CIP-0082: Establish a 5% Development Fund (Foundation-Governed)
- Please see CIP below open for discussion. Feel free to reach out if you have questions!
Title: Establish a 5% Development Fund (Foundation-Governed)
Author(s): Eric Saraniecki
Type: GovernanceAbstract
This CIP ratifies the creation of a Development Fund equal to 5% of all future CC mint emissions, allocated to a Foundation-governed Fund. The Fund exists to sustain long-term investment in the Canton protocol (core R&D, dev tools, security, audits, reference implementations, DeFi app(s) liquidity seeding, critical infra). The fund is prospective (no retroactive allocation) and is taken pro-rata from all issuance streams so that every pool contributes, reflecting that everyone benefits from protocol investment.
A subsequent CIP will propose the implementation mechanics (addresses, start epoch/height, accounting hooks, spend process, guardrails).
Motivation
Many networks finance protocol growth initiatives via a premine/treasury. Canton was fair-launched, so there is no large premine to draw from. Meanwhile, protocol improvements are public goods: security upgrades, performance work, and core features accrue to all participants (validators, builders, venues, users).
Two commonly suggested alternatives are (a) a mega Super Validator (SV) or (b) ad-hoc grants. A single large SV dilutes the SV pool and decays quickly, undermining funding sustainability. Ad-hoc grants lack predictability and are fragile to market cycles.
A reasonably sized fund (5%) creates durable, programmatic funding without changing the overall issuance schedule—reallocating, not inflating beyond plan—and ensures all pools contribute to a shared public good.
The Foundation, with its current SV Weight of 10 and approximately 1.5 billion CC in its treasury, faces significant expenses as it bootstraps the ecosystem. These costs will deplete a substantial portion of its funds. Furthermore, the value of an SV is subject to decay due to the expansion of the SV pool and upcoming halvings. Therefore, it is crucial to establish a sustainable funding source that can support the network's long-term objectives.
Specification
#
Decision
Scope / What Must Be True
Parameter / Target
Notes & Acceptance
S1
Establish Development Fund
A Foundation-controlled Development Fund is recognized as the canonical sink for the fund; custody and signers per Foundation bylaws.
One primary on-chain address
Activation contingent on subsequent CIP specifying address, custody, and accounting hooks.
S2
Fund Rate
Fund applies to all future mint emissions (prospective only).
5% of each mint event.
No retroactive allocation. Does not change total planned issuance—reallocation only.
S3
Source of Funds
Fund is taken pro-rata from all issuance streams (validators/SVs, ecosystem, other pools).
Pro-rata reduction to each stream equal to 5% of its otherwise-due amount.
Ensures “everyone contributes” because everyone benefits. Avoids concentrating dilution solely in the SV pool.
S4
Governance of Spend
Foundation administers and allocates funds. Community participation occurs via Foundation processes.
Foundation governance; processes to be defined and refined by the Foundation.
Subsequent CIP must detail spend workflows, disclosures, conflicts policy, and appeals.
S5
Transparency & Reporting
Foundation publishes quarterly reports (receipts, balances, commitments, disbursements, outcomes) and annual audit/attestation.
Quarterly ops report; annual independent attestation.
First report due ≤90 days after first receipt of funds.
S6
Sunset / Review
Formal review of fund effectiveness and rate.
Every 12 months.
Review may propose rate change or wind-down via new CIP.
S7
Migrate code repositories
This CIP ratifies the decision to move the Splice, Daml, and Canton code repositories to a Foundation controlled repo
As soon as practical
Relying on setting up the appropriate infrastructure at the Canton Foundation and governance to take over those processes from LFDT and DA
Rationale
When Canton launched, it was believed the Foundation’s SV would be sufficient to fund core needs. In practice, once you include grants, listings, and forward protocol development, SV emissions alone are not sufficient—and we don’t want funding gaps to slow or prevent critical work. This request is about establishing a predictable, programmatic base for protocol investment before we expand grants and other ecosystem-growth activities.
Why a fund, not an SV?
A single, large SV concentrates dilution on the validator pool and decays—producing a front-loaded stream that undermines long-term sustainability. A thin slice over all mints is lighter-touch, fairer across stakeholders, and predictable.Why Foundation-governed?
The Foundation includes members beyond SVs and has a mandate to run open processes (RFPs, grants, audits). Protocol work is a public good; the spending venue should be broader than validator governance alone.Why 5%?
Small enough to maintain competitive validator economics, large enough to reliably fund core protocol work across cycles. It is also simple to communicate and implement.
Alternatives Considered
Large Super Validator: Simple to reason about, but centralized, rapidly decaying, and disproportionately dilutive to SVs.
Ad-hoc Grants / Donations: Unreliable over market cycles; fails the predictability and sustainability tests.
One-time “treasury mint”: Creates retroactive inflation and governance contention; lacks ongoing alignment between protocol growth and funding.
Economic Impact
No change to total issuance—this is a reallocation of 5% of each future mint.
Uniform, predictable dilution across all issuance streams.
Expected to increase long-run network value via sustained investment in security, performance, and core features—benefiting validators, builders, and users.
Backwards Compatibility
Prospective only. No retroactive reallocation. Existing balances and historical distributions are unaffected.
Security Considerations
Fund custody/operations must follow Foundation controls.
Concentration risk is mitigated by reporting, audits, and periodic review (S7).
- toggle quoted message Show quoted textThank you for sharing this Eric,Proof Group strongly supports this and is happy to be an endorser for this CIP.While a lot of work needs to be done in another CIP to hammer out more of the specifics, directionally this makes a ton of sense. For context other ecosystems have +40-50% ecosystem funds that help bootstrap their contributors. Canton's decentralized/ no-premine launch means much of this is covered by contributors at a loss for the greater good of the network. Over time it makes sense to introduce a small ecosystem fund to help fund some of this.On Wed, Sep 24, 2025 at 3:36 PM DrAmandaLMartin via lists.sync.global <amartin=linuxfoundation.org@...> wrote:Please see CIP below open for discussion. Feel free to reach out if you have questions!
