Summary

This proposal seeks to authorize a one-time recovery and reallocation of XPR tokens to users who have been KYC-verified and lost access to their wallets during previous wallet upgrade processes (including Proton Wallet upgrades). The process will involve burning or redistributing the inaccessible XPR from the original wallets to a burn address, followed by reallocating an equivalent amount to the verified user’s new address, once identity is confirmed via KYC and blockchain history.

Background

During a series of wallet infrastructure upgrades and transitions, a number of users lost access to their wallets due to private key mismanagement or failure to properly migrate. While these users remain KYC-verified through the Proton/KYC ecosystem, their tokens remain locked in wallets they no longer control. These stranded tokens are functionally removed from circulation but still exist on-chain, which causes unnecessary supply inflation and penalizes loyal, verified users.

Proposal Details

We propose the following actions be authorized:

1. Eligibility Review

• A working group composed of XPR Network and/or Metallicus staff will be formed to coordinate and verify the eligibility of users.

• Eligibility is restricted to wallets that:

• Have completed KYC prior to wallet loss.

• Can prove ownership via previous transaction history, KYC metadata, and/or linked recovery documentation.

• Have demonstrably lost access to the private keys and are unable to recover them.

2. Token Burn or Freeze

• Upon verification, the wallet holding the lost XPR will be flagged.

• If technically possible, the tokens in the lost wallet will be:

• Sent to a designated burn address (if access is feasible), or

• Considered irretrievably lost and marked in a public ledger to ensure supply neutrality.

3. Token Reallocation

• The verified user will provide a new wallet address that has completed KYC verification.

• An equivalent amount of XPR will be minted or redistributed to the user’s new address from a recovery or community pool, or via a direct burn-and-mint process if approved.

4. Auditing & Transparency

• All recovery actions will be recorded in a publicly accessible ledger or governance portal.

• A full audit trail will be made available to the community, including verification hashes, wallet addresses (non-KYC data redacted), and burn/mint transactions.

Implementation Requirements

• Coordination with Metallicus and XPR team to access KYC history and validate user claims.

• On-chain tooling or smart contract mechanisms to handle burns and reallocation.

• Governance oversight or third-party auditing to ensure fairness and prevent abuse.

• Communication strategy to inform eligible users about the recovery program.

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Benefits

• Restores funds to legitimate users without increasing circulating supply.

• Strengthens trust in the Metallicus and XPR ecosystem.

• Demonstrates community commitment to fair recovery in good faith.

• Reduces zombie wallet inflation from inaccessible tokens.

Risks & Considerations

• Risk of fraudulent claims, mitigated by strict KYC verification and on-chain proof.

• Legal and compliance oversight depending on jurisdiction and token classification.

• Technical feasibility of burning tokens from lost wallets, if no private key exists.

If approved:

• Authorization: Metallicus and the XPR Network team are formally authorized to design and implement this recovery program.

• Execution Framework: Within a reasonable timeframe, the responsible teams will:

• Develop a secure and fair process for verification, burn, and reallocation.

• Communicate clear public instructions for affected users to submit recovery requests.

• Publish technical standards and documentation for how inaccessible wallets are flagged and handled.

• User Engagement:

• A public interface or support process will be launched to allow eligible users to participate.

• Clear, transparent communication channels will be maintained to ensure user confidence and reduce confusion.

• Reporting:

• Periodic progress updates will be shared with the community.

• Final actions—burns, reallocations, and KYC matches—will be recorded and made publicly accessible in a verifiable but privacy-compliant manner.