CHLOM employs a dual-token model: a community/governance token (CHM) and a value-token (C-CHLOM). CHM represents participation, voting rights, and contribution credits, while C-CHLOM carries monetary value for licensing, revenue shares, or royalties. Dual tokens address the conflicting needs of utility vs. governance: one token can fuel usage incentives, and the other anchors long-term value. In practice, CHM tokens might be minted or earned by contributors (e.g. content creators, validators, community milestones), whereas C-CHLOM is used to purchase access to CHLOM’s intellectual property or receive a share of revenues. By separating roles, CHLOM can, for example, let CHM holders vote on how to license the “CHLOM LEX” dataset, while C-CHLOM tokens circulate as license keys or royalty coupons in the economy.
Each token should have clear smart-contract rules: CHM might be non-transferable or capped to prevent speculation, and grant voting or utility privileges. C-CHLOM should be transferable, possibly fungible tokens representing economic rights. Both contracts should be versioned and deployed with upgradability (e.g. via proxies) and pausable/mint-restrictions. A multi-signature (multisig) wallet should own critical roles on both contracts. For example, deploy the CHM and C-CHLOM token contracts, then immediately transfer their ownership to a Gnosis Safe multisig (e.g. 2-of-3 or 3-of-5 keys). This ensures no single individual can arbitrarily mint or drain tokens; all administrative actions (mint, burn, change fee, pause, upgrade) require M-of-N approvals. Gnosis Safe is widely used for DAO projects: it lets multiple owners set daily limits, emergency measures, and provides on-chain audit trails of all transactions. As explained by Bitbond, “Safe’s M-of-N setup ensures collaborative governance and mitigates risks tied to key compromise”. In short, treat the multisig as the sole “owner” or admin, with hardware wallets for each key and strict off-chain key management.
Regulatory Compliance and Fundraising
From the start, plan the token launch as a securities offering unless you’re certain the tokens have purely consumptive utility. Under U.S. law, most token sales meet the Howey Test (investment of money in a common enterprise with profit expectation from others’ efforts), so regulators treat them as securities by default. For example, the SEC’s 2017 DAO Report explicitly concluded DAO tokens were securities, and guidance confirms that merely using blockchain technology doesn’t override securities laws. As legal experts warn, **“most tokens sold to fund development qualify as securities under current interpretations”**. You must work with experienced securities counsel early and build compliance into your token model.
To minimize regulatory risk while still raising funds, use exemptions:
- Regulation CF (Crowdfunding): Raise up to $5 million from the public via registered funding portals. This allows retail participation but caps the raise and requires strict disclosure and intermediary oversight. Often projects run a Reg CF sale in parallel with Reg D (below) – giving a small public allotment while handling major funding privately.
- Regulation D: 506(b) or 506(c) offerings to accredited investors. Under 506(b), up to 35 unaccredited investors can participate (with heavy disclosure), but public advertising is limited. Under 506(c), you may broadly advertise but must verify all investors are accredited. These paths let CHLOM target institutional or high-net-worth backers and preserve flexibility. Many projects use Reg D for the bulk and Reg CF for community inclusion.
- Regulation A+ (Tier 2): For larger raises (up to $75 million) and semi-public offerings. The Stacks token (formerly Blockstack) was the first SEC-qualified token via Reg A+ in 2019. A Reg A+ filing is expensive and slow, but it allows a wider investor base under SEC review. In rare cases, consider an offshore Reg S or Cayman issuance, but ensure U.S. investors are excluded or compliant.
Fundraising mechanisms like IDOs and “lockdrops” are popular in crypto, but do not dodge regulation. An IDO (Initial DEX Offering) – launching tokens on a decentralized exchange – is still an offer of tokens for value and can be a securities offering if marketed to U.S. persons. Similarly, a “lockdrop” (e.g. distributing tokens to liquidity providers who lock funds) should be treated as a token distribution (and possibly a sale) under U.S. laws. In all cases, emphasize transparency and disclosures. Prepare a compliant whitepaper/“token prospectus” describing rights (governance, utility vs. profit share), vesting schedules, use of proceeds, and risk factors. Use KYC/AML checks for purchasers if using Reg D/CF to ensure no violations. Structure vesting and lock-up schedules into the token contracts (or external vesting contracts) so that team, advisors, or seed investors receive tokens over time, reducing pump‑and‑dump risk.