Title: Establish a 5% Development Fund (Foundation-Governed)
Author(s): Eric Saraniecki
Type: GovernanceAbstract
This CIP ratifies the creation of a Development Fund equal to 5% of all future CC mint emissions, allocated to a Foundation-governed Fund. The Fund exists to sustain long-term investment in the Canton protocol (core R&D, dev tools, security, audits, reference implementations, DeFi app(s) liquidity seeding, critical infra). The fund is prospective (no retroactive allocation) and is taken pro-rata from all issuance streams so that every pool contributes, reflecting that everyone benefits from protocol investment.
A subsequent CIP will propose the implementation mechanics (addresses, start epoch/height, accounting hooks, spend process, guardrails).
Motivation
Many networks finance protocol growth initiatives via a premine/treasury. Canton was fair-launched, so there is no large premine to draw from. Meanwhile, protocol improvements are public goods: security upgrades, performance work, and core features accrue to all participants (validators, builders, venues, users).
Two commonly suggested alternatives are (a) a mega Super Validator (SV) or (b) ad-hoc grants. A single large SV dilutes the SV pool and decays quickly, undermining funding sustainability. Ad-hoc grants lack predictability and are fragile to market cycles.
A reasonably sized fund (5%) creates durable, programmatic funding without changing the overall issuance schedule—reallocating, not inflating beyond plan—and ensures all pools contribute to a shared public good.
The Foundation, with its current SV Weight of 10 and approximately 1.5 billion CC in its treasury, faces significant expenses as it bootstraps the ecosystem. These costs will deplete a substantial portion of its funds. Furthermore, the value of an SV is subject to decay due to the expansion of the SV pool and upcoming halvings. Therefore, it is crucial to establish a sustainable funding source that can support the network's long-term objectives.
Specification
#
Decision
Scope / What Must Be True
Parameter / Target
Notes & Acceptance
S1
Establish Development Fund
A Foundation-controlled Development Fund is recognized as the canonical sink for the fund; custody and signers per Foundation bylaws.
One primary on-chain address
Activation contingent on subsequent CIP specifying address, custody, and accounting hooks.
S2
Fund Rate
Fund applies to all future mint emissions (prospective only).
5% of each mint event.
No retroactive allocation. Does not change total planned issuance—reallocation only.
S3
Source of Funds
Fund is taken pro-rata from all issuance streams (validators/SVs, ecosystem, other pools).
Pro-rata reduction to each stream equal to 5% of its otherwise-due amount.
Ensures “everyone contributes” because everyone benefits. Avoids concentrating dilution solely in the SV pool.
S4
Governance of Spend
Foundation administers and allocates funds. Community participation occurs via Foundation processes.
Foundation governance; processes to be defined and refined by the Foundation.
Subsequent CIP must detail spend workflows, disclosures, conflicts policy, and appeals.
S5
Transparency & Reporting
Foundation publishes quarterly reports (receipts, balances, commitments, disbursements, outcomes) and annual audit/attestation.
Quarterly ops report; annual independent attestation.
First report due ≤90 days after first receipt of funds.
S6
Sunset / Review
Formal review of fund effectiveness and rate.
Every 12 months.
Review may propose rate change or wind-down via new CIP.
S7
Migrate code repositories
This CIP ratifies the decision to move the Splice, Daml, and Canton code repositories to a Foundation controlled repo
As soon as practical
Relying on setting up the appropriate infrastructure at the Canton Foundation and governance to take over those processes from LFDT and DA
Rationale
When Canton launched, it was believed the Foundation’s SV would be sufficient to fund core needs. In practice, once you include grants, listings, and forward protocol development, SV emissions alone are not sufficient—and we don’t want funding gaps to slow or prevent critical work. This request is about establishing a predictable, programmatic base for protocol investment before we expand grants and other ecosystem-growth activities.
Why a fund, not an SV?
A single, large SV concentrates dilution on the validator pool and decays—producing a front-loaded stream that undermines long-term sustainability. A thin slice over all mints is lighter-touch, fairer across stakeholders, and predictable.Why Foundation-governed?
The Foundation includes members beyond SVs and has a mandate to run open processes (RFPs, grants, audits). Protocol work is a public good; the spending venue should be broader than validator governance alone.Why 5%?
Small enough to maintain competitive validator economics, large enough to reliably fund core protocol work across cycles. It is also simple to communicate and implement.
Alternatives Considered
Large Super Validator: Simple to reason about, but centralized, rapidly decaying, and disproportionately dilutive to SVs.
Ad-hoc Grants / Donations: Unreliable over market cycles; fails the predictability and sustainability tests.
One-time “treasury mint”: Creates retroactive inflation and governance contention; lacks ongoing alignment between protocol growth and funding.
Economic Impact
No change to total issuance—this is a reallocation of 5% of each future mint.
Uniform, predictable dilution across all issuance streams.
Expected to increase long-run network value via sustained investment in security, performance, and core features—benefiting validators, builders, and users.
Backwards Compatibility
Prospective only. No retroactive reallocation. Existing balances and historical distributions are unaffected.
Security Considerations
Fund custody/operations must follow Foundation controls.
Concentration risk is mitigated by reporting, audits, and periodic review (S7).
- toggle quoted message Show quoted textI echo Chris's thoughts here and strongly support this.
Thanks for putting this together Eric.
