Catalyze
SNS Whitepaper

Tokenomics

The Catalyze SNS token launch aims to distribute the token to users and support the development and marketing of the dAPP for the next 18-24 months. The application has sufficient time to garner users and traction during this period. Iteratively perfect the feature suite through community proposals, the founding team’s leadership, and iterative testing in the market. The aim is to acquire communities; and through communities, users, and fans of the software.

The token allocation quanta are listed in the table below. The total quantum of tokens for distribution is 500,000,000. Most tokens are allocated to the SNS Launch and the Community Treasury (51%). The remaining tokens are split between the Founding Team, Seed Investors, and the SNS Raise. Catalyze will utilize the SNS proposal process to support airdrops for early supporters, groups, and projects as part of its tokenomics model.

A caveat is that the Community Treasury (CT) is divided into sub-accounts for each category: User Incentives, Users Perks, DAO Community Grants, DAO Treasury Grants, and Reserves. The proposed allocation is that 31% of the CT is allocated to reserves, and the remaining 20% is split equally (5% each) between the categories below. The reserve allocation is then nominally available to fund application development through proposals and any marketing campaigns that the DAO may undertake.

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Neuron Structure

Our decentralize sale is structured as follows:
Participants will receive their tokens in a basket of 7 neurons with dissolve delays of 0, 2, 4, 6, 8, 10 and 12 months respectively.

The Catalyze Developer Organisation will receive its tokens in a basket of 4 neurons each with a dissolve delay of one month, but with vesting periods of 1, 2, 3, and 4 years.

Seed investors and Catalyze NFT holders will receive 3 neurons each with a dissolve delay of one month but with vesting periods of 0, 1 and 2 years respectively.

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Governance

The minimum amount a neuron will need to stake in order to vote is 4 SNS tokens, with a staking minimum staking period to vote of 1 month.

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Rewards

Voting rewards are initially 5% of SNS tokens minted annually with a gradual reduction to 1.5% after 5 years.

⁃ Max neuron age for age bonus 6 months
⁃ Age bonus multiplier 1.25x
⁃ Dissolve delay bonus multiplier 2.5  
⁃ Max dissolve delay 2 years

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User Incentives

An engage-to-earn model has been developed to grow the user base whereby users could create a presence as content creators, moderators, and contributors to various DAOs. This model relies on building a user reputation system based on the value of their actions within a community forum.

For example, a user that makes a daily contribution to a given channel and who is responsive to other users; is assigned a contributor role (via an NFT) and based on their contribution levels over some period (e.g., when the community is growing) can claim from a token rewards pool.
Rewards are allocated daily to users through a claims mechanism:

• A daily claims pool is created.
• Funds are transferred into the pool automatically.
• A map exists between the “pseudo-currency of reputation points earned and tokens in the pool.

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Notice that an arbitrary number of reputation points can map proportionally to a finite token allocation daily.

The SNS reward functionality can create daily allocation pools over four years to get the application to a suitable number of users.

The role of the Catalyze DAO here is to decide where the incentives are allocated, so there can be some class of proposals relating to user incentives. For example, the incentives are distributed to affiliate marketers only. In that case, people that refer other people to the app through referral systems will obtain reputation points and be able to convert them into tokens.

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User Perks

Suppose users can earn tokens through their behavior on the application, where the behavior helps the DAO. In that case, the question is how users can use these tokens on the application. There are several options.

• Burn to Boost. Boosting is the model used by Discord to increase the ability of users to make their servers more exciting and increase their access to the application. Arguably, Discord doesn’t have the most fantastic UX/UI interfaces. Still, this model seems to work to get community members to improve their servers and increase their “special abilities.” Using a burn-to-boost model, a user would permanently burn some Catalyze governance tokens to get a permanent perk on a particular server.
A back-of-the-envelope calculation can show how effective this model can be from a token holder perspective since there is a permanent reduction in supply. Suppose there are 5000 active groups (the Catalyze equivalent of a server) with an average of 50 active users per group. A burn-to-boost rate that averages 0.50 tokens per month per active user per group (or 25 tokens per group per month) will burn 125,000 tokens monthly, or 1.5 million tokens per year. This is equivalent to 0.3% of the total token supply, which can quickly scale as the number of groups, users, and boosted servers increases.
• Stake to Boost. Here, the premise is similar, but the user would lock the tokens up for a set period to unlock some right, privilege, or feature within the application. For example, a DAO that wants to use a particular tool feature (from, say, a feature market) would have to lock up tokens to get access to that feature.
• Pay to Boost. Following on from the previous setup. If the Catalyze DAO decides to open Catalyze for user-generated plugins, some payment functionality via the governance tokens is required. In this case, a user or DAO would pay a third party from a plugin, and the Catalyze feature marketplace would take a transaction fee; that either goes into a future incentives fund

