FAQs: How to Burn Your NFTs for Future Equity Rights

We at Truth Arts are elated to announce an offering on Republic, which presents a unique opportunity for Truth Labs NFT holders to burn your NFTs in exchange for prospective future equity in the company Truth Arts Inc.  

From today, February 27th, 2024 until March 27th, 2024 at 11:59pm Pacific time / 3am Eastern time, the window for burning will be open at https://www.app.trutharts.com. Please give yourself at least 10 minutes to participate in case you run into any technical challenges. 

By logging on to https://www.app.trutharts.com with the wallet(s) that hold your Truth Labs NFTs and your email, you will see the amount of prospective future equity you may be eligible to receive in exchange for burning your NFTs. You can choose to burn none, some, or all of your NFTs. 

How does this work? 

From today, February 27th, 2024 until March 27th, 2024 at 11:59pm Pacific time / 3am Eastern time, Truth NFT holders (including Goblintown, Illuminati, Grumpl, and McGoblin Burger holders, among others) can burn their NFTs for future equity rights in Truth Arts Inc. Once you decide that you want to burn your NFT, go to the Burn experience website and follow the steps to select which NFTs you want to burn. After the Burn window concludes, participants will be subject to a KYC process conducted by Republic, where they will be approved or rejected. If you’re approved, your NFT will be burned. If you’re rejected, your NFT will be returned to you 30-60 days after March 27th, 2024. People who burn their NFTs will receive their art back in a soul-bound NFT using Coinbase’s BASE that is non-transferable. 

Who is eligible to participate?

Anyone who held, as of the moment of the snapshot (February 20, 2024 at 9 a.m. EST), and continues to hold an NFT from Goblintown, Illuminati NFT, Grumpls, Big Inc, Mcgoblin Burger, or many other Truth-related collections and passes (Illuminati Merch Passes, Believer, and Undao). The 187, Illuminaries, Goblinaries, Puzzlers, Harbinger, Mentors, aksessorees and non-generative 1:1s in any collection are not eligible.

Does this require a KYC process? 

Yes. Your eligibility is subject to KYC. Identity verification is a standard practice as part of Republic’s Know Your Customer and Anti Money Laundering (KYC/AML) compliance. You can read more about the KYC process on Republic here. 

If for some reason you do not pass the KYC process, you will receive communications directly by email from the email address investors@republic.co to the email address you used to create a Republic account. In the event you want to reach out to the Republic team directly, you can email investors@republic.co. 

How much are my NFTs worth in future equity rights? 

Each holder has the opportunity to burn NFTs for a SAFE worth between $100 and $50,000. The sum of the value of the NFTs you want to burn will make you eligible for different levels of future equity. The tiers are outlined above. 

Holders burning NFTs will land in one of these buckets for future equity. As you select NFTs to burn, the thermometer graphic on the site will reflect the total value of your selected NFTs and what they equate to in future equity. As you select more NFTs, you will pass the 'floor' of each subsequent future equity tier, and your total burn will be worth the indicated tier's value in future equity.

For example, if you burn $1,100 of NFTs, you will redeem $1,000 of future equity, or SAFEs, in Truth Arts. Similarly, burning $40,000 of NFTs will only yield $25,000 of future equity, or SAFEs. If you try to burn NFTs totaling $99 or less, the burn will be rejected. Please be aware of which tier you are targeting and ensure that you meet it as exactly as you can.

How is the value of my NFTs derived? 

Each eligible ERC-721 NFT will be valued as the greater of either:

1. The valuation of the token at the time of the eligibility snapshot (Feb 20, 2024 at 9 am ET) plus 20%
2. The average value of tokens sold the week the token was either bought or received

Eligible ERC-1155s each have a set burn value regardless of floor price or holder purchase price.

You will know the value of your NFT by looking at the dashboard on https://www.app.trutharts.com.

Let’s break it down with an illustrative example. Let’s say a Goblintown NFT purchased on April 4th, 2023 was valued at $9,910 as that was the average sale price that week. At the time of the eligibility snapshot, the token was valued $900. The value of the NFT in Operation Resurrection will be $9,910 as it is the higher of the two values. 

How long will people be able to elect to burn their NFTs? 

Operation Resurrection will run for 30 days from February 27, 2024 until March 27, 2024 at 11:59pm Pacific time / 3am ET. Unfortunately, if you miss the window, you will not be able to participate.

How much equity is set aside for the burn?