Y.On Wed, Sep 24, 2025 at 4:42 PM Chris Matturri <chris@...> wrote:Thank you for sharing this Eric,Proof Group strongly supports this and is happy to be an endorser for this CIP.While a lot of work needs to be done in another CIP to hammer out more of the specifics, directionally this makes a ton of sense. For context other ecosystems have +40-50% ecosystem funds that help bootstrap their contributors. Canton's decentralized/ no-premine launch means much of this is covered by contributors at a loss for the greater good of the network. Over time it makes sense to introduce a small ecosystem fund to help fund some of this.On Wed, Sep 24, 2025 at 3:36 PM DrAmandaLMartin via lists.sync.global <amartin=linuxfoundation.org@...> wrote:Please see CIP below open for discussion. Feel free to reach out if you have questions!Title: Establish a 5% Development Fund (Foundation-Governed)
Author(s): Eric Saraniecki
Type: GovernanceAbstract
This CIP ratifies the creation of a Development Fund equal to 5% of all future CC mint emissions, allocated to a Foundation-governed Fund. The Fund exists to sustain long-term investment in the Canton protocol (core R&D, dev tools, security, audits, reference implementations, DeFi app(s) liquidity seeding, critical infra). The fund is prospective (no retroactive allocation) and is taken pro-rata from all issuance streams so that every pool contributes, reflecting that everyone benefits from protocol investment.
A subsequent CIP will propose the implementation mechanics (addresses, start epoch/height, accounting hooks, spend process, guardrails).
Motivation
Many networks finance protocol growth initiatives via a premine/treasury. Canton was fair-launched, so there is no large premine to draw from. Meanwhile, protocol improvements are public goods: security upgrades, performance work, and core features accrue to all participants (validators, builders, venues, users).
Two commonly suggested alternatives are (a) a mega Super Validator (SV) or (b) ad-hoc grants. A single large SV dilutes the SV pool and decays quickly, undermining funding sustainability. Ad-hoc grants lack predictability and are fragile to market cycles.
A reasonably sized fund (5%) creates durable, programmatic funding without changing the overall issuance schedule—reallocating, not inflating beyond plan—and ensures all pools contribute to a shared public good.
The Foundation, with its current SV Weight of 10 and approximately 1.5 billion CC in its treasury, faces significant expenses as it bootstraps the ecosystem. These costs will deplete a substantial portion of its funds. Furthermore, the value of an SV is subject to decay due to the expansion of the SV pool and upcoming halvings. Therefore, it is crucial to establish a sustainable funding source that can support the network's long-term objectives.
Specification
#
Decision
Scope / What Must Be True
Parameter / Target
Notes & Acceptance
S1
Establish Development Fund
A Foundation-controlled Development Fund is recognized as the canonical sink for the fund; custody and signers per Foundation bylaws.
One primary on-chain address
Activation contingent on subsequent CIP specifying address, custody, and accounting hooks.
S2
Fund Rate
Fund applies to all future mint emissions (prospective only).
5% of each mint event.
No retroactive allocation. Does not change total planned issuance—reallocation only.
S3
Source of Funds
Fund is taken pro-rata from all issuance streams (validators/SVs, ecosystem, other pools).
Pro-rata reduction to each stream equal to 5% of its otherwise-due amount.
Ensures “everyone contributes” because everyone benefits. Avoids concentrating dilution solely in the SV pool.
S4
Governance of Spend
Foundation administers and allocates funds. Community participation occurs via Foundation processes.
Foundation governance; processes to be defined and refined by the Foundation.
Subsequent CIP must detail spend workflows, disclosures, conflicts policy, and appeals.
S5
Transparency & Reporting
Foundation publishes quarterly reports (receipts, balances, commitments, disbursements, outcomes) and annual audit/attestation.
Quarterly ops report; annual independent attestation.
First report due ≤90 days after first receipt of funds.
S6
Sunset / Review
Formal review of fund effectiveness and rate.
Every 12 months.
Review may propose rate change or wind-down via new CIP.
S7
Migrate code repositories
This CIP ratifies the decision to move the Splice, Daml, and Canton code repositories to a Foundation controlled repo
As soon as practical
Relying on setting up the appropriate infrastructure at the Canton Foundation and governance to take over those processes from LFDT and DA
Rationale
When Canton launched, it was believed the Foundation’s SV would be sufficient to fund core needs. In practice, once you include grants, listings, and forward protocol development, SV emissions alone are not sufficient—and we don’t want funding gaps to slow or prevent critical work. This request is about establishing a predictable, programmatic base for protocol investment before we expand grants and other ecosystem-growth activities.
Why a fund, not an SV?
A single, large SV concentrates dilution on the validator pool and decays—producing a front-loaded stream that undermines long-term sustainability. A thin slice over all mints is lighter-touch, fairer across stakeholders, and predictable.Why Foundation-governed?
The Foundation includes members beyond SVs and has a mandate to run open processes (RFPs, grants, audits). Protocol work is a public good; the spending venue should be broader than validator governance alone.Why 5%?
Small enough to maintain competitive validator economics, large enough to reliably fund core protocol work across cycles. It is also simple to communicate and implement.
Alternatives Considered
Large Super Validator: Simple to reason about, but centralized, rapidly decaying, and disproportionately dilutive to SVs.
Ad-hoc Grants / Donations: Unreliable over market cycles; fails the predictability and sustainability tests.
One-time “treasury mint”: Creates retroactive inflation and governance contention; lacks ongoing alignment between protocol growth and funding.
Economic Impact
No change to total issuance—this is a reallocation of 5% of each future mint.
Uniform, predictable dilution across all issuance streams.
Expected to increase long-run network value via sustained investment in security, performance, and core features—benefiting validators, builders, and users.
Backwards Compatibility
Prospective only. No retroactive reallocation. Existing balances and historical distributions are unaffected.
Security Considerations
Fund custody/operations must follow Foundation controls.
Concentration risk is mitigated by reporting, audits, and periodic review (S7).
- toggle quoted message Show quoted text
From: cip-discuss@... <cip-discuss@...> on behalf of Yiannis Varelas via lists.sync.global <y=fivenorth.io@...>
Sent: Wednesday, September 24, 2025 8:43:18 PM
To: cip-discuss@... <cip-discuss@...>
Subject: Re: [cip-discuss] CIP-XXXX: Establish a 5% Development Fund (Foundation-Governed)I echo Chris's thoughts here and strongly support this.
