Fund Rules

1. Introduction

Project Catalyst is a growth engine and a grants program for the Cardano blockchain ecosystem (“Cardano”) that has funding rounds every few months, with a set amount of ada ready to allocate to ideas. At the start of each Fund, members of the Cardano community (referred to in these rules as “the community”) submit proposals in response to categories published on the Project Catalyst platform. The community votes and funding is allocated to winning projects to bring the projects to life. For Fund12, the following categories are available for proposal submissions:

• Cardano Uses Cases: Concept, MVP, Product

• Cardano Open: Developers (technical) & Ecosystem (non-technical)

• Cardano Partners and Real World Integrations

Each of these categories have their own relevant sub tracks. Full relevant detailed briefs can be found on the Project Catalyst platform.

1. Purpose of this document

These rules apply to each individual or entity participating in a project proposal, whether as an applicant, as co-participant with other individuals/entities or as a project team member (“Project Participants”) and other participants in Project Catalyst, including Community Reviewers and Community Moderators (together with the Project Participants, “Catalyst Participants”). These rules reflect the mission of Project Catalyst to benefit the Cardano ecosystem, learning from previous funding rounds of what works and what could be improved.

All Catalyst Participants must comply at all times with these rules and any additional terms and general guidance made available by the operator and administrator of Fund12 (the “Fund Operator”).

Breach of these rules, whether at the proposal stage or during the course of the project may lead to suspension or termination of funding and rewards. See the Project Catalyst Terms and Conditions for more details.

1. Eligibility criteria - who can apply for funding?

Anyone with an idea that positively impacts the Cardano ecosystem can and may submit a proposal on the Project Catalyst platform, subject to the conditions set out in these Fund Rules.

(i) Project Participants may only participate in a maximum of 6 Catalyst proposals across all categories in any one funding round.

If a Project Participant is included on more than 6 proposal submissions, only the first 6 published entries will be eligible for funding. Where a Project Participant is a legal entity or group of individuals, regard shall be had to whether the same teams/individuals and/or the same key project stakeholders are involved. Project Participants acting as subcontractors shall also be limited to 6 proposals in Fund12, including any other proposal submitted as the lead or co-participant directly.

All Project Participants must disclose their role and scope of services across any submitted proposals, even if they are not in the lead or co-proposer role, such as an implementer, vendor, service provider, etc. Proposals that fail to disclose accurate information about their Project Participants may be disqualified at any point of the Catalyst process.

(ii) Project Participants must not be party to or be directly involved in any active projects funded in Fund9 or prior.

Any such outstanding projects must be successfully completed by following the project close-out procedures before the start of the Community Review stage (described below) in Fund12;

(iii) Project Participants with active projects funded in Fund10 are only eligible to submit to Fund12 if each active project has submitted and approved at least one Proof of Achievement in the last 6 months preceding start of Fund12 submission period;

(iv) All Project Participants must be aged 18 or over and will need to complete onboarding requirements, including an identity verification process.

1. Funding: What types of projects are funded by Project Catalyst?

Project Catalyst is aimed at helping a wide range of individuals, groups, or legal entities to grow by funding the best ideas that have the potential to positively impact the Cardano ecosystem.

Proposals must:

• Be complete and accurate at the time of proposal submission;

• Be for the betterment of the Cardano ecosystem;

• Be ready to start the project once the Fund results are published;

• Have an expected completion date at 2 to 12 months from award;

• Identify at least 2 project milestones plus the final one including Project Close Out Report and Video;
• Be willing to publicly share evidence of achievement and outcomes with the community; and

• If declaring the project is open source in the application form, the project should be open source-available throughout the entire lifecycle of the project with a declared open-source repository.

Depending on the category, project funding can be requested for various stages of technical innovation and software development, from feasibility studies through to developing and testing prototypes or fully fledged features. Proposals can be to develop a brand new product, service, technology-enabled process, or to take an existing technology product or service and further develop it beyond existing capabilities. Project Catalyst funding requests can also be focused on ecosystem and community-building activities, events, content, or social endeavors that help to onboard and educate new users about Cardano.

