What is the bar for a project decentralizing with the SNS?

Hey all,

Some thoughts regarding the SNS, and what should be required of projects applying to decentralize – so that they can run as true decentralized protocols that are really part of the blockchain, with their own micro-economy. Not only can this mechanism decentralize projects, allowing them to fully tokenize, and gain access to viral growth dynamics, but it can bring in much needed funding from the decentralized ecosystem. This is sorely needed today.

Before saying more, I want to say two important things.

Firstly, I have been an entrepreneur for decades, and I understand the need to raise funding. In past lives, I’ve personally experienced pulling my hair out trying to pay bills while trying to raise relatively tiny amounts of money for very good startup propositions. I’ve gone from VC to VC in Europe, finding it impossible to explain technology and opportunities that they couldn’t understand. I’ve had VCs offer funding but only with some hideous liquidation preference in the terms. I’ve bootstrapped startups from nothing, then used funds accumulated over years of backbreaking work to fund new ventures, gambling what I accumulated and also selling all my cherished possessions to pay for TV advertising in a high stakes roll of the dice (that worked, I’m pleased to say). I’ve been to hell and back many times. I fully understand the difficulties and frustrations involved in raising funding, as well as the need for funding.

Secondly, the current blockchain economy sucks, and doesn’t work in ways that favor us. Venture capital firms have become corrupted by profiting from the pump cycle of new chains. Big firms made fortunes riding ICP then sunk new funds into ecosystems where they are now heavily underwater, then doubling down on their bets, while hating on ICP because it threatens the future success of those investments. New chains like Sui, raised hundreds of millions with negligible technology, and before mainnet launch, have created vast “communities” by offering tokens through ambassador programs that add hundreds of thousands of likes to their tweets.

Those same projects are now using funds raised to pay developers to build on their chains, to create new paid (some would say fake) ecosystems of developers, which will draw in more money, which they can then spend on paying more developers to build there, in Ponziesque schemes. Hilariously, these new chains are now successfully bribing developers from the Solana ecosystem to come to them – while Solana, under the leadership of SBF, and the Silicon Valley VCs he played Pied Piper too, first pioneered the system by investing billions to pay developers to build using funds stolen from FTX. Today, the crypto press remains owned by people invested into this broken and crooked wheel, and plays cheerleader, while mostly refusing to report on the Internet Computer and its projects at all. The true power of a blockchain’s technology, vision and its potential long-term impact aren’t really concerns in this broken economy, and many that might otherwise invest into ICP projects lack signal from the press and social media that would allow the market to function correctly. It sucks, it sucks, it sucks.

DFINITY and the Internet Computer ecosystem will not be deterred however. We continue relentlessly driving forward the technological capabilities of the network using unparalleled and unmatched R&D capabilities. We have delivered the World Computer paradigm where blockchain can act as a crypto cloud upon which smart contracts can be used to build end-to-end decentralized and tokenized servics that run under the control of communities. This is the future. We believe that markets return to rationality eventually, and we are working behind the scenes to make that happen, and expect success, despite the nature of the obstacles facing us.

Moreover, we look to the fundamental principles of decentralization, and enabling projects to raise money in automated ways from the ecosystem. Namely, we have made it possible for projects running on-chain to ask the Network Nervous System to assign them to a sub-DAO, called an SNS, which takes full control, allowing them to run in a fully decentralized way as protocols and really become part of the ICP blockchain, while being driven by their own on-chain micro-economies. And, through chain key cryptography, we are integrating with Bitcoin and Ethereum, such that soon, digital twins of tokens from these projects can also be created on Ethereum, where they can be used in DeFi systems like Uniswap, exposing them to the full depth of crypto liquidity available. But, it remains the case today – in the here and now – that there is a painful funding shortfall.