Thanks for putting this together Eric.
Y.
On Wed, Sep 24, 2025 at 4:42 PM Chris Matturri <chris@...> wrote:
Thank you for sharing this Eric,
Proof Group strongly supports this and is happy to be an endorser for this CIP.
While a lot of work needs to be done in another CIP to hammer out more of the specifics, directionally this makes a ton of sense. For context other ecosystems have +40-50% ecosystem funds that help bootstrap their contributors. Canton's decentralized/ no-premine launch means much of this is covered by contributors at a loss for the greater good of the network. Over time it makes sense to introduce a small ecosystem fund to help fund some of this.
On Wed, Sep 24, 2025 at 3:36 PM DrAmandaLMartin via lists.sync.global <amartin=linuxfoundation.org@...> wrote:
Please see CIP below open for discussion. Feel free to reach out if you have questions!
Title: Establish a 5% Development Fund (Foundation-Governed)
Author(s): Eric Saraniecki
Type: Governance
Abstract
This CIP ratifies the creation of a Development Fund equal to 5% of all future CC mint emissions, allocated to a Foundation-governed Fund. The Fund exists to sustain long-term investment in the Canton protocol (core R&D, dev tools, security, audits, reference implementations, DeFi app(s) liquidity seeding, critical infra). The fund is prospective (no retroactive allocation) and is taken pro-rata from all issuance streams so that every pool contributes, reflecting that everyone benefits from protocol investment.
A subsequent CIP will propose the implementation mechanics (addresses, start epoch/height, accounting hooks, spend process, guardrails).
Motivation
Many networks finance protocol growth initiatives via a premine/treasury. Canton was fair-launched, so there is no large premine to draw from. Meanwhile, protocol improvements are public goods: security upgrades, performance work, and core features accrue to all participants (validators, builders, venues, users).
Two commonly suggested alternatives are (a) a mega Super Validator (SV) or (b) ad-hoc grants. A single large SV dilutes the SV pool and decays quickly, undermining funding sustainability. Ad-hoc grants lack predictability and are fragile to market cycles.
A reasonably sized fund (5%) creates durable, programmatic funding without changing the overall issuance schedule—reallocating, not inflating beyond plan—and ensures all pools contribute to a shared public good.
The Foundation, with its current SV Weight of 10 and approximately 1.5 billion CC in its treasury, faces significant expenses as it bootstraps the ecosystem. These costs will deplete a substantial portion of its funds. Furthermore, the value of an SV is subject to decay due to the expansion of the SV pool and upcoming halvings. Therefore, it is crucial to establish a sustainable funding source that can support the network's long-term objectives.
Specification
#
Decision
Scope / What Must Be True
Parameter / Target
Notes & Acceptance
S1
Establish Development Fund
A Foundation-controlled Development Fund is recognized as the canonical sink for the fund; custody and signers per Foundation bylaws.
One primary on-chain address
Activation contingent on subsequent CIP specifying address, custody, and accounting hooks.
S2
Fund Rate
Fund applies to all future mint emissions (prospective only).
5% of each mint event.
No retroactive allocation. Does not change total planned issuance—reallocation only.
S3
Source of Funds
Fund is taken pro-rata from all issuance streams (validators/SVs, ecosystem, other pools).
Pro-rata reduction to each stream equal to 5% of its otherwise-due amount.
Ensures “everyone contributes” because everyone benefits. Avoids concentrating dilution solely in the SV pool.
S4
Governance of Spend
Foundation administers and allocates funds. Community participation occurs via Foundation processes.
Foundation governance; processes to be defined and refined by the Foundation.
Subsequent CIP must detail spend workflows, disclosures, conflicts policy, and appeals.
S5
Transparency & Reporting
Foundation publishes quarterly reports (receipts, balances, commitments, disbursements, outcomes) and annual audit/attestation.
Quarterly ops report; annual independent attestation.
First report due ≤90 days after first receipt of funds.
S6
Sunset / Review
Formal review of fund effectiveness and rate.
Every 12 months.
Review may propose rate change or wind-down via new CIP.
S7
Migrate code repositories
This CIP ratifies the decision to move the Splice, Daml, and Canton code repositories to a Foundation controlled repo
As soon as practical
Relying on setting up the appropriate infrastructure at the Canton Foundation and governance to take over those processes from LFDT and DA
Rationale
When Canton launched, it was believed the Foundation’s SV would be sufficient to fund core needs. In practice, once you include grants, listings, and forward protocol development, SV emissions alone are not sufficient—and we don’t want funding gaps to slow or prevent critical work. This request is about establishing a predictable, programmatic base for protocol investment before we expand grants and other ecosystem-growth activities.
-
Why a fund, not an SV?
A single, large SV concentrates dilution on the validator pool and decays—producing a front-loaded stream that undermines long-term sustainability. A thin slice over all mints is lighter-touch, fairer across stakeholders, and predictable.
-
Why Foundation-governed?
The Foundation includes members beyond SVs and has a mandate to run open processes (RFPs, grants, audits). Protocol work is a public good; the spending venue should be broader than validator governance alone.
-
Why 5%?
Small enough to maintain competitive validator economics, large enough to reliably fund core protocol work across cycles. It is also simple to communicate and implement.
Alternatives Considered
-
Large Super Validator: Simple to reason about, but centralized, rapidly decaying, and disproportionately dilutive to SVs.
-
Ad-hoc Grants / Donations: Unreliable over market cycles; fails the predictability and sustainability tests.
-
One-time “treasury mint”: Creates retroactive inflation and governance contention; lacks ongoing alignment between protocol growth and funding.
Economic Impact
-
No change to total issuance—this is a reallocation of 5% of each future mint.
-
Uniform, predictable dilution across all issuance streams.
-
Expected to increase long-run network value via sustained investment in security, performance, and core features—benefiting validators, builders, and users.