The key requirements for all requests for funding proposals is that the project is for the broad benefit of the Cardano ecosystem and there are well-defined deliverables and outcomes for each project that can be measurably verified by the community.

Examples of projects that will not be funded by Catalyst include:

• Projects that do not benefit Cardano in a way that aligns with Catalyst’s mission and scope;

• Projects that are not legal within the jurisdiction where the work is taking place;

• Projects intending to use Catalyst funding to purchase financial products or services including trading, investments, lending, providing token liquidity and similar activities; and

• Projects intending to use the funds to offer a grant as funding for 3rd parties.

1. What can funding be used for?

Funding must be used exclusively for the development and implementation of Project Participants’ proposed projects. The following is a list of examples of what Catalyst funding may be used for:

• Labour & subcontracting costs (i.e., staffing to deliver the project)

• Overheads (typically provision of computers, desks, office space, IT infrastructure and software services)

• Materials costs (costs of materials to be used directly on project are eligible costs, purchased from third parties)

• Hackathon prizes

• Bounty rewards

• Travel costs

• Venue hire and production costs

• Training costs

• Market assessment and business intelligence

• Licensing in technologies

1. How much funding can I ask for?

Project Participants may only request funding in ada.

There is a minimum and a maximum amount of funding that can be requested in a single Catalyst proposal. These are outlined below for each category:

Minimum Funding Amount per proposal:

• Cardano Uses Cases: ₳15,000

• Cardano Open: ₳15,000

• Cardano Partners and Real World Integrations: ₳500,000

Maximum Funding Amount per proposal:

• Cardano Uses Cases:

  • Concept: ₳100,000

  • MVP: ₳300,000

  • Product: ₳500,000

• Cardano Open:

  • Developers (technical): ₳200,000

  • Ecosystem (non-technical): ₳100,000

• Cardano Partners and Real World Integrations: ₳2,000,000

Minimum and maximum funding caps help drive the predictability of how many projects will likely be funded in a given round and support the estimation of ongoing costs for community-reviewers to participate in project accountability management, where the pool of community reviewers help to verify that milestones are being achieved and are rewarded for their contributions.

Introducing minimum and maximum funding levels and maximum project length also helps to avoid scenarios whereby very large sums are approved without voters' confidence and truly understanding the feasibility of highly complex, multi-year technical projects, or in cases where proposals request very small amounts of funding which cannot deliver genuine value to the Cardano ecosystem.

Funding is provided by way of a grant only. Proposals that request alternative funding arrangements, such as loans, will be disqualified.

1. How long can my project be?

Projects must be capable of completing all milestones within 12 months from project award.

1. What are the key steps of the funding process?

The funding cycle involves the following stages:

• Innovation submission: Project Participants submit initial proposals on Ideascale in compliance with category briefs listed there for each category. Community members share ideas and insights on Ideascale to help refine the proposals.
• Community Review: Community Reviewers provide opinions about the submitted proposals and rate them against the criteria which can be found in the Community Review guidelines (which will be made available ahead of the Community Review stage) on Catalyst Gitbook.

• Moderation: Community reviews are checked by moderators to make a determination whether reviews that were flagged by the Catalyst scripts should be published or discarded altogether.

• Voting: Community members vote using the Project Catalyst voting app. Votes are weighted based on voter's ada token holding.

• Results: Votes are tallied and the results published in a Fund Results guide.

• Onboarding: Approved projects will undergo an onboarding procedure which includes, without limitation, creating a finalized Statement of Milestones schedule.

• Funding: Projects receive funding along with further guidance. Approved Project Participants are required to provide regular proofs of achievement to the community, which ensures funded projects are accountable to their voters. See Section 17 for more details.

1. How do I submit a proposal?

Project Catalyst relies on the ingenuity of a global network of participants. Proposals may be submitted by completing the Proposal Submission Form available here. Proposals may be initially submitted in draft form and finalized at any time before the final submission deadline. Proposals that are not complete by the final submission deadline will be archived and will not be submitted to the community for voting. Kindly submit drafts once you are ready to proceed with enough context for the community to be able to provide tangible feedback. Proposal submissions with insufficient detail or information added across all fields are at risk of being archived at any time without notice.