Truth Arts has set aside $1.235M in future equity rights for the burn. This is first come, first served. Only the first KYC-approved holders who have committed to burning NFTs valued at $1.235M will be eligible to receive SAFEs. Any holder who submits an NFT after this threshold has been reached will not be eligible for a SAFE and will have their NFTs returned 30-60 days after March 27th, 2024.

What happens when I elect to burn my NFTs? 

Once you elect to burn your NFTs, the NFTs will be locked in a holding smart contract, where they will remain until the KYC process and other administrative steps are complete.  

Do I need a Republic account to participate?

Yes. Republic is a global financial technology firm at the frontier of democratizing access to the private markets. You cannot participate without a Republic account. 

Is it possible to unburn my NFT if I change my mind about participating?

You are able to cancel your participation in Operation Resurrection up until midnight on March 27, 2024 at 11:59pm Pacific time / 3am ET. You are able to cancel participation up until March 27th 2024 at 11:59pm PST. In order to cancel, you must send a request to help@trutharts.com with the email and wallets used. You will receive your NFTs back 30-60 days after the burn window closes on March 27th, 2024. 

After that date, once a NFT is burned, it is not possible to reverse the action. 

If you decide to cancel during the burn experience, your NFT will still be locked for the entirety of the holding period and returned after March 27, 2024. Truth Arts Inc. and Republic are not responsible for the inability to participate in market activity while the NFT is locked during this holding period.

What if I don’t pass the KYC process? 

If you do not pass the KYC process administered by Republic by March 27, 2024, the NFTs you elected to burn will be returned to you 30-60 days after the burn window closes on March 27th, 2024.

What are the tax and legal considerations?

We cannot provide legal or financial advice. We encourage you to speak to legal counsel and an accountant to individually assess the nuances of your personal situation.

I tried to burn my NFTs and received an error. How do I troubleshoot? 

Email help@trutharts.com with screenshots of your error and we will do our best to troubleshoot. 

How do I cancel my participation in Operation Resurrection? 

You are able to cancel participation up until March 27th 2024 at 11:59pm PST. In order to cancel your participation, you must send a request to help@trutharts.com with the email and wallets used. You will receive your NFTs back within 30-60 days after the burn window closes on March 27th, 2024. 

You are not able to partially cancel your burn. Canceling is a complete cancelation and still you will not receive your NFTs earlier than 30-60 days after March 27th.

What is a SAFE? 

A SAFE stands for a “Simple Agreement for Future Equity.” (Source: Republic)

A SAFE is an investment agreement between investors and companies looking to raise capital. Individuals make investments in exchange for the chance to earn a return—in the form of equity in the company—if the company experiences an equity financing or liquidity event (e.g., another round of financing, conducts a token-generation event*, is acquired or has an IPO).

The SAFE was originally created by Y Combinator and can be customized infinitesimally. Generally, SAFEs are widely used by angels and VCs investing in startups. 

More information can be found on Republic. 

After I've burned, I’m only seeing $.01 as the value of the SAFE. Does it take some time for this to update, or did something go wrong here?

The SAFE amount won’t change until after the burn is completed in March. Please ensure that you used the same email for the burn site AND for Republic KYC to make sure your burn amount is accurately recorded.

When will I receive my SAFE? 

Approximately two months after the close of Operation Resurrection, participants will be notified via email by Republic. Your SAFE will be visible in your Republic account. 

Can I burn NFTs held in a vault?

Yes. In order to burn NFTs, you must connect the wallet that is holding the tokens. You have two choices with a vault: 1. Connect the vault and burn or 2. Send your tokens to a delegated wallet and burn from that one. We look up wallets delegated on delegate.xyz to ensure that NFTs transferred between delegated wallets are still eligible for the burns. If you have already delegated a wallet, then you are good to go. If you haven’t and want to do this, please follow instructions on Delegate.

Who is Truth Arts? 

As you may have read, at the beginning of the year, Truth Labs and Upstream merged into one company called Truth Arts to build an entertainment and technology powerhouse, building games, content, and technology around the Truth universe. 

We’re grateful for the support of our NFT holders who have supported the Truth Labs ecosystem since Day 1, which is why we want to give you the exclusive opportunity to become shareholders in the company and be further aligned with the company’s mission, vision, and success.

Who is Republic? 

Republic is a global financial technology firm at the frontier of democratizing access to the private markets. The investment platform has made it possible to bring this offering, which is a sharedrop (essentially airdrop of shares or another type of investment contract, like a SAFE), to market.