Stock Splits

What is a Stock Split and Why You Need to Take Action

A stock split is a corporate action in which a company increases the number of its outstanding shares by issuing more shares to current shareholders. This process reduces the price of each share, making it more affordable for investors without altering the overall market value of the company. For traders using platforms like TradeX to purchase dTokens on DeFi Meta Chain, it’s crucial to take action before a stock split to ensure that your investments accurately reflect the post-split adjustments.

When a stock split occurs, the value of each individual token must be recalibrated to reflect the new, lower price per share, while increasing the total number of tokens you hold. If you’re trading dTokens, such as those on the DeFi Meta Chain, you need to manage your funds properly and ensure your holdings are updated to match the new share structure. This involves transferring tokens back to their native layer before the split occurs.

Examples of Stock Splits

For instance, MicroStrategy recently announced a 10-for-1 stock split effective August 7, 2024. In this scenario, each shareholder received ten shares for every one share they owned, while the price per share was adjusted to a tenth of its pre-split value. For dMSTR token holders, this meant receiving ten tokens for every one held, along with a new token ID to reflect the split-adjusted price. Users were advised to transfer their tokens to the native DeFiChain layer to ensure a seamless transition.

In case you missed the action before the split - read below

If you’ve missed taking action before a stock split on the EVM (Ethereum Virtual Machine) side, you can still manage your tokens using a function available in the DST20 token contract. Although this contract is not verified on the explorer you can use Remix to execute the necessary functions. Please note that this process requires technical expertise.

What is Remix?

Remix is a powerful platform for building and testing smart contracts. It allows you to interact with deployed smart contracts, even if the contract’s full details are not publicly available.

Steps to Execute the Function:

  1. Access Remix: Visit Remix Ethereum to get started.

  2. Create a New File:

    Open a new file in Remix and enter the code below

  3. Compile the Code: Use the shortcut Cmd + S (or Ctrl + S) to compile the code.

  4. Deploy & Run:

    1. Navigate to the “Deploy & Run” tab.

    2. In the top-left dropdown menu, select “Injected Provider (MetaMask).” Make sure your MetaMask is connected and the MetaChain network is selected.

  5. Connect to the Contract:

    1. Ensure “Defichain Intrinsic” is selected as the contract type.

    2. Enter the address 0xFF00000000000000000000000000000000000042 in the “At Address” field and click “At Address.” (be careful - this is the specific address for the dToken/stock which is splitted. In this case it is MSTR/v1).

  6. Interact with the Contract:

Step 2: Open a new file in Remix and enter the code below

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.0;

contract DST20V2 {

   function upgradeToken( uint256 amount) public {
    }
}

Caution

This process is technical and requires a good understanding of smart contracts and the Ethereum Virtual Machine side. If you are not comfortable with these steps, it is advisable not to proceed. However, if you are interested in learning, this is a valuable opportunity to explore the functionalities of smart contracts.

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