Today, the DFINITY Foundation helps in the earliest stages of projects through grants, and the ecosystem also has visionary investors that help with seed and early funding. But, while a project is on its way to being something appropriate for full decentralization via SNS functionality, which will allow it to raise money into its DAO, and create its own token economy, providing for future development, there is a major gap. This would normally be filled by VCs, in Silicon Valley, and other places. However, as explained, those same investors are up to their necks in investments in technology-short ecosystems that we threaten, and have been brainwashed by disinformation. Many still believe ICP was a rug pull. They think our technology must be fake, and dismiss it. The big VCs, who slavishly followed SBF, who they saw him as a financial genius and the next Silicon Valley wunderkind who could simply dictate success with his influence and capital, act as leaders to medium and lower-tier VCs, who always aim to follow in their wake. They are often now similarly invested and want us to fail too. This is shitty. Very shitty. Read Crypto Leaks if you are interested in seeing how things worked Crypto Leaks | Why Sam routinely manipulated token prices using FTX and Alameda

This means there is a funding gap between grants and seed funding, and the SNS. It has to be addressed, and urgently, because projects are hurting. For this reasons, there is a lot of chatter about creating a VC-SNS, a bit like The DAO from 2016, but done properly, which can fund projects passing through this middle phase. This is sorely needed, and people are working on it. This is good. Very good. The power of crypto networks, and the power of technology provides the way not only to a fairer economy, but also one that eventually allocates capital more efficiently.

Why? Algorithms and systems win. For example: Back in the mid 1990s, the Yahoo Directory had 300 people maintaining a taxonomy of the web, and it was worth billions and seemed indomitable. But when search engines appeared, which used algorithms to help people find what they wanted just by entering keywords, it got rekt within a couple of years. That is why we must create automated economic rails, which allow projects to get exposure to the full weight of the global economic system from anywhere in the world, in a more meritocratic system. Once this better system gets moving, it will draw unbelievable amounts of funding and talent into the Internet Computer ecosystem. But we are just getting started, and projects need funding now.

So now to my core million-dollar question! What should be the bar for a project proposing that the NNS fully decentralize it by assigning it to a new SNS sub-DAO that then runs a decentralization swap to distribute its governance tokens and fund its treasury, which project members might then draw on?

For anyone building a Web3 project on the Internet Computer, this should be a goal. And we can see that it works! Open Chat raised $5-6m, and its governance tokens now have a substantial token market cap in the tens of millions, and we are waiting to see how its community deploys its capital to grow and take on the world.

However, there should be a high bar for projects taking this step. Some substantial level of maturity is required. Here are the reasons as I see them:

  1. An SNS is meant to govern a functioning decentralized service, allowing it to function as a protocol. This involves its technology being fairly well developed and reasonably fully functioning, the presence of a real user base that can drive its economy, and teams of developers who will stand behind the project and drive it forwards. It doesn’t make sense for a very nascent service to be run this way, because the overhead of SNS governance will just slow down its development. Moreover, when things go wrong, they may call on the NNS to help fix what is meant to be running as a protocol that is part of the chain. We don’t want to see dead SNS projects. These are things that are meant to be fairly established.

  2. The NNS “Community Fund” deploys scarce capital, which is supplied by the community for use taking projects to the next stage with full decentralization. The community has every right to expect that projects its capital is deployed into projects that are fairly mature, in the sense that they have viable plans, working technology, emerging but significant communities of users, and viable teams helping develop them. Even though community fund neuron owners can temporarily deactivate to avoid participating in a particular SNS decentralization swap, in practice, if the quality of projects is too low, in the end, the Community Fund will fail to attract new capital.

  3. More generally, if unsuitable SNS projects fail and stumble, especially as the SNS framework is just emerging, it will undermine its reputation and slow its adoption, in turn slowing down the development of the ICP economy, reducing the capital available for mature projects, and depriving important future projects of access to decentralized funding. If early SNS projects become rug pulls, it would be even more harmful, especially since the framework is designed to prevent that happening, and replace the largely failed ICO paradigm.

