Since Particl’s inception, the project has been financially and legally supported by a Swiss non-profit Foundation; the Particl Foundation. This legal entity has served the purpose of funding the development and management of Particl as well as supporting the project legally using funds that it raised from the community in 2017.
As of November 2020, after slightly more than three years, the Particl Foundation has run out of the funds it raised from community donations and as such, has initiated its shutdown process. A mandatory closure audit is currently underway.
As a result, the Particl team has since then voluntarily supported the project since no funds are available anymore to pay for salaries, expenses, and fund development and initiatives.
With today's fast-paced and rapidly evolving blockchain industry, any serious project needs to have enough funding to support its ecosystem, promote its product(s), and grow its community. Equally important is the necessity to have legal representation so that the project can effectively and safely interact with other parties, manage funds, and own assets (i.e., servers). Without any of this, projects expose themselves to being overrun by competitors who don’t have the same financial struggles.
To address this critical issue, the Particl team has consulted with a few advisors and community leaders and put together a proposal for a new decentralized treasury model that, if approved by the Particl community, could bring enough funding to self-sustain the project at current prices, boost community resources, and provide a brand new legal entity to support the project.
This blog post will explain, in full detail, every aspect of the new decentralized treasury model; how it works, its benefits and its parameters. This is a first step aimed at getting you familiarized with the proposed idea.
Then, in a separate blog post that will be published in the next few days on Particl News, we will publish a full breakdown of how the Particl team intends to claim and use those funds, restructure the project, stimulate the community and bring the Particl ecosystem to the next level in all aspects.
Table of Contents
- The Proposal in Short
- Proposal Approval and Treasury Governance
- Funding CCS Initiatives With a Community Fund
- Additional Benefits
The Proposal in Short
This decentralized treasury model proposal, which is closely modelled after that of successful projects such as Siacoin and Decred, aims at firing up and expanding Particl into a stronger-than-ever ecosystem by generating more PART that can be put to use to the benefit of the project. The Particl team would then claim funds from this treasury by pushing CCS proposals either quarterly or bi-annually.
To preserve a good level of decentralization and ensure community consensus, the introduction of this new treasury model requires approval from the community through an on-chain voting process that’s going to be opened up in the days to come. If approved, the modifications necessary to activate the new treasury model will be included in the upcoming hardfork that re-enables RingCT and CT transactions.
Self-Sustainability—The Numbers in Detail
- Circulating supply post-hardfork (estimate): ~11,750,000 PART
- Proposed yearly inflation rate: 8%
- Proposed treasury block rewards: 50%
- Proposed total yearly staking rate (APR for stakers): 4%
- Proposed yearly treasury rewards (estimates): 470,000 PART
- Monthly treasury rewards (averaged from estimates): 39,166 PART
Note: If the proposal is approed, the current 10% “development staking reward” is going to be abolished in profit of the new decentralized treasury model.
In summary, the proposal for this new decentralized treasury model suggests increasing the yearly inflation rate from 2% to 8% for one year and then decreasing it by 1% every year until it reaches 6% and stays at that level. Every time the network stakes a block, 50% of the block rewards would then be redistributed to stakers and 50% into the Treasury Fund to fund, support, promote, and grow the project. That amounts to 4% of the total circulating supply every year.
This brings the yearly PART staking interest (APY) to a minimum of 4%. Because APY depends on how many coins in total are staking on the network, the true APY always ends up being higher than its minimum rate. For example, if 50% of all the PART coins are staking on the network, the staking APY goes from 4% to around 8% yearly.
This proposed treasury model is all about self-sustainability. Indeed, it provides enough funding in PART to the project to cover salaries for the core team, pay for all related expenses, and fund various promotional budgets at current (and lower) PART prices. It also gives the extra resources required to expand the team with more talents and add more expertise to the table. More details on the internal restructuring of the team and how it intends to claim and use those funds will be provided in a separate blog post published in a few days on Particl News.
During its first year, the Treasury Fund would earn an average of 39,166 PART every month. This is sufficient, at current price levels of PART = $1, to sustain the project and fund various initiatives to take Particl to the next level. The proposed model is viable down to a PART price of around $0.50.
