduction. Thereafter, the amount of loss write-off applied will be adjusted to the change in the crypto asset price or the Scheduled Release that has already partially taken place. 

Q: How often will the loss deduction rate be updated?
The loss deduction rate will be updated after each Scheduled Release payment. This occurs on the 28th of each month. Apart from this, the loss deduction for the delayed Exit payout will only be adjusted if there is a significant change in asset prices or if the platform is partially compensated from any source.

Q: I have chosen Early Payout or Exit payout: after full compensation, can I claim my money from the Vigiler reserve fund after it has been written off as a loss?
No, the Vigiler platform reserve fund is accumulated by the transactions of Vigiler platform clients who have migrated to the new platform and accepted its conditions to complete the migration. The Vigiler platform reserve fund is solely for the safety and compensation of the platform’s clients.

Q: What happens to the funds that I give up?
The decrease in asset value used in the write-off is always due to a shortage of collateral as the platform does not have that, so the client accepts the shortage of collateral and requests the full amount that we have recorded in their account for the outstanding claim. We do not register the reduced balance from the loss write-off as a debt for clients who opt for the Early Payout and Exit Payout programs, as it has been waived by the client and cannot be requested or claimed by our client from the Service Provider in any way afterwards.

Q: What happens to the funds that were released on the Vigiler platform as the compensation balance?
For clients who complete the migration process, 50% of the asset value will be converted and the USDC will become a compensating balance. With this migration option, clients will fully take over the original damage to their USDC assets that occurred in November 2022. This allows clients to contribute to the full isolation of the damage from the Inlock platform in their case, which will improve the overall outstanding damage on the Inlock platform. As the converted assets are completely unsecured, no free assets are released during the conversion.

Q: What happens if all Inlock clients have been paid out and all compensation balances have been released on the Vigiler platform, but there is still compensation left? Who will own this money?
This matter is covered in the Public offer for the conditional assumption of customer claims document under the heading of “Compensation from Inlock’s surplus assets”, which states that once all remaining clients have been fully compensated, the residual assets of Inlock (if there are any) will be used to replenish the Vigiler Platform’s reserve fund entirely.

Q: Why will Vigiler clients receive any potential excess compensation?
The surplus will not be paid to Vigiler’s clients, but (if this would be the case) will be used to replenish the Vigiler platform reserve fund. The purpose of the reserve fund is to enable the new platform to be self-sufficient to handle any damage, just as we did with Inlock immediately after the damage occurred.

Q: What does Inlock or Vigiler spend their profits on while I have to accept the loss deduction?
Neither Inlock nor the Vigiler platform makes any profit from the compensation. While Inlock has no direct revenue-generating activities, the cost structure for Vigiler has been designed in such a way that more than two-thirds of the platform fees are used to reduce the compensation balances. The remaining portion is allocated exclusively to the necessary costs to operate and develop the platform.

Q: If I choose the delayed Exit payout after I have already received one or more Scheduled Releases, how does this affect the amount of the loss deduction?
The loss deduction for a delayed Exit payout is calculated by considering all previous Scheduled Release payments as 100% payouts, therefore the client may receive a proportionately worse loss deduction offer.

Q: Will I still be eligible for a delayed Exit payout in 2024?
The delayed Exit payout program will be maintained until the 31st of December 2023 under the announced conditions. The platform reserves the right to extend the delayed Exit payout to 2024 with updated or changed conditions.

Q: Can Inlock terminate the delayed Exit payout option unilaterally before the 31st of December 2023?
At its sole discretion, Inlock cannot terminate the Exit payout option until the 31st of December 2023.

Q: What are my options if the delayed Exit payout option expires?
The Scheduled Release Program