We are the custodians of the future decentralized economy that can democratize access to the tech economy and deliver huge positive impact around the world, especially in places where venture capital growth funding is very hard to come by. Despite the widespread and urgent needs of projects seeking funding today, we must tread carefully, and not use the SNS to fill the gaps that might better be filled by a VC-SNS, say. We must hold the line, go slow and steady, and build a sustainable economy that is a beacon to the decentralized world, and not throw it away with missteps under pressure. The plan will work, and we must not risk the future.

With all that in mind, here are criteria we need to think about with respect to the assigning projects to an SNS and running decentralization swaps:

  1. Technology. What is already running? Is it something we can see is compelling, because we can actually try it out!? Is this something with legs, which we would be proud to have running in a fully decentralized way as part of the Internet Computer blockchain in the mode of a protocol?

  2. Real users. Does the project already have some reasonable number of users that helps prove its value? There are many projects on the Internet Computer that have significant numbers of users to choose from. Users provide proof that a project is viable and ready for the next stage.

  3. Tokenomics. Projects that are fully decentralized require sustainable tokenomics. This is what will drive their micro-economies, bringing in new users, and helping them grow over the long-term. It is non-trivial to create working tokenomics. At the least, the project should be able to explain clearly the tokenomics that could be created using SNS governance tokens.

  4. Team. Who are the engineers/entrepreneurs behind the project? What are their capabilities? Where can we actually see what they have built, because that’s the only real way of knowing they are capable of. Generally speaking, in the years I have been an entrepreneur, I have seen team after team that is convinced that if they were provided funding they could build something great, then falling on their face when they received funding. Building is hard. People give up or start arguing. They flame out. For these reasons, in my view, projects and teams should show they can build, and that they have the relentless determination required. People can build in their spare time. Single-minded developers and entrepreneurs get shit done one way or another, often without any funding at all, running on empty, and fueled with pure determination. These are the projects that become winning bets when afforded funding because it just helps them accelerate what is already working. This is something we need to require if we want to create a thriving decentralized economy that lights the way for the rest of crypto and Web3. Riskier bets should be the domain of grants, seed funding and VC (or VC-SNS) funding.

The SNS provides an incredibly powerful new tool for projects that are growing and wish to run as open internet services. It is revolutionary. But, we need guidelines and standards.


I wonder if some developers looking for something “more stable” for their project if they can’t get funding would donate or give control of the project to the SNS-1 Dao’s control because it’s already existing on the SNS :white_check_mark: and could possibly fund the developer & project if structured creatively :white_check_mark:. SNS-1 can control multiple projects.

Discuss on OpenChat perhaps and any serious interest please submit your proposal to the SNS-1 with the terms to transfer control of your project for consideration of the Dao.

ICP Coins - Internet Computer’s Best Dex Aggregator is an example of a project that submitted a SNS-1 Proposal and was accepted by the SNS-1 Dao and the developer turned over control of the project to the Dao.

If you’re not familiar with the SNS-1 Dao we specialize in strategic long-term planning. If you love Dfinity’s 8-year gang you’re gonna love the SNS-1’s 100-year gang! Come join us and grow Internet Computer together at SNS-1 Dao!

1 Like

We need more of this from you Dom. I know you’re a super busy man but this is the sort of post that gives me renewed confidence in DFINITY’s vision for the network. I really appreciate you sharing your thoughts on this topic with us.


This is a powerful and timely message.

There are several fabulous dApps on the IC with teams bursting with integrity that have consistently demonstrated the capacity to deliver roadmap milestones.

A VC-SNS would get my vote.


Thanks Dom for an inspiring post. The IC will prevail and anyone investing now will be greatly rewarded.

I agree with you that the SNS should maintain a high bar, and in a separate thread Dfinity has provided some helpful guidance for projects on what they need to achieve and disclose before they SNS.

However, I think potential investors and users need a bit of help to understand the viability of projects and disclosures. Ideally, there would be an independent entity that would assess and grade projects before they SNS according to a set of established criteria.