1. What are the proposal requirements?

Proposals must be submitted via cardano.ideascale.com by completing the proposal Submission Form and demonstrating the proposed idea’s ‘impact’, ‘feasibility/capability’, and ‘value for money’. URLs and images can be embedded as part of the proposal submission.

Submitting the same proposal into multiple challenges or categories in the same funding round is not permitted and only the most recent submission will be considered. A project proposal can only be funded to deliver the project once. If a duplicate proposal or a separate proposal with the same deliverables is awarded, the Fund Operator will terminate one of the projects in its entirety, together with all future payments for that project with immediate effect. Please see the Suspension and Termination of Catalyst Grants policy here for further details.

Project Participants must ensure that their proposal and all other materials relating to the project do not infringe any intellectual property rights and do not contain any confidential or proprietary information.

1. What is the review process?

One of the roles of the Fund Operator is to ensure that these rules are complied with by all Project Participants. If proposals are submitted to the wrong category or evaluated to be in breach of these Fund Rules, the Fund Operator will require Project Participants to resubmit their proposal to an alternative category or to withdraw their proposal, before Community Review ends. Project Participants are strongly advised to match their proposals to suitable challenge briefs as much as possible or to seek guidance to avoid any surprises.

Proposals are also reviewed by Community Reviewers. These are members of the community who volunteer to provide their opinion and feedback on proposals in exchange for a fee. Community Reviewers play an important role in the Catalyst funding process by providing information which can be used by voters to inform their voting decisions. Community Reviewers also offer feedback to Project Participants by providing rationale for their scores.

Community Reviewers will read a proposal and assign it a score between 1 and 5 for each of the 3 criteria (impact, feasibility/capability, and value for money). The individual scores across the three criteria will give an overall score for the proposal.

For each of the three criteria, Community Reviewers are required to give their opinion and rationale in English to explain the score that was given and to demonstrate the reason for doing so. A proposal may receive a low score for various reasons including if the submission form is not complete, the Project Participant cannot be clearly identified or if the project does not fulfill these rules.

Community Reviewers should consider and provide feedback on the extent that proposals meet criteria on their own merits. Community Reviewers should only provide their own opinion. Their review should not be the work of others or an AI-agent acting on their behalf. If a Community Moderator believes that a Community Reviewer’s reasoning does not correspond with the score given, the review will likely be discarded during the Community Review stage (as described in the following section).

1. What is the role of Community Moderators?

The Fund Operator uses automated scripts to identify the following issues for review by Community Moderators:

• A similarity script will be run looking for similarly worded reviews in the current fund and across previous funds. Generic reviews which do not address specific aspects of a proposal will be flagged and potentially discarded.

• A length check will be completed. Reviews containing less than 150 characters for each individual criterion or less than 450 characters in total per review as a whole will be flagged and potentially discarded.

• A plagiarism script will be run looking for similarly worded content from the internet. Reviews which do not address specific aspects of a proposal will be flagged and potentially discarded.

• An artificial agent script will be run by the Fund Operator looking for content that is produced by an AI bot or agent. These reviews will be flagged and potentially discarded.

• Reviews that display copy/pasting of templates without thoughtful contribution of value specific to the proposal will be flagged for review and potentially discarded.

Reviews that are flagged by the automated scripts are referred to Community Moderators for further assessment. Community Moderators may discard reviews which are not authentic and which do not comply with these rules and the Community Reviewers Guide.

An additional ‘spot check’ will be performed by Moderators, who will be provided with a small number of reviews made by community reviewers that were not flagged by scripts. This helps minimize potentially adverse behaviors, only discarding reviews which do not comply with these rules and the guidelines provided in the F12 Community Reviewers Guidelines.

The vast majority of reviews are people’s genuine opinions and these will be included in the voting process to help inform voters about the opinions of Community Reviewers. If a review is flagged, there is likely a reason attributed to the flag and information about which reviews and reviewers were flagged and discounted will be published in the Catalyst Gitbook.

Appeals from Community Review Moderators (experienced reviewers) are not currently implemented.

1. How