__________________________________________________________
CIP: TBD
Title: Add Merkle Science’s Predictive Analytics as a SV with a 2.0 Weight, (Max 4.0)
Author: Dr. Justus Delp
Discussions-To:
Comments-Summary:
Comments-URI:
Status: DRAFT
Type: Governance
Created: 2020-12-16
Approved:
License: CC0-1.0
License-Code:
Post-History:
Requires:
Replaces:
Superseded-By:
Abstract
This CIP proposes Merkle Science to join the Canton Foundation by adding Merkle Science as SV with a Weight 2.0 (Max 4.0) delivering three important outcomes: 1) natively integrate the Canon Network to protect economic activities from illicit and sanctioned activities 2) actively accelerate the institutional adoption via 100+ global customers, and 3) optimize the rewards program for featured applications.
-
Ecosystem Protection: Merkle Sciences is going to deploy its behavioral analytics enabling real time detection of sanctioned and illicit activity. This is a fundamental building block of network security to meet heightening regulatory obligations for financial institutions and stablecoin companies. As such, it is prerequisite to boost institutional adoption of Canton. To realise these benefits, Merkle Science will provide two complimentary enterprise Compass licenses to the Canton Foundation enabling them to detect and shield their Canton operations from sanctioned and illicit activity. Additionally, system relevant infrastructure such as the Loop wallet will receive complimentary access to safeguard 3.8M transactions every day.
-
Institutional Adoption: The first onboarding of a stablecoin issuer is expected to generate 15M+ transactions will take place by April 2026. Due to this there is urgency for us to onboard Canton. Within 90 days, Merkle Science will make Canton available to 100+ customers including global exchanges, custodians, stablecoin issuers, and wallets. No less than 3 enterprise customers generating at least 30M in transaction volumes will go live in Canton within six months.
-
Rewards Optimization: To support the Canton Foundation, Merkle Science will develop a featured application framework to distinguish which applications drive long term economic value versus featured applications that are primarily incentivized by the rewards program. Distinguishing between different types of featured applications sharpens the effectiveness of rewards program - maximizing the impact of the approx. 17M Canton Coins (CC) that are distributed daily.
Motivation
-
Ecosystem Protection: Regulators (FATF, OCC, SEC, CFTC) and financial institutions expect embedded security infrastructure capable of handling complex transaction flows across wallets, DEXs, bridges, and smart contracts - especially against sophisticated actors (e.g., state-sponsored groups DPRK). Merkle Science addresses the need to supersede traditional crypto compliance models, which are no longer sufficient for today’s threat landscape. To realize the benefits, Merkle Science will provide complimentary enterprise Compass licenses to safeguard on chain liquidity and to prevent reputation and potentially irrevocable trust erosion. This is a prerequisite to support the onboarding of Merkle Science’s 100+ customers to Canton.
-
Institutional Adoption: Merkle Science acts as a critical bridge between blockchain infrastructure and financial institutions, exchanges, wallets and stablecoins. The native integration will provide 100+ customers access to deploy liquidity on Canton. In support of Canton’s growth, Merkle Science will actively accelerate the institutional adoption by onboarding a stablecoin issuer to Canton, along with no less than 3 enterprise customers generating over 30M in transaction volumes within six months.
-
Rewards Optimization: The featured application rewards have attracted a wealth of innovation to the Canton ecosystem. Yet, developing real-time insights on growth trends is critical to maximize the impact of the reward program. Currently the rewards are distributed based on activity in conjunction to featured application markers. This structure obscures the Foundation to fund featured applications that are not primarily driven by short term rewards, but to harness the efficiency gains of the Canton Network. Aligned with the proposed change (CIP Traffic-Based App Rewards) of relying on actual traffic spent on transactions, insights into the type of activity are necessary to understand which themes are driving significant activity on the network on a category vs featured application level. To do so, Merkle Science will deploy its real time blockchain analytical services to systematically categorise the applications. This enables the Foundation to optimize the rewards program based on the underlying growth drivers. Simultaneously, insights into the effectiveness protect financial institutions from exposure to incentive-induced transaction activity that is not contributing long term economic value.
Milestone Specification
|
Deliverable |
Acceptance Criteria |
Deadline |
Weight Earned |
|
Activating Predictive Risk Analytics |
|
90 days from approval |
0.5 |
|
Institutional Onboarding |
|
180 days from approval |
Max weight 2.5 +0.5 for every 15M in transaction volumes
|
|
Complimentary Licenses to Loop & Canton Foundation
|
|
120 days from approval |
0.5 |
|
Rewards Optimization in a Custom Real-Time Dashboard |
|
120 days from approval |
0.5 |
About Merkle Science
Merkle Science is an AI-powered blockchain analytical platform that provides actionable real-time intelligence. We have been operating since 2018, spanning 27 blockchains trusted by 100+ customers with leading institutions such as Crypto.com, Laser Digital, Consensys, and Hudson River Trading. Merkle Science provides security infrastructure and business intelligence critical to drive institutional adoption by blocking high profile threat actors from accessing financial services. The company has raised $27MM in funding from Susquehanna, Uncorrelated Ventures, Digital Currency Group, and Kenetic.
Rationale
-
To foster trust, transparency, and collaboration within the Global Synchronizer ecosystem, Merkle Science will apply its proprietary technologies to protect against sanctioned and illicit activities in pursuit of safeguarding institutional adoption.
-
Whilst access to our technology increases the transparency, this proposal also enhances collaboration by extending API access to the critical infrastructure and featured applications to benefit from the enterprise services.The onboarding and complimentary access is aligned with the suggested weight of 2.0 based on the current minting schedule.
-
Finally, the previously collected feedback from SVs underscore the importance of this protection to strengthen the trust within the canton community.
- An extraBeneficiary PartyID associated with the ‘escrowed’ Super Validator will be setup by the Foundation, or another SV node operator approved to provide SV rewards escrow services, with an SV Weight at the maximum earnable weight.
- The Applicant is responsible for coordinating the process of setting up the escrowed weights with the GSF and the operator of the SV node.
- The Applicant is responsible for all costs associated with the operation of the escrow SV.
- The escrow SV will NOT mint rewards on a block-by-block basis.
- All escrow SV rewards will go to the Unclaimed Rewards pool.
- ⅔ of the Super Validator Operators will update their configurations to allow the escrowing SV node to host the full weight to be earned by the given Super Validator.
- Applicant is required to present proof of successful completed milestones to the Tokenomics Working Group.
- Applicant must present a calculation for the number of Canton Coin it should earn for meeting milestone requirements.
- If the Tokenomics Working Group agrees the milestone has been met and approves the calculation, an announcement will be sent via the Tokenomics-Announce mailing list.
- The GSF will update the extraBeneficiary to an active PartyID controlled by that Super Validator.
- ⅔ of Super Validator Operators will then assign a portion of the Unclaimed Rewards to be minted by the Applicant’s Validator, based on the approved calculation.
If any milestones and associated rewards are not achieved by the deadline:
- Applicant will be notified they have not met a deliverable by the GSF.
- Remaining SV Weight assigned to the extraBeneficiary SV will be removed from the GSF node configuration, and the total SV weight of the GSF SV node will be reduced by the same amount by a vote of the Super Validators.
- The Tokenomics Working Group will make a recommendation to the SVs on what to do with the Unclaimed Rewards.
Changelog
-
Draft 2025-12-16
-
Revision 2026-01-05
-
Publication
Copyright
This CIP is licensed under CC0-1.0: Creative Commons CC0 1.0 Universal.