For example, Sonic wants to SNS. They are an awesome DEX that’s live with users that love their product. On the other hand, they have not done a security audit yet, and under these circumstances, I’d appreciate a third-party’s opinion on the quality of their code-base.

It’s likely too early to start demanding third party assessments. Let’s survive and thrive first. But I do think that would be a great thing to strive for.


Wonderful, inspiring and galvanizing post @dominicwilliams.

About your SNS point, I agree 100%.

About the first part of your message : the contextualization, here are my 2 cents :

I think our bad start can become a strength : since we can’t count on the current Web3 investors, VCs and press, since we are “doomed to walk in the shadows”, let’s go to whisper to the entities currently deaf to the web 3 and by consequence still not unbiased : let us approach big companies not yet introduced to web 3, but which will join for profitability. The WEB 3 companies are corrupted ? So be it, let us talk with the outsiders, not yet corrupted, without any partiality for a chain or against a chain.

May I give one simple example ? Let us consider Disney, with their brand new game Disney Dreamlight Valley. As we know Disney is in some profitability trouble right now, but they count a lot on their game to generate some traction. They already designed a game functioning with collectibles, skins, accessories and above all : a (not crypto) currency called “moonstones” usable in the game but also on their store (the money is currently earned in the game or bought with fiat). Let us show them how the web3 could be good for their game, and how to make their currency a crypto currency. They ll be approached sooner than later. Let us go to them before they looking for some chain or before some chain looking for them. ICP could be easily the chain making them reaching the next step.

I could give you other examples of companies not yet influenced by the corruption of the web3 space you described and with huge challenges coming, but also industries : for example, the pornographic industry is about to be censored in France – and soon in other European countries – because they could not figure how to prevent children from watching it easily thanks to a proof of age working anonymously like you could provide (simple example, because I can understand that Dfinity does not want ICP to be associated with pornography as soon as now, but you get my point). Both the industry and the country would praise the solution to this problem :

  • the pornographic industry, because their sustainability will be threatened ;
  • the country, because they don’t want to lose the huge taxes paid by this industry because of the huge revenue they generate. The country doesn’t want to censor and tried to find a solution by themselves, but could not.

The current web 3 ecosystem doesn’t like ICP, fears it or hate it ? So be it : ICP will reach the web2 companies having interest to join web 3.

But besides companies, as described above : we could help countries and regions finding some solutions (like you did with federitaly or could do with France for example), but also top rank charities wanting to raise funds and setting a DAO, like UNICEF).

The utility of our chain will have to precede the hype, whereas the other chains’ hypes precede their utility (or their uselessness) ; let us be the chain of the current web3 agnostic entities and people : the ambassador and the introduction to the web 3.

In conclusion : the Web 3 is corrupted ? Let us hunt on other lands : let us help the not yet Web 3 entities to integrate web3 (governmental, non-governmental, private, public). Let us initiate their interest to do it.


It’s a difficult topic because we all want to see every IC project supported and doing well - saying to projects ‘your not ready’ is tough, but it would be worse to let them jump into something they aren’t setup for. My worry is that short term thinking will drive people to want ANY SNS now (gimmie tokens) flip for 1-2x and then move on. This isn’t good for the long term development of the IC.

SNS is gold tier, we should be looking for Distrikt/ Open Chat levels of development work done. There are other options for raising funds (Funded/ Cig DAO/ Dfinity) to help get to this level.


There should be more DAO’s for funding. SNS should be the final step since you are giving up all control. I wish we could have more DAO like structures that the community sets up as a form of VCs, maybe as a blackhole canister that is verified and allows for community funding before SNS.


The community fund is currently a blunt, inflexible tool in terms of whether or not it chooses to deploy its maturity into an SNS.

