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ETH or NEM? The Confusion Surrounding Venezuela’s ‘Petro’ Token Blockchain

Last Updated March 4, 2021 5:05 PM
Francisco Memoria
Last Updated March 4, 2021 5:05 PM

As recently covered by CCN.com, Venezuela’s Petro (PTR) oil-backed cryptocurrency is now being sold to investors in its pre-sale stage. Venezuelan leader Nicolás Maduro has stated that the government already netted $735 million from the token’ sale, without backing his claim with any evidence.

The Petro is set to be used to pay taxes, fees, and other public needs, as well as in international deals, particularly those related to oil. 84.2 billion tokens will be disbursed, out of the 100 million ordered by Maduro. The country’s opposition-run congress has criticized the cryptocurrency’s sale as an “illegal and unconstitutional” instrument to illegally mortgage the country’s oil reserves, yet investors are still seemingly pouring in.

Earlier this month, citing the project’s whitepaper, CCN.com reported that the Petro is an Ethereum-based ERC-20 token that’s set to have a private presale. According to the whitepaper found on the project’s official website, hosted by the country’s Ministerio del Poder Popular para Educacion Universitaria, Ciencia e Tecnologia (MPPEUCT), that report was correct.

The whitepaper reads (roughly translated):

“The Presale will begin on February 20, 2018 and will consist of the creation and sale of an ERC20 token on the [blockchain] of the ethereum platform. This process will promote and guarantee demand for the Petro Initial Offer, which will be made later.”

However, on the Petro’s website, we can also find a buyer’s manual that explains how users can set up a wallet to hold their tokens. The manual states that the Petro “will work on the chain of NEM blocks,” adding that “the wallets and programming elements are related to this technological platform.”

Despite the discrepancy between the two documents, on Twitter, an account that claims to be the “Official account of the Journalistic Writing Room of the Presidency” seems to confirm the Petro uses the NEM blockchain. The tweet cites Venezuelan leader Nicolás Maduro, who stated  (roughly translated):

“We have signed two fundamental agreements for El Petro to circulate on the most advanced platforms in the world, thanks to the confidence of the companies Zeus and NEM.”

NEM’s official account responded to the tweet, seemingly distancing itself from Venezuela’s move. The tweet reads that NEM’s technology is “freely open to any individual organization,” and that the “NEM Foundation abstains from political endorsements.”

It’s possible that the Petro token will initially be built on top of the NEM blockchain, so it can then be swapped to an ERC-20 based one once the token sale is at a later stage, or once it’s over.

Petro’s ongoing sale

Investors who wish to purchase the Petro can do so through its official website. However, various reports suggest the token sale has been hindered by a JavaScript error.

In response to the error, Petro’s official twitter account revealed that the Petro can also be purchased through decentralized exchange EtherDelta, again hinting at it being an ERC-20 token. At press time, there are various Petro buy and sell orders on EtherDelta’s order book, but seemingly no transactions are being made.

Petro trading at EtherDelta

Critics have warned against investing in the Petro. Frederico Bond, founder of Argentinian digital startup Signature, stated that his advice would be to “treat vary carefully with this — especially considering the track record of the Venezuelan government.

Venezuela is planning on launching an exchange for the Petro next month, alongside its private sale. The Petro’s full use is expected to begin in April.

Featured image from Shutterstock.