Of course, the Treasury Fund exclusively gets funded with PART. An increase in the trading value of the coin would then make the incoming revenue more valuable in fiat, allowing the team to expand further, fund more initiatives/programs, stimulate the community to a greater degree, and accelerate the growth of the entire ecosystem even more. For this reason, the Treasury Fund has exponential growth potential, but it's also important to note that a reduction in the price of PART can also have an adverse effect.
Proposal Approval and Treasury Governance
The Particl team has long been looking to decentralize the project further and put more power into the hands of the community. That’s the true spirit of blockchain technology, after all, and this is precisely what this new decentralized treasury model achieves.
As such, this new treasury model is being suggested as a CCS proposal and requires community approval to be set in motion. If the vote passes and the proposal is approved, the new treasury model will be put in place in the upcoming hardfork.
As for the governance of the Treasury Fund itself, you, the community, will have the final say over it. To claim funds from it, the Particl team will publish CCS proposals every quarter or on a bi-annual basis, depending on a few factors at the time the proposals are published. These proposals will detail how the funds are intended to be used, the objectives for the claim period, and what to expect in terms of deliverables.
As mentioned earlier in this blog post, the Particl team will publish shortly a separate blog post exclusively focused on explaining how it will be restructured in light of this new decentralized governance (including a brand new legal entity), how it intends to claim and use funds moving forward, as well as its objectives and deliverables.
Community Governance and On-Chain Voting
To approve CCS proposals and claims of funds, the community will be invited to vote through the on-chain voting mechanism built into Particl Core. This voting system uses staking weight, meaning the number of coins being staked, as voting tickets. The more coins you stake on the Particl network, the greater your voice in these voting events.
It is possible to vote using clients such as Particl CLI, Particl Desktop, and Particl-Qt, but the best way to do it is through Particl’s cold staking application Partyman. To facilitate the process of voting, a GUI integration has been added to the CCS, effectively tying proposals to on-chain voting events.
More information about the on-chain voting system, including the consensus and quorum requirements, will also be published in a separate blog post focused on the on-chain voting scheduled for in a few days on Particl News.
Funding CCS Initiatives With a Community Fund
The implementation of the treasury model, combined with the on-chain voting system integration into the CCS, will also enable brand-new opportunities at the community level. Every month, a number of PART coins coming from the decentralized treasury fund will be sent into a community-governed fund.
This Community Fund, which already contains ~25,818 PART coins as a result of unclaimed PART during the coin swap event in 2017, will be made available to the community to be used to fund CCS initiatives. For an initiative to be funded by the Community Fund, it needs to first go through a voting process, reach a voting quorum (minimum number of coins having voted), and approval rate. If that is achieved, then the proposal is officially approved by the community. According to the milestone schedule, the correct number of coins will be sent from the Community Fund to the initiative’s custodian.
While this blog post simply exclusively intends on explaining the decentralized treasury model proposal, here are some of the benefits it will provide to the project if approved. Of course, much more information on that end will be published in the blog post that will explain how the team intends on using those funds coming in just a few days.
- Complete restructuring of the team’s internal processes, management, leadership, and communications (internal and external).
- Team expansion as price and market situation permits.
- More active and rapid development as well as a more constant release schedule.
- More regular, streamlined, and transparent communication/updates.
- More active, engaged, and blooming community and ecosystem.
- More focus on deliverables other than Particl Core, the marketplace, and Particl Desktop.
- Renewed efforts in getting listed on more prominent exchanges.
- More financial and human resources to market Particl’s products (i.e. PART coin, Particl Marketplace, BasicSwap DEX, etc.)
- Many more promotional and user acquisition initiatives.
- And more…
We hope that you are as excited as we are about this proposal. It has the power to significantly change things around and give the project the spark it needs to get the exposure, recognition, resources, and workforce behind it that it deserves.
As we finally move ahead with a lot of what's been in the works for the last weeks, keep an eye out on Particl News and the CCS this week and the next one. We will start publishing lots of new content including follow-up blog posts and the CCS proposals. We invite you to take part in the discussion related to these proposals in their respective comment section on the CCS as they get published.
Let’s get this proposal approved, and let’s take Particl to a whole new level!
The Particl team
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