DAO fundraising: CHLOM could also leverage a community DAO structure. For example, a Delaware DAO or similar legal wrapper might hold treasury and conduct a token sale. However, SEC cautions that even a DAO’s tokens are likely securities. If using a DAO vote for token distributions, ensure underlying mechanisms mirror a compliant offering (registered or exempt). Crowdsourced models like IDO on regulated DEXs or continuous bonding curves (token bonding) are options, but always consult legal counsel – aim for states-compliant flows (e.g. platform compliance with Reg A or Reg D contributions).
In summary, combine legal pathways: e.g. start with a private Reg D raise, then a small Reg CF allocation, and plan an eventual public listing only after investors agree to hold through any required lock-up or registration. Build flexibility: have mechanisms to delay public trading until compliance (e.g. time-locked liquidity pools, KYC gates on minting functions). By “building robust, transparent structures from the beginning,” you “position your project for long-term success”.
Technical Deployment & Security
When working with your development team, adopt rigorous secure-development practices:
- Ownership & Custody: Deploy both token contracts from a neutral (dummy) account, then immediately transfer ownership to a multisig Safe (see above). Do NOT leave tokens owned by a single private key. For example, deploy on Ethereum or a Layer-2 testnet, then transfer the
- Multisig Control: All sensitive functions (minting, pausing, upgrading) should require Safe approval. Code the contracts with
- Vesting and Timelocks: Use established vesting libraries (e.g. OpenZeppelin’s TokenVesting or custom vesting contracts) for founder/token sale allocations. Also consider a timelock on treasury funds: e.g. a contract that slowly releases tokens over months, with the Safe controlling the timelock’s admin. This creates trust that team allocations aren’t immediately liquid. Define these rules explicitly in code (and in your docs): for example, “Team tokens vest over 2 years with a 6-month cliff.”
- Upgradeability: If planning future upgrades, use a transparent proxy pattern (e.g. OpenZeppelin’s UUPS or Transparent Proxy) with an upgrade-admin as the multisig. Multi-sig should control calls to
- Audit and Testing: Before mainnet launch, conduct thorough audits (internal and third-party) of the token contracts and crowdsale logic. Run simulation on testnets: deploy to Goerli or Mumbai, perform all steps (minting, transfers, vesting releases) to confirm no unintended behaviors. Use OpenZeppelin Defender or Tenderly to simulate Safe transactions.
- Redundancy: Keep backups of all important data and keys. For example, export Safe configuration JSON (available in the Safe UI) and store offline with corporate records. Backup the multisig’s seed phrases in secure vaults (or split into Shamir secret shares). Use at least two independent pinning services or nodes for any IPFS content (see next section).
Licensing CHLOM LEX IP & Trademarks
CHLOM’s value partly lies in its licensed IP (the “CHLOM LEX” dataset, brand, etc.). Use the token system to gate and monetize access: for example, require holding X C-CHLOM tokens or burning a token to access certain data or run analytics models. Smart contracts can encode license terms – for instance, a C-CHLOM token could be an NFT representing a license, or a fungible “data credit” that is spent on API calls. Smart contracts can also automate royalties: as noted by legal experts, “smart contracts may be used in IP transactions to monitor IP usage and collect royalties” (e.g. automatically transferring fees when content is accessed).
Simultaneously, register and protect IP off-chain. File trademarks for “CHLOM” and related logos through the USPTO (or relevant jurisdictions) to secure brand exclusivity. For any unique algorithms or datasets, document them as trade secrets and restrict access (only holders of certain CHM/C-CHLOM roles, NDA-signed users, etc., can view). Consider recording hashes of key IP assets on-chain for provenance: e.g., timestamp a hash of a data release or whitepaper on Ethereum to memorialize creation date (a blockchain-authenticated chain-of-title). As Troutman Pepper notes, blockchain’s immutable timestamping can serve as evidence of authorship or trademark usage.