Backwards Compatibility
Prospective only. No retroactive reallocation. Existing balances and historical distributions are unaffected.
Security Considerations
-
Fund custody/operations must follow Foundation controls.
-
Concentration risk is mitigated by reporting, audits, and periodic review (S7).
-
- toggle quoted message Show quoted text
7RIDGE/C7 is also in favour of the concept of a % of all coins minted to go to the development fund.
Veronica
V E R O N I C A A U G U S T S S O N / P A R T N E R
7RIDGE IS A PRIVATE MARKETS ASSET MANAGER INVESTED IN TRANSFORMATIVE TECHNOLOGY FOR FINANCIAL SERVICES TO POWER THE GLOBAL ECONOMY Signature for V e r o n i c a A u g u s t s s o n From: cip-discuss@... <cip-discuss@...> On Behalf Of Kinga Bosse via lists.sync.global
Sent: Thursday, 25 September 2025 02:55
To: cip-discuss@...
Subject: Re: [cip-discuss] CIP-XXXX: Establish a 5% Development Fund (Foundation-Governed)MPCH is also in favor. Thank you!
Get Outlook for iOS
From: cip-discuss@... <cip-discuss@...> on behalf of Yiannis Varelas via lists.sync.global <y=fivenorth.io@...>
Sent: Wednesday, September 24, 2025 8:43:18 PM
To: cip-discuss@... <cip-discuss@...>
Subject: Re: [cip-discuss] CIP-XXXX: Establish a 5% Development Fund (Foundation-Governed)I echo Chris's thoughts here and strongly support this.
Thanks for putting this together Eric.
Y.On Wed, Sep 24, 2025 at 4:42 PM Chris Matturri <chris@...> wrote:
Thank you for sharing this Eric,
Proof Group strongly supports this and is happy to be an endorser for this CIP.
While a lot of work needs to be done in another CIP to hammer out more of the specifics, directionally this makes a ton of sense. For context other ecosystems have +40-50% ecosystem funds that help bootstrap their contributors. Canton's decentralized/ no-premine launch means much of this is covered by contributors at a loss for the greater good of the network. Over time it makes sense to introduce a small ecosystem fund to help fund some of this.
On Wed, Sep 24, 2025 at 3:36 PM DrAmandaLMartin via lists.sync.global <amartin=linuxfoundation.org@...> wrote:
Please see CIP below open for discussion. Feel free to reach out if you have questions!
Title: Establish a 5% Development Fund (Foundation-Governed)
Author(s): Eric Saraniecki
Type: Governance
Abstract
This CIP ratifies the creation of a Development Fund equal to 5% of all future CC mint emissions, allocated to a Foundation-governed Fund. The Fund exists to sustain long-term investment in the Canton protocol (core R&D, dev tools, security, audits, reference implementations, DeFi app(s) liquidity seeding, critical infra). The fund is prospective (no retroactive allocation) and is taken pro-rata from all issuance streams so that every pool contributes, reflecting that everyone benefits from protocol investment.
A subsequent CIP will propose the implementation mechanics (addresses, start epoch/height, accounting hooks, spend process, guardrails).
Motivation
Many networks finance protocol growth initiatives via a premine/treasury. Canton was fair-launched, so there is no large premine to draw from. Meanwhile, protocol improvements are public goods: security upgrades, performance work, and core features accrue to all participants (validators, builders, venues, users).
Two commonly suggested alternatives are (a) a mega Super Validator (SV) or (b) ad-hoc grants. A single large SV dilutes the SV pool and decays quickly, undermining funding sustainability. Ad-hoc grants lack predictability and are fragile to market cycles.
A reasonably sized fund (5%) creates durable, programmatic funding without changing the overall issuance schedule—reallocating, not inflating beyond plan—and ensures all pools contribute to a shared public good.
The Foundation, with its current SV Weight of 10 and approximately 1.5 billion CC in its treasury, faces significant expenses as it bootstraps the ecosystem. These costs will deplete a substantial portion of its funds. Furthermore, the value of an SV is subject to decay due to the expansion of the SV pool and upcoming halvings. Therefore, it is crucial to establish a sustainable funding source that can support the network's long-term objectives.
Specification
#
Decision
Scope / What Must Be True
Parameter / Target
Notes & Acceptance
S1
Establish Development Fund
A Foundation-controlled Development Fund is recognized as the canonical sink for the fund; custody and signers per Foundation bylaws.
One primary on-chain address
Activation contingent on subsequent CIP specifying address, custody, and accounting hooks.
S2
Fund Rate
Fund applies to all future mint emissions (prospective only).
5% of each mint event.
No retroactive allocation. Does not change total planned issuance—reallocation only.
S3
Source of Funds
Fund is taken pro-rata from all issuance streams (validators/SVs, ecosystem, other pools).
Pro-rata reduction to each stream equal to 5% of its otherwise-due amount.
Ensures “everyone contributes” because everyone benefits. Avoids concentrating dilution solely in the SV pool.
S4
Governance of Spend
Foundation administers and allocates funds. Community participation occurs via Foundation processes.
Foundation governance; processes to be defined and refined by the Foundation.
Subsequent CIP must detail spend workflows, disclosures, conflicts policy, and appeals.
S5
Transparency & Reporting
Foundation publishes quarterly reports (receipts, balances, commitments, disbursements, outcomes) and annual audit/attestation.
Quarterly ops report; annual independent attestation.
First report due ≤90 days after first receipt of funds.
S6
Sunset / Review
Formal review of fund effectiveness and rate.
Every 12 months.
Review may propose rate change or wind-down via new CIP.
S7
Migrate code repositories
This CIP ratifies the decision to move the Splice, Daml, and Canton code repositories to a Foundation controlled repo
As soon as practical
Relying on setting up the appropriate infrastructure at the Canton Foundation and governance to take over those processes from LFDT and DA
Rationale
When Canton launched, it was believed the Foundation’s SV would be sufficient to fund core needs. In practice, once you include grants, listings, and forward protocol development, SV emissions alone are not sufficient—and we don’t want funding gaps to slow or prevent critical work. This request is about establishing a predictable, programmatic base for protocol investment before we expand grants and other ecosystem-growth activities.