The current fear is that there is a race for projects to SNS as soon as possible to take advantage of a community fund that is flush with ICP, rather than when those projects are actually mature enough and ready to decentralize. These projects are racing to the SNS for 2 reasons:

  • They are running dry on cash and/or their initial investors are demanding a quick turn around on investment via the SNS
  • There is a fear on my end, and from others that I’ve spoken with is that the community fund will have far less ICP available after the first wave of SNSes.

Projects should be SNSing because they are mature and ready, not because they are broke - once an application has SNS’d, it becomes even harder to recover from bugs…especially if the project has rushed their SNS preparation.

Therefore, DFINITY has an obligation to protect the community fund participants and give them the independent opportunity to “opt-out” of certain SNSes that they do not wish to fund.

Edit: @bjoernek has provided some helpful information regarding the intricacies of how one can opt out of and back into investing in different SNSes if you are part of the community fund:


I hope that this discussion is on-going and thank you for brining a great post.

Speaking from the other end of the table, I see a distinct need for the early SNS projects to be for the community. Profiteering of any sort is likely to result in bad incentive structures and motives for an SNS. DAO builders are going to need to be ‘NPO minded’ — you contribute because it is a passion not because you have ‘retire early’ fantasy.

  • Transparent. SNS means open-source. No secrets. You are building in public.

  • Additive. 100% on-chain. This requires a bit of work, understanding of the platform, and additively contributing to it. Any of this work if open-sourced can be reusable within the ecosystem. Teams that do not demonstrate willingness to work in the larger ecosystem are immediately suspicious from my perspective.

  • Transformative. The world is brutal during bear markets. SNS projects should draw attention by pressing the buttons that people simply cannot ignore. This is ‘xyx’ just on the IC, type pitches exist… but should be added to before SNS. What new thing are we contributing into the larger web3 space with this project? i.e. ‘This is Search for the IC’ could be this: ‘an NPO focused on promoting and building innovative ZKML technologies for on-chain search and data analytics.’ We can make the VC and tech world envious as our decentralized projects rip the lids off low-gusto greed consumed alternatives. We are very good at research and product within the IC community, early SNS projects should reflect that to the world. Everyone interested in SNS DAO should offer ideas to better roadmaps.

  • Guidelines and standards. The last thing on my list would be willingness to do the ‘right procedures’. There is already a rough template forming for this. Teams need to do XYZ steps, SNS configs, open-source, and engage with the community. This portion should weed out a lot of half-hearted attempts. Also the ‘right procedures’ for the respective developer organization region: geo-blocking and public disclosures help with this. Lastly, the ‘right procedures’ for specific app needs: security audits (paid or community driven) for high-risk dApps.

All SNS projects, the community, the IC, and the success of web3 are tied together with an invisible string.


You say it is critical that SNS will succeed for people to trust the concept. As I agree that we should have a sudden quality of projects able to enter an SNS, I think we have to also consider that we actually are in thge front seat to invest in promising companies.

Something that we “normal” users are not eligible for, only for VC’s and people with the right connections. And not all investments moon, neither the ones VC before SNS invested in, but they often only need one unicorn to take home the loss of the 95% who fails.

So I think we should accept that most SNS most likely will fail, but a few will be setting a new standard. We might be early investors in the next big SoMe or AI project not seen yet… but we will fail in our investments on the way to hit the jackpot.

I’ll defiantly do my due diligence on each SNS project and can already reveal out of the next 5 rumoured launches, I’ll only invest in 2 of them.


Hello Mr Dominic! This is my current understanding of SNS or IDO as an individual investor: public chain technology is very important, but the success or failure of the ecological project SNS will greatly affect the ranking of ICP in the global public chain. I have some suggestions:

1). In other public chain IDO projects, people can refer to the world’s most reputable venture capital as a reference, for example: a16z, polychain! Given the current sns environment of IC, it is true that some well-known venture capitalists need to participate in order to inspire people’s investment enthusiasm, but as you said, mainstream venture capital may not want IC to achieve brilliant results! The reasons why I hope that the dfinity foundation can play this role temporarily: 1. It can boost the confidence of some hesitant people 2. The success rate of sns will be significantly improved 3. Some lazy people may follow the investment! Even if there is no help from funds, maybe some project reports can be made to help the SNS project get out of the bear market

2). Can ICP’s 8-year growth rate be reduced? The 8-year pledge does not bring meaningful help to ICP. On the contrary, the high inflation rate of 18% may scare off potential investors, or is it possible to burn ICP in any way to reduce the inflation rate?