For active licensing, a DAO-controlled vault can hold encryption keys or contracts. The new Story Protocol’s “IP Vault” is an example: it stores decryption keys for IPFS-hosted files and enforces on-chain access rules. CHLOM could implement a similar vault: encryption keys for proprietary datasets live in a multisig or DAO wallet, and C-CHLOM tokens (or NFTs) grant conditional decryption. This way, license agreements become code: a C-CHLOM holder triggers a transaction that grants access under preset conditions. You might also use an escrow smart contract for IP licensing fees: e.g. when C-CHLOM is spent on a license, funds are automatically allocated between stakeholders (developers, data providers) per a smart-agreed schedule.
Finally, maintain thorough records of IP ownership transfers. If licensing CHLOM LEX to third parties, record those agreements in the blockchain (e.g. hash and timestamp each contract) to build a transparent on-chain chain-of-title. Periodically renew trademarks and monitor for infringement. Involve the CHM governance token in IP decisions: for instance, CHM holders could vote on large-scale licensing deals or changes to open-source licenses. This ensures the community collectively stewards CHLOM’s intellectual property.
Data & Token Preservation Strategies
Effective long-term preservation requires both on-chain and off-chain measures. The token metadata (if any) and off-chain files should be stored decentrally. For example, if CHLOM uses NFTs for license keys, host artwork or metadata on IPFS or Arweave. Use content addressing (IPFS CIDs) so the data’s integrity is self-verifiable. Importantly, pin all IPFS content on multiple nodes/services. You can run your own IPFS cluster or use redundant pinning services. As IPFS documentation advises, “pinning a CID tells IPFS that the data is important and shouldn’t be removed”. Services like Pinata or Eternum provide high-availability IPFS pinning without lock-in, and Protocol Labs’s NFT.storage offers free IPFS+Filecoin backing for NFT data.
Figure: An example decentralized data node (IPFS).
To safeguard critical code and metadata, use cryptographic proofs: sign releases with GPG keys, commit hashes into Git tags, and record those hashes on-chain or in public logs. Archive the Github repo via services like GitHub Archive Program or a self-run backup. Enable contract verification on explorers (Etherscan) – a developer or auditor should be able to match the deployed bytecode with the public source. For added immutability, consider publishing key documents to Arweave, which provides permanent storage at a one-time fee.
Succession planning: Define what happens if founders exit. For instance, articles of association or a community constitution should authorize the Safe owners or a board of DAO trustees to appoint new members or recover keys in case of emergencies. Have contingency processes: e.g., if one Safe key is lost, the remaining owners reinitialize a new key via Safe transaction. Ensure at least one non-founder (e.g. a trusted community member or legal trustee) holds a Safe key to guarantee continuity.
For cross-chain migration or upgrades, build in flexibility. If moving CHLOM tokens to a new chain or version, you might implement a migration function: e.g. users burn old C-CHLOM to claim new tokens 1:1 on the new platform. Unvest suggests a process of pausing the old contract, deploying the new one, and running a migration bridge. Always announce migrations clearly, freeze trading by pausing (or listing delist) old tokens, then activate claims on the new contract. Audit and trial the migration on a testnet first. By pausing minting on the old chain and redeploying on the new one, CHLOM retains its rights and balances across versions. Finally, consider cryptographic proofs of record: logs of important decisions or snapshots of token balances can be hashed and stored on multiple blockchains to provide multiple anchors of truth.
In all cases, prioritize redundancy: mirror metadata on different networks (e.g. IPFS + Arweave), hold keys in geographically-separated hardware vaults, and publish backup data under open licenses. The decentralized nature of the chosen storage (IPFS/Filecoin, etc.) inherently provides replication. By combining best practices – multisig control, audited code, pinning, and legal registration – founders can ensure CHLOM’s ecosystem remains transparent, secure, and resilient.
Sources: We drew on regulatory and technical guides for blockchain projects, including SEC releases and legal analyses to shape these recommendations. Each practice here aligns with industry advice and compliance frameworks.