-
Why a fund, not an SV?
A single, large SV concentrates dilution on the validator pool and decays—producing a front-loaded stream that undermines long-term sustainability. A thin slice over all mints is lighter-touch, fairer across stakeholders, and predictable.
-
Why Foundation-governed?
The Foundation includes members beyond SVs and has a mandate to run open processes (RFPs, grants, audits). Protocol work is a public good; the spending venue should be broader than validator governance alone.
-
Why 5%?
Small enough to maintain competitive validator economics, large enough to reliably fund core protocol work across cycles. It is also simple to communicate and implement.
Alternatives Considered
-
Large Super Validator: Simple to reason about, but centralized, rapidly decaying, and disproportionately dilutive to SVs.
-
Ad-hoc Grants / Donations: Unreliable over market cycles; fails the predictability and sustainability tests.
-
One-time “treasury mint”: Creates retroactive inflation and governance contention; lacks ongoing alignment between protocol
growth and funding.
Economic Impact
-
No change to total issuance—this is a
reallocation of 5% of each future mint.
-
Uniform, predictable dilution across all issuance streams.
-
Expected to increase long-run network value via sustained investment in security, performance, and core features—benefiting validators, builders, and users.
Backwards Compatibility
Prospective only. No retroactive reallocation. Existing balances and historical distributions are unaffected.
Security Considerations
-
Fund custody/operations must follow Foundation controls.
- Concentration risk is mitigated by reporting, audits, and periodic review (S7).
-
Why a fund, not an SV?
- toggle quoted message Show quoted text
Cumberland DRW votes in favor.
From: cip-discuss@... <cip-discuss@...> On Behalf Of Kinga Bosse via lists.sync.global
Sent: Wednesday, September 24, 2025 7:55 PM
To: cip-discuss@...
Subject: [ext] Re: [cip-discuss] CIP-XXXX: Establish a 5% Development Fund (Foundation-Governed)MPCH is also in favor. Thank you! Get Outlook for iOS From: cip-discuss@ lists. sync. global <cip-discuss@ lists. sync. global> on behalf of Yiannis Varelas via lists. sync. global <y=fivenorth. io@ lists. sync. global> Sent: Wednesday, September
MPCH is also in favor. Thank you!
Get Outlook for iOS
From: cip-discuss@... <cip-discuss@...> on behalf of Yiannis Varelas via lists.sync.global <y=fivenorth.io@...>
Sent: Wednesday, September 24, 2025 8:43:18 PM
To: cip-discuss@... <cip-discuss@...>
Subject: Re: [cip-discuss] CIP-XXXX: Establish a 5% Development Fund (Foundation-Governed)I echo Chris's thoughts here and strongly support this.
Thanks for putting this together Eric.
Y.On Wed, Sep 24, 2025 at 4:42 PM Chris Matturri <chris@...> wrote:
Thank you for sharing this Eric,
Proof Group strongly supports this and is happy to be an endorser for this CIP.
While a lot of work needs to be done in another CIP to hammer out more of the specifics, directionally this makes a ton of sense. For context other ecosystems have +40-50% ecosystem funds that help bootstrap their contributors. Canton's decentralized/ no-premine launch means much of this is covered by contributors at a loss for the greater good of the network. Over time it makes sense to introduce a small ecosystem fund to help fund some of this.
On Wed, Sep 24, 2025 at 3:36 PM DrAmandaLMartin via lists.sync.global <amartin=linuxfoundation.org@...> wrote:
Please see CIP below open for discussion. Feel free to reach out if you have questions!
Title: Establish a 5% Development Fund (Foundation-Governed)
Author(s): Eric Saraniecki
Type: Governance
Abstract
This CIP ratifies the creation of a Development Fund equal to 5% of all future CC mint emissions, allocated to a Foundation-governed Fund. The Fund exists to sustain long-term investment in the Canton protocol (core R&D, dev tools, security, audits, reference implementations, DeFi app(s) liquidity seeding, critical infra). The fund is prospective (no retroactive allocation) and is taken pro-rata from all issuance streams so that every pool contributes, reflecting that everyone benefits from protocol investment.
A subsequent CIP will propose the implementation mechanics (addresses, start epoch/height, accounting hooks, spend process, guardrails).
Motivation
Many networks finance protocol growth initiatives via a premine/treasury. Canton was fair-launched, so there is no large premine to draw from. Meanwhile, protocol improvements are public goods: security upgrades, performance work, and core features accrue to all participants (validators, builders, venues, users).
Two commonly suggested alternatives are (a) a mega Super Validator (SV) or (b) ad-hoc grants. A single large SV dilutes the SV pool and decays quickly, undermining funding sustainability. Ad-hoc grants lack predictability and are fragile to market cycles.
A reasonably sized fund (5%) creates durable, programmatic funding without changing the overall issuance schedule—reallocating, not inflating beyond plan—and ensures all pools contribute to a shared public good.
The Foundation, with its current SV Weight of 10 and approximately 1.5 billion CC in its treasury, faces significant expenses as it bootstraps the ecosystem. These costs will deplete a substantial portion of its funds. Furthermore, the value of an SV is subject to decay due to the expansion of the SV pool and upcoming halvings. Therefore, it is crucial to establish a sustainable funding source that can support the network's long-term objectives.
Specification
#
Decision
Scope / What Must Be True
Parameter / Target
Notes & Acceptance
S1
Establish Development Fund
A Foundation-controlled Development Fund is recognized as the canonical sink for the fund; custody and signers per Foundation bylaws.
One primary on-chain address
Activation contingent on subsequent CIP specifying address, custody, and accounting hooks.
S2
Fund Rate
Fund applies to all future mint emissions (prospective only).
