Critical to the success of this innovative project, we have proactively anticipated a number of factors that would either be required to fulfil our application requirements or we expect (based on team experience and legal advice) could arise as we activate and develop our platform. For more information, please get in touch.

Establishing the (stand-alone) network of community banks in quick succession is a critically important part of this project’s launch strategy. Several tools are being developed to ensure rapid but sustainable roll-out, one of which will be to streamline processes by use of existing documentation, as well as leveraging strong legal and regulatory connections to support our mission. We will be working very closely with our advisors, investors and legal counsel to identify and implement the most effective accelerants that can resolve any barriers to entry and mitigate risks, helping us expand to new markets as per our original plan. Network effects of the DAO’s token-holders and Foundation matrix are expected to add further support to this strategy. It is important to note that in the months immediately following the completion of Phase 1, we will initially have to focus on setting up community banks in European jurisdictions where the model is already recognised in some form and regulations are similar. As soon as these are successfully established, we will be in a stronger position to offer expansion internationally. Potentially, these could present more challenging regulatory environments and so require jurisdiction-specific expertise that will need to be identified through our network and/or new stakeholders.

The project's roadmap has not been delayed, but we have had to allow time for the many interlocking processes to run their respective course as they emerged. Key to the success of this project is establishing a comprehensive token economy that can align with both investor expectations and regulatory requirements. Hence, before approaching any regulator, it was essential that the intricate relationships between the Foundation, the Council, the token holders, and any subsidiary entities be fully understood and ratified. Designed with a robust token economy that prioritises longevity, regulatory and investor acceptance, rewards for active participation, as well as utility, this project is a complex hybrid. Furthermore, given that establishing the Foundation is a one-time endeavour, it was imperative we have the right legal structure and token economy design in place before proceeding to the next step. This project is innovative and through a hybrid structure intends to combine the best of traditional and new frameworks. While we established early on that there is no rule against our intended legal structure, it goes without saying that final approval does still depend on a regulator's decision.

We offer our founding investors the opportunity, and in fact actively invite them to join us on an advisory basis where they can contribute their experience or perspectives and most importantly, any networks or connections that might have the potential to support and accelerate our mission. As of 2024, we seek to develop connectivity with the project’s main target market: the Communities where demand for this solution is greatest and/or has the highest potential for rapid uptake - we will be looking for our investors to help in this effort. As outlined in the whitepaper, once profitable, investors will be actively involved in the decision-making around use of Foundation funds such as to support governance rewards, establish new community banks, or larger-scale social impact projects. After the TGE (token generation event), the community of token holders (primary and subsequent investors) will play an increasingly greater role in deciding Valhalla Network’s future expansion and development strategy. At the initial stage (2-5 years), the executive and non-executive teams as the majority token holders maintain a prominent role in directing the establishment of the first community banks. As the founding team’s tokens unlock and a fraction is naturally sold to the public, the community is expected to diversify and increasingly establish its own momentum of votes and decision-making on the use of the Foundation’s funds, the location of new community banks, and other large-scale community initiatives - exactly the self-perpetuating model that we originally envisioned.

Externally: Valhalla Network’s existence is founded on a passionate commitment to offer a sustainable solution that can generate enduring positive social, economic and environmental impact. Where appropriate, the network will develop and maintain reporting that is aligned to prevailing National (country-level) as well as international (OECD and UN SDG-styled) metrics capable of informing stakeholders worldwide of the positive effects generated (directly and indirectly) as a result of enabling and empowering local communities through this solution. As recognition grows, one of our core objectives is to generate strong government-level endorsement and backing to help further accelerate development and adoption wherever a need is identified; the release-valve effect this could offer to governments under increasing cost pressures is significant. Internally: As described in the whitepaper, each bank will be partially owned by a (local) social impact entity tasked with distributing a portion of dividends back into local community development programmes. Along with other initiatives supported by the bank, these will be reported back up to the Parent Foundation and thereby, the token holders. At all times, the Foundation will provide token holders with KPIs and other relevant metrics through a live dashboard built into the platform (more detail to follow as this is developed in 1H24).

