Activate Token Launch Standards | ConsenSys Codefi

Promoting Standards For The Next Generation of Network Launches

Our Principles

With Activate, we strive to adopt a standards-based approach to create robust and inclusive token ecosystems in the blockchain-native Web 3.0 economy. Our standards are driven by core principles that serve as a north star when launching, supporting, and enabling decentralized networks:

1. Establish Fair, Accountable, and Transparent Practices
2. Enable the Networks of Tomorrow to Decentralize
3. Foster Innovation in Token Distribution Mechanisms
4. Increase Participation to Accelerate Network Effects

The Brooklyn Project

In November 2017, the Brooklyn Project announced an open-source initiative that mobilized a 1,000+ member community to develop the Consumer Token Framework . The framework represented a first step towards establishing global standards for utility tokens. Utility tokens are digital representations of access, participation, and exchange rights in a decentralized token economy.

The Brooklyn Project has focused its attention on the sale and distribution methods associated with these tokens to address potential market-failures, as well as the legal and regulatory ambiguity that decentralized projects entail.

Building on the great work done by the Brooklyn Project, Activate has developed its own set of Token Launch Standards to serve as an adaptable framework reflecting recent advancements in the space.

To Whom Do These Standards Apply?

There are several actors involved in a Token Launch, all of which have a set of individual standards that are aligned with the Activate core principles.

• Activate Platform — We are committed to transparent codes of conduct that actively promote participation, innovation, and education for the global blockchain community.
• Launch Participants — Users who intend to purchase, claim, and demonstrate active use of their tokens in a decentralized network.
• Launch Partners — “Vetted” decentralized networks passionate about participation wishing to launch their native token in a distributed, fair and responsible manner upon mainnet launch.

The intended purpose of our Token Launch Standards is to ensure qualified networks are launched and accessible in a transparent and fair manner. This will accelerate global blockchain adoption and educate the participants of tomorrow’s decentralized economy.

Activate Platform Standards

Launch Partners Must Support the Ethereum Ecosystem

The Activate Platform will only support partners building networks to advance the development of the Ethereum ecosystem.

Launch Partners Are Subject To Due Diligence

Before supporting a Network Partner, Activate conducts a diligence process that includes a thorough evaluation of the maturity of the underlying network technology, the experience of the core development team, incentive mechanism design, network governance, and the protocols reputation in the industry.

Registration is Open to Everyone

Registration to participate in a network launch is open to anyone who successfully verifies their ID and completes a protocol-specific questionnaire.

Tokens Must be Distributed in a Fair and Uniform Manner

All Network Launches will include a uniform and equitable approach to token distribution and pricing (where applicable) across participants irrespective of their status or contribution level.

Every Network Launch Must Include “Proof of Use”

Proof of Use is a programmable distributive mechanism, which requires all users who purchase or claim tokens through Activate to actively use them on the live mainnet of the network before they are able to use them for alternative purposes. It is required that all tokens are ‘Non-Transferable’ or ‘Non-Redeemable’ until Proof of Use requirements are met.

Tokens Must Be ‘Locked Until Mainnet’

Upon successful completion of a Network Launch, tokens remain locked until they have utility functionality on Mainnet.

Launch Participant Standards

Launch Participants Must Complete ID Verification

All launch participants will be required to complete an ID verification process before registering for a network launch. The ID verification process involves uploading a Photo ID or Passport as well as uploading or taking a personal photo (aka a “selfie”).

Launch Participants Must Complete a Protocol Specific Tutorial

The Participants best positioned to make impactful contributions to decentralized networks are those who understand the purpose of the protocol, how its underlying token is used, and intend to use the token for that purpose. Participants can expect this tutorial to include an assessment on the networks purpose and utility of its native token.

Launch Participants Must Successfully Complete ‘Proof of Use’

All Launch Participants are required to prove use by becoming an active participant in the network before tokens become transferable from the original participation address. Proof of Use requirements vary based on a launch partners respective network design, but are designed to align incentives across launch partners and participants.

Launch Partner Standards

Network Must Be Decentralized by Design

Launch Partners must be building Networks that are designed to be open, self-sustainable, and designed to become “sufficiently decentralized”. This includes building an open-source code base reliant on a variety of parties to actively use, develop, maintain and/or govern the network.

Network Incentives Must Enable a Robust Token Economy

Launch Partners must have sound economic incentive design that promotes participation, network security, and long term self-sustainability.

Launch Partners Must Display a Minimum Viable Network

Potential Launch Partners must demonstrate a working testnet of the protocol with some degree of outside participation (not just a whitepaper).

Launch Partners Must Coincide Token Launch With Mainnet Launch

Launch Partners must launch mainnet within a reasonable time frame following the token launch event (e.g., 28 days).

Launch Partners Must Complete Background Checks

Activate requires background checks and bad actor reports on all launch partners to ensure further diligence beyond technical assessment.

Launch Partners Must Demonstrate An Appropriate Use of Proceeds

Activate requires, where applicable, a reasonable use of proceeds, which should exclude development funding to achieve a fully functioning mainnet release.

Conclusion

We believe that the blockchain-native economy will benefit from robust network launch standards designed to create a transparent, fair, and participatory distributed future.

The Activate Launch Standards are naturally subject to change as we work with regulators, entrepreneurs and advisors to further advance best practices. As we enter the next chapter of Network Launches, the industry should be influenced by adaptable standards designed to facilitate more compliant and creative decentralized network launches, which lower the barriers for participation.

Our hope is that existing and future ecosystem participants will begin adopting and evolving these standards when launching a decentralized network.

Written by Collin Myers, Mara Schmiedt and Ejaaz Ahamadeen

Note: Participation in a token launch is subject to jurisdictional law and excludes jurisdictions, where the auction and/or trading of respective tokens is prohibited, restricted or unauthorized in any form.

Sign-up and find out more about our upcoming network launch at www.activate.codefi.network or contact us directly at codefi.activate@consensys.net

Originally published at https://codefi.consensys.net on December 11, 2019.