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Catalyze may require some combination of the above functions as a pricing system for in-app extras.

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DAO Community Grants

The goal of Catalyze in the near term is to support the launch of multiple DAOs through the application. In turn, a portion of the Catalyze economy is allocated toward a grants program for developing DAOs; and using DAOs as a strategic vehicle for building the broader catalyze community. 10% of the Community Treasury allocated to grants for early DAO and community creation on Catalyze.

For example, Alice and Bob want to create the Decentralized Poetry Society; they apply for a grant through the Catalyze DAO creator tool. They get some initial support, with clear milestones and deliverables: including a payment structure for community size and free use of various DAO tooling. Using their network, they build up a community of members on the Catalyze application. Eventually, members contribute poems as NFTs; and there is a poetry publication model. Through Catalyze, they are introduced to Charlie’s Coding DAO, which supports them in creating their marketplace for Poetry self-publication on DFINITY. In turn, both projects attract users to the platform and into the broader ecosystem.

In summary, the goals are as follows:

• Create Win-Wins
• Create synergies between early communities.
• Support the overall growth of the broader DFINITY ecosystem.
• Use the DFINITY infrastructure to provide an open-permissionless environment for creators, builders, and the community.
• Manage the grants program through a DAO.

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DAO Technology Grants

Technology has a fundamental role in protecting privacy, data, and democracy. Catalyze is a communications tool, and privacy of communication is an important consideration. In this regard, developing techniques and leveraging cryptography, using DFINITY’s architecture, will be an essential narrative within the application. This supports allocating the DAOs resources toward technology integration and privacy tooling within the Catalyze application.

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Summary

At a high-level view, the ICP raise for the creation of the Catalyze DAO has the following parameters. Note (1): We are open to a lesser investment from the Community Fund (should the SNS raise come in at the lower end of the range) to preserve proper balance between CF investment and individual SNS token buyers. Note (2): Given current market conditions and SEC lawsuits, which could impact ICP directly, we have raised our ICP raise levels to reflect Token emissions and burning are highlighted below.

Vote

The neuron dissolve delay is 2 years: This is to assist the DAO in negotiating the first two years where the project is most vulnerable. Users whose tokens are staked with a longer dissolve delay receive an additional bonus voting multiplier.

SNS Token Reward Release Rates

The initial reward rate is set at 5% and the final reward rate is set at 1.5% the reward rate transitions quadratically according to the SNS rules to the final rate over a period of 5 years. Here the decline is slow and steady to just under two-thirds of the initial rate in order to have a gradual release of tokens.

For a detailed view of the SNS token sale dynamics, please see the see the spreadsheet here which was last updated on 01/06/2023

ICP Raise Allocation

Catalyze was initially developed with a decentralization roadmap in place, so that the app can serve an open ecosystem and be DAO governed. This goes back to its roots as WeACT which was focussed on supporting activist communities. That said, the operating company and developers have a fair way to go in order to complete the app’s feature suite and make it fully usable and marketable as a premier Web3 communication tool.

In order to achieve these goals; 25% of the ICP raised has been set aside for developer costs with a further 15% set aside for Swiss foundation launch/legal fees (Operations), marketing, and growth purposes. This serves application development, and drives growth both for Catalyze and DFINITY at large. The remaining 60% is allocated to the DAO treasury.

Catalyze will then be required to submit a detailed activity report and operations budget every quarter to the Catalyze DAO.

The graph above represents the proposed distribution of funds for the first year.