RootProject - WORLD'S FIRST EFFECTIVELY TAX-SUBSIDIZED CRYPTOCURRENCY
About Root Project
a nonprofit powered by a very powerful cryptocurrency
A new crowdfunding model creates supply and demand for community projects. Project initiators don’t need to complete the project or know anything about cryptocurrencies. Donors get tax deductions. Socially visible projects enhance reputations.
A portion of a project’s crowdfunded proceeds go to token purchases, driving currency demand. The rest goes to material, one supervisor’s wages, and wages for those stuck in poverty to complete the project. The currency’s supply is hard capped, so each project reduces liquid token supply.
‘Pension’ Fund and Interest Alignment
In addition to hourly wages, paid in USD, cryptocurrency worth half of the day’s earnings is deposited into a medium-term pension fund-like entity - further reducing liquid token supply and aligning the interests of investors and society’s most vulnerable.
Concept & material development, backend coding
Pre-ICO on Jul 10, backend alpha on GitHub
Legal incorporation, front-end development
ICO on Sep 26
Coins tradable on exchanges, pilot projects
Expansion in States + Worldwide
Ten Billion ROOTs ERC20 tokens will be created on the Ethereum blockchain during the ICO campaign. No more ROOTs shall ever be created. To fund initial operations, RootProject will begin its ICO on September 5, selling 20% of the total supply to crowd sale participants. It will last for a period of 21 days or until two billion ROOTS are sold, whichever period of time is shorter. Each ROOTS will be sold for .0001 ether, approximately $.0199 USD, meaning the effective hard cap for the crowd sale is approximately $38,000,000 USD. Tokens will become transferable within a week after the ICO completion.
In order to fund initial hires, legal incorporation in Switzerland and other necessary expenditures, RootProject will conduct a limited pre-ICO on July 10, 2017. The Pre-ICO will last until July 28, 2017 and is uncapped. Investors in the pre-ICO will enjoy a 50% bonus over the ICO rate. For example, a purchase of a million ROOTS during the pre-ICO will give the investor 1.5 million ROOTS.
Early Backer Bonus
Those participating in the first five business days of the ICO itself will enjoy a 10% bonus. For example, a purchase of a million ROOTS will give the investor 1.1 million roots.
Post ICO Supply Schedule
40% of ROOTS will in total be released, beginning six quarters after the completion of the ICO, at a rate of 3.33% per quarter. Thus, the beginning of Q7-Q18 will see a small amount released each quarter. Q1 is defined as beginning the day after the last day of the ICO. This rate has been chosen so the release schedule will, based on reasonable organizational growth, be outstripped by non-investor purchases of ROOTS.10 That is, releases of liquidity into the market will be less than demand growth. Should these projections appear to be inaccurate in a given quarter, the release schedule will be slowed to protect investors and “pensioners.” Conditional on decisions by tax authorities concerning the status of the non-profit, 10% of ROOTS will be reserved for employees, to align investor and employee interest. This portion will be vested to employees over a 12 quarter period beginning in the second year of the organization. However, it may not be possible to be confirmed as a non-profit with such an employee compensation structure – it is a relatively novel regulatory question. In this case, the 10% will be added to the contingency fund.
5% will be held in a fund to compensate project initiators as explained above. 5% will be used for unaffiliated developer’s incentives. 5% will go towards an establishment of a research fund. 2% of the ICO total is reserved to compensate those taking part in the bounty campaign. The remaining 20% will be held in a contingency fund to cover special projects, mainly to partially match large donors projects. As with the release of real time crowdfunding data, an emphasis will be put on investor communication and transparency, so investors will operate with as full an information set as possible.
Use of Funds
Pre-ICO funds will be used to enlarge the development team, form charters in Switzerland and the
United States, finalize choices for pilot cities, begin crowdfunding outreach to appropriate networks
of large donors and create promotional material for the ICO itself.
Following the ICO, a larger development team will be hired, along with a CTO and a COO whose initial
focus will be on building out the on-the-ground operations in pilot cities. Core technical teams will
be formed around a central office in New York or Boston, and more cost-efficient teams will be
created in leading centers of technical talent in Europe. A decision on the location of the central
office will be based on local policy maker buy-in.
On-the-ground nonprofit staff will be placed in 3-5 pilot cities, depending on final ICO funds and local
nonprofit and policy maker buy-in. Initial staff expenditure will involve teams of four and quickly expand
as local crowdfunded projects create wage supply. Initial city teams will involve a senior organizer from
local policy or nonprofit circles, a general administrator, a head project manager, and a community,
donor and volunteer outreach coordinator.
Academic grants will be administered as a cost-efficient way to bring relevant experts into a more active
program-design and lead role. Similarly, small community grants will be used to build networks of
corollary organizations and leverage their preexisting expertise, manpower and social capital in the
The ROOTS token and Smart Contract integration
The ROOTS token
RootProject will issue its own token called ROOTS on the Ethereum blockchain following the ERC20
standard. A portion of tokens paid to workers will be locked in a “pension fund”, but liquid tokens will
be fully transferrable between ROOTS owners to any Ethereum address.
Compared to using an existing crypto asset, the custom built ROOTS token provides several
advantages. Namely it,
• Allows the alignment of investor and worker interests;
• Allows the use of ROOTS tokens in smart contracts for secure, verifiable and irreversible
• Protects investors and workers from exchange rate volatility experienced by other crypto
assets, which may arise because of factors not related to the RootProject development;
• Provides the ability for RootProject to verifiably issue or burn tokens;
• Allows the ROOTS token to migrate to a new blockchain, for example Bitcoin Rootstock, in
the event that Ethereum does not fully satisfy the RootProject’s needs and requirements;
• Makes it possible to develop smart contracts that would lock in ROOTS tokens for a specified
amount of time. In particular, for the medium-term ‘pension fund’ and for negotiated very
long buy-and-hold contracts related to negotiated projects with large institutions
“Pension fund” smart contract mechanism:
Smart contract mechanism
1) Project Starter (and individual or an organization) starts a social campaign initiative on the
RootProject Website or App
2) Contributors raise money towards the project by donating either fiat or a cryptocurrency
3) Proportion of the raised funds get automatically exchanged into ROOTs
4) ROOTs are deposited into a “Project Contract” smart contract, which will go towards the
“Pension Fund”. Those funds will be sent to the worker’s “Pension Fund” only if “Validators”
sign the contract. Both the Project Manager’s and Project Starter’s signature are required to
confirm the project’s completion. Should one of them fail to sign the contract or report that
the project does not meet the requirements, a RootProject Independent Checker gets sent to
assess the project’s status. The Independent Checker has the “master signature” and can
overrun the Project’s Manager’s and Starter’s decision.
5) ROOTs are sent either to the worker’s “Pension Fund” smart contract, or back to contributors
should the project fail to be completed
6) “Personal Progress Validators” act as oracles to check off the worker’s requirements for
“pension fund” release to the worker. Those requirements would include things such as
“attended X substance abuse seminars” or “worked for 10 hours weekly for 4 weeks”
7) Once the “Personal Progress Validators” sign the contract, the Smart Contract 2 starts to
release ROOTs to the worker’s personal crypto wallet via the specified schedule. Should the
worker fail to reach certain personal milestones, the “Pension Fund” contract sends money
back to contributors
8) Worker gets full control of ROOTs, which he or she can exchange for fiat / other crypto / use