3). I think that the IC ecological project needs to establish an experience survey team. This survey team can discover the potential cooperation between the various ecological projects of IC and point out the potential deficiencies of the ecological projects. For example, many ecological projects can be integrated with openchat and established as a service It is also helpful to retain user groups and bring active population to openchat and projects. For example, bitfinity wallet can integrate openchat, and users can get some help in using the wallet, and all three parties can benefit! According to my observation, various ecological projects of IC may join together to overcome the difficulties of the bear market. Similarly, many ecological projects are not very united for some reason. For example, the login wallet is not friendly. Some projects support the login of this wallet, and some projects support the login of another wallet. Feedback and make improvements, which creates a downward spiral of user experience! The survey team can help the project party to collect some potential user experience suggestions and feedback to the project party as a reference.


This is a very frank statement

I love hearing this thing because it represents the reality that determines the future of technology

Attention to the economic system of the project is an unavoidable basis, but at the present time it has become what determines failure and success in the presence of competitors who use this method for shady marketing and bringing in users with financial interests

:pray: Love what you do dom keep going


Yes, in principle the SNS-1 DAO could act as a VC DAO and start “incubating” projects somehow. This would be a good thing for SNS-1 to explore imo


Yes, we are working on adding zk properties to II, and they could be HUGE because they can verify people’s age and country of origin without compromising their anonymity. In fact, it can not only solve looming regulatory problems for adult and gaming industries, but help them with growth, since nobody wants to upload a scan of their passport or other PII to these services.


I would like to point out that this is already possible today. If a CF neuron leaves the CF during (or before) the voting period of a given SNS launch, this neuron will not participate in the particular SNS launch. As a result the overall CF contribution will be scaled down proportionally as described here. Of course this could be refined further, but the core functionality giving the CF neurons full flexibility is already available.


A few VC SNS-1 DAO solutions come to mind:

  1. SNS-1 is set as the controller of app canisters, and in return, provides funds from its treasury. Later, when the app launches with SNS, SNS-1 ensures that it will receive its share. Pros: SNS-1 is guaranteed a share if the app launches. Cons: It is challenging for app developers to set this up, and SNS-1 has full control.

  2. A smart contract is established between SNS-1 and the developers. Both devs and SNS-1 need to sign any changes to the contract. The smart contract then becomes the controller of the app and facilitates its launch. Pros: The interests of both parties are assured. Cons: This approach is difficult to implement.

  3. App developers create an SNS-1 proposal, and if accepted, they receive funding from its treasury. The app developers maintain control over their canisters. Once they attempt to launch SNS, the NNS will ensure that promises are fulfilled. If not, it will prevent the app from launching. Pros: This process can start today. Cons: It involves the NNS.

However, if app developers decide to deploy their app in new canisters and avoid their obligations from 1 and 2, then again the NNS will only be able to enforce the contract.


SNS actually solves all the DAO and ICO issues.
But again, despite the greatness of SNS functionality, still is not the key to success.

Plain translation would be that SNS will be kept for top projects, and although the decision of which projects are top is decentralized through the NNS, we’ll be all waiting to see if Dfinity supports it, hence Dfinifty has the final decision for who gets in the SNS.

Developers and investors then need a different tool to make their “ICO’s” outside the NNS-SNS. Funding promises with NFT’s doesn’t cut it

It looks like we will have multiple overlapping SNSes over the next few weeks. How can a CF neuron opt out of one SNS, while participating in others?