By definition, DAOs are structured to actively limit power accumulation and conflicts of interest. In our case, as a token holder accumulates voting power, it becomes ‘increasingly expensive’ for them to accumulate further voting power (i.e. 1 token does not equal 1 vote), making access to a majority or swing vote virtually impossible. Conflicts of interest are also very quickly exposed as proposals and decisions are made ‘on chain’ in an open forum for greater transparency. Any proposals voted to pass have to obtain final approval from the Foundation’s non-executive Council who are actively responsible for overseeing governance, regulatory and legal concerns as well as ensuring the Foundation abides by any applicable laws and works continuously to preserve the best interests of its purpose. In the project's infancy (2-5 years), the start-up team has a greater influence over the network's expansion through token ownership; this is to ensure decision-making and governance are effective and sustainable, developing increasingly mature processes over time. Community-accepted guidance will be formalised as part of this process, and as voting power is gradually distributed from the team, the ‘number of voices’ will increase to more accurately reflect the breadth and depth of the stakeholder network. As an emerging form of legal structure, it is understood that DAOs might advance further so part of our strategy is to actively monitor and develop increasingly robust and resilient governance frameworks capable of preserving and protecting Valhalla Network’s founding model while also empowering it to most effectively evolve to serve its mission stably and sustainably, regardless of regulatory change, volatility or turmoil.

We will use the ERC-20 standard, starting on the Ethereum blockchain. As required, we will take the token to other chains as we see fit, continuing to use the ERC-20 token standard on any EVM compatible chain we operate on. The ERC-20 introduces a standard for Fungible Tokens, in other words, they have a property that makes each Token be exactly the same (in type and value) as another Token.

There will be a number of smart contracts, and all of them will be fully validated and open for inspection on Etherscan, or the appropriate block explorer for any other chain we operate on. The full “rules” of our smart contract ecosystem is under design and development currently. For the ERC-20 token, we strive for a simple token with minimal gas cost in the token contract itself. We will also have vesting contracts, a governance participation reward contract, and depending on the governance testing results, we might end up with governance smart contracts as well. All of these will be open source, extensively unit tested, and audited prior to trusting them with value on mainnet. All state changes will result in readable events so we can easily track changes, and everything will default to having getters and setters, with explanations for why they are missing if something needs to be immutable.

Smart contracts relate to token holders of Valhalla Network Foundation (the parent company of each bank). Governance token holders cannot govern the banks directly because the regulators would forbid such a governance structure. Each bank would be a separate entity that would be managed by locally based senior bankers, but owned by the Foundation. As a shareholder, the Foundation will have voting power over the banks through the Foundation’s Council (who are answerable to token holders and must act in the interests of the project, token holders, and the Foundation’s Statutes).

The period of time relates to how long the tokens are locked for before they are accessible. The lock-in period is to align the interests of the team with that of our investors. By locking the team in for longer, investors will have the ability to sell all of their tokens (if they desire) before the team receives a single token - this gives investors confidence that the team is fully behind the project for the ‘long-term’ and aren’t looking to sell shortly after the token generation event. This is a huge benefit to investors and an important feature of a token start-up. It gives confidence that there is no malicious intent.

Many token projects include a staking element that guarantees a yield in order to incentivise “holding” of the token. Valhalla Network will not do this. What Valhalla Network will do instead is provide incentives for DAO governance. The name of this mechanism is to be decided, but in exchange for locking tokens AND participating in governance through active voting, a token holder can receive rewards. This is effectively a reward for the work it takes to participate in discussions, read and understand proposals, and make an informed vote. This will allow our token holders to earn something similar to a yield on tokens they are willing to lock for a period of time, but only in exchange for participating in governance. Holders will have an option to delegate their voting participation.

The absolute minimum possible, and almost all of this data will be transactional.

Token Burning will be an option available upon governance from the DAO. This means the ERC-20 will have a token burn mechanism for destroying a portion of the existing minted supply. The burn is there in case it’s necessary at some point in the future, and is meant to maximize options for future governance. There are no plans to use burning regularly, or as a way to deflate the coin and influence price.

The biggest risk of a 51% attack comes through the DAO governance. All blockchain consensus must grapple with this attack vector. We are currently working on defining our goals around consensus, and one of these goals is to maintain security against this threat. Described below in the section on voting power is a description of non-linear voting, which would make gaining a 51% share significantly more expensive and painful. Our incentive design will focus on maximising voting participation and decentralisation. These and other options are still in R&D, including building scenarios and simulations, but these will be backstopped by metrics that will provide advance warning on suspicious accumulation of voting power.

All tokens will have the same voting power, though it won’t be as simple as counting tokens. We are discussing a “non-linear” form of governance that will make the voting power not a simple 1 token, 1 vote system. The purpose of this is to ensure that token holders with a large number of tokens are not easily able to overwhelm a large number of smaller holders. This will be a security measure, ensuring a majority of 51% of the vote will be much more expensive. This will be extensively documented, justified with simulation, and well explained to all token holders. Important to note: As mentioned previously, we will provide voting delegation. This makes it easier for people to participate fully in all votes, but has a risk of voting power becoming concentrated around specific individuals. This is a variant path towards a 51% attack. As such, we’ll establish metrics and mechanics to control for this type of power concentration, including proper incentives, the most obvious of which will be simply reporting the relative voting power of all the delegates. Delegate addresses will be known and tracked.