5% of each mint event.
No retroactive allocation. Does not change total planned issuance—reallocation only.
S3
Source of Funds
Fund is taken pro-rata from all issuance streams (validators/SVs, ecosystem, other pools).
Pro-rata reduction to each stream equal to 5% of its otherwise-due amount.
Ensures “everyone contributes” because everyone benefits. Avoids concentrating dilution solely in the SV pool.
S4
Governance of Spend
Foundation administers and allocates funds. Community participation occurs via Foundation processes.
Foundation governance; processes to be defined and refined by the Foundation.
Subsequent CIP must detail spend workflows, disclosures, conflicts policy, and appeals.
S5
Transparency & Reporting
Foundation publishes quarterly reports (receipts, balances, commitments, disbursements, outcomes) and annual audit/attestation.
Quarterly ops report; annual independent attestation.
First report due ≤90 days after first receipt of funds.
S6
Sunset / Review
Formal review of fund effectiveness and rate.
Every 12 months.
Review may propose rate change or wind-down via new CIP.
S7
Migrate code repositories
This CIP ratifies the decision to move the Splice, Daml, and Canton code repositories to a Foundation controlled repo
As soon as practical
Relying on setting up the appropriate infrastructure at the Canton Foundation and governance to take over those processes from LFDT and DA
Rationale
When Canton launched, it was believed the Foundation’s SV would be sufficient to fund core needs. In practice, once you include grants, listings, and forward protocol development, SV emissions alone are not sufficient—and we don’t want funding gaps to slow or prevent critical work. This request is about establishing a predictable, programmatic base for protocol investment before we expand grants and other ecosystem-growth activities.
-
Why a fund, not an SV?
A single, large SV concentrates dilution on the validator pool and decays—producing a front-loaded stream that undermines long-term sustainability. A thin slice over all mints is lighter-touch, fairer across stakeholders, and predictable.
-
Why Foundation-governed?
The Foundation includes members beyond SVs and has a mandate to run open processes (RFPs, grants, audits). Protocol work is a public good; the spending venue should be broader than validator governance alone.
-
Why 5%?
Small enough to maintain competitive validator economics, large enough to reliably fund core protocol work across cycles. It is also simple to communicate and implement.
Alternatives Considered
-
Large Super Validator: Simple to reason about, but centralized, rapidly decaying, and disproportionately dilutive to SVs.
-
Ad-hoc Grants / Donations: Unreliable over market cycles; fails the predictability and sustainability tests.
-
One-time “treasury mint”: Creates retroactive inflation and governance contention; lacks ongoing alignment between protocol growth and funding.
Economic Impact
-
No change to total issuance—this is a
reallocation of 5% of each future mint.
-
Uniform, predictable dilution across all issuance streams.
-
Expected to increase long-run network value via sustained investment in security, performance, and core features—benefiting validators, builders, and users.
Backwards Compatibility
Prospective only. No retroactive reallocation. Existing balances and historical distributions are unaffected.
Security Considerations
-
Fund custody/operations must follow Foundation controls.
- Concentration risk is mitigated by reporting, audits, and periodic review (S7).
This e-mail and any attachments may contain information that is confidential and proprietary and otherwise protected from disclosure. If you are not the intended recipient of this e-mail, do not read, duplicate or redistribute it by any means. Please immediately delete it and any attachments and notify the sender that you have received it by mistake. Unintended recipients are prohibited from taking action on the basis of information in this e-mail or any attachments. The DRW Companies make no representations that this e-mail or any attachments are free of computer viruses or other defects.
-
Why a fund, not an SV?
- toggle quoted message Show quoted textTradeweb votes in favor.
From: cip-discuss@... <cip-discuss@...> on behalf of: Chris Zuehlke via lists.sync.global <czuehlke=drwholdings.com@...>Date: Friday, Sep 26, 2025 at 3:38 PMTo: cip-discuss@... <cip-discuss@...>Subject: Re: [cip-discuss] CIP-XXXX: Establish a 5% Development Fund (Foundation-Governed)
CAUTION:This email originated from outside of Tradeweb. Do not open attachments or click on links if you do not recognize the sender or if the content appears unsafe/you cannot verify the content is safe.
Cumberland DRW votes in favor.
From: cip-discuss@... <cip-discuss@...> On Behalf Of Kinga Bosse via lists.sync.global
Sent: Wednesday, September 24, 2025 7:55 PM
To: cip-discuss@...
Subject: [ext] Re: [cip-discuss] CIP-XXXX: Establish a 5% Development Fund (Foundation-Governed)MPCH is also in favor. Thank you! Get Outlook for iOS From: cip-discuss@ lists. sync. global <cip-discuss@ lists. sync. global> on behalf of Yiannis Varelas via lists. sync. global <y=fivenorth. io@ lists. sync. global> Sent: Wednesday, September
MPCH is also in favor. Thank you!
Get Outlook for iOS
From: cip-discuss@... <cip-discuss@...> on behalf of Yiannis Varelas via lists.sync.global <y=fivenorth.io@...>
Sent: Wednesday, September 24, 2025 8:43:18 PM
To: cip-discuss@... <cip-discuss@...>
Subject: Re: [cip-discuss] CIP-XXXX: Establish a 5% Development Fund (Foundation-Governed)I echo Chris's thoughts here and strongly support this.
Thanks for putting this together Eric.
Y.On Wed, Sep 24, 2025 at 4:42 PM Chris Matturri <chris@...> wrote:
Thank you for sharing this Eric,
Proof Group strongly supports this and is happy to be an endorser for this CIP.
While a lot of work needs to be done in another CIP to hammer out more of the specifics, directionally this makes a ton of sense. For context other ecosystems have +40-50% ecosystem funds that help bootstrap their contributors. Canton's decentralized/ no-premine launch means much of this is covered by contributors at a loss for the greater good of the network. Over time it makes sense to introduce a small ecosystem fund to help fund some of this.
On Wed, Sep 24, 2025 at 3:36 PM DrAmandaLMartin via lists.sync.global <amartin=linuxfoundation.org@...> wrote:
Please see CIP below open for discussion. Feel free to reach out if you have questions!
Title: Establish a 5% Development Fund (Foundation-Governed)
Author(s): Eric Saraniecki
Type: Governance
Abstract
This CIP ratifies the creation of a Development Fund equal to 5% of all future CC mint emissions, allocated to a Foundation-governed Fund. The Fund exists to sustain long-term investment in the Canton protocol (core R&D, dev tools, security, audits, reference implementations, DeFi app(s) liquidity seeding, critical infra). The fund is prospective (no retroactive allocation) and is taken pro-rata from all issuance streams so that every pool contributes, reflecting that everyone benefits from protocol investment.
A subsequent CIP will propose the implementation mechanics (addresses, start epoch/height, accounting hooks, spend process, guardrails).
Motivation
Many networks finance protocol growth initiatives via a premine/treasury. Canton was fair-launched, so there is no large premine to draw from. Meanwhile, protocol improvements are public goods: security upgrades, performance work, and core features accrue to all participants (validators, builders, venues, users).
Two commonly suggested alternatives are (a) a mega Super Validator (SV) or (b) ad-hoc grants. A single large SV dilutes the SV pool and decays quickly, undermining funding sustainability. Ad-hoc grants lack predictability and are fragile to market cycles.
A reasonably sized fund (5%) creates durable, programmatic funding without changing the overall issuance schedule—reallocating, not inflating beyond plan—and ensures all pools contribute to a shared public good.
The Foundation, with its current SV Weight of 10 and approximately 1.5 billion CC in its treasury, faces significant expenses as it bootstraps the ecosystem. These costs will deplete a substantial portion of its funds. Furthermore, the value of an SV is subject to decay due to the expansion of the SV pool and upcoming halvings. Therefore, it is crucial to establish a sustainable funding source that can support the network's long-term objectives.
Specification
#
Decision
Scope / What Must Be True
Parameter / Target
Notes & Acceptance
S1
Establish Development Fund
A Foundation-controlled Development Fund is recognized as the canonical sink for the fund; custody and signers per Foundation bylaws.
One primary on-chain address
Activation contingent on subsequent CIP specifying address, custody, and accounting hooks.
S2
Fund Rate
Fund applies to all future mint emissions (prospective only).
5% of each mint event.
No retroactive allocation. Does not change total planned issuance—reallocation only.
S3
Source of Funds
Fund is taken pro-rata from all issuance streams (validators/SVs, ecosystem, other pools).
Pro-rata reduction to each stream equal to 5% of its otherwise-due amount.
Ensures “everyone contributes” because everyone benefits. Avoids concentrating dilution solely in the SV pool.
S4
Governance of Spend
Foundation administers and allocates funds. Community participation occurs via Foundation processes.
Foundation governance; processes to be defined and refined by the Foundation.
Subsequent CIP must detail spend workflows, disclosures, conflicts policy, and appeals.
S5
Transparency & Reporting
Foundation publishes quarterly reports (receipts, balances, commitments, disbursements, outcomes) and annual audit/attestation.
Quarterly ops report; annual independent attestation.
First report due ≤90 days after first receipt of funds.
S6
Sunset / Review
Formal review of fund effectiveness and rate.
Every 12 months.
Review may propose rate change or wind-down via new CIP.
S7
Migrate code repositories
This CIP ratifies the decision to move the Splice, Daml, and Canton code repositories to a Foundation controlled repo
As soon as practical
Relying on setting up the appropriate infrastructure at the Canton Foundation and governance to take over those processes from LFDT and DA
Rationale
When Canton launched, it was believed the Foundation’s SV would be sufficient to fund core needs. In practice, once you include grants, listings, and forward protocol development, SV emissions alone are not sufficient—and we don’t want funding gaps to slow or prevent critical work. This request is about establishing a predictable, programmatic base for protocol investment before we expand grants and other ecosystem-growth activities.
-
Why a fund, not an SV?
A single, large SV concentrates dilution on the validator pool and decays—producing a front-loaded stream that undermines long-term sustainability. A thin slice over all mints is lighter-touch, fairer across stakeholders, and predictable.
-
Why Foundation-governed?
The Foundation includes members beyond SVs and has a mandate to run open processes (RFPs, grants, audits). Protocol work is a public good; the spending venue should be broader than validator governance alone.
-
Why 5%?
Small enough to maintain competitive validator economics, large enough to reliably fund core protocol work across cycles. It is also simple to communicate and implement.
Alternatives Considered
-
Large Super Validator: Simple to reason about, but centralized, rapidly decaying, and disproportionately dilutive to SVs.
-
Ad-hoc Grants / Donations: Unreliable over market cycles; fails the predictability and sustainability tests.
-
One-time “treasury mint”: Creates retroactive inflation and governance contention; lacks ongoing alignment between protocol growth and funding.
Economic Impact
-
No change to total issuance—this is a
reallocation of 5% of each future mint.
-
Uniform, predictable dilution across all issuance streams.
-
Expected to increase long-run network value via sustained investment in security, performance, and core features—benefiting validators, builders, and users.
Backwards Compatibility
Prospective only. No retroactive reallocation. Existing balances and historical distributions are unaffected.
Security Considerations
-
Fund custody/operations must follow Foundation controls.
- Concentration risk is mitigated by reporting, audits, and periodic review (S7).
This e-mail and any attachments may contain information that is confidential and proprietary and otherwise protected from disclosure. If you are not the intended recipient of this e-mail, do not read, duplicate or redistribute it by any means. Please immediately delete it and any attachments and notify the sender that you have received it by mistake. Unintended recipients are prohibited from taking action on the basis of information in this e-mail or any attachments. The DRW Companies make no representations that this e-mail or any attachments are free of computer viruses or other defects.
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Why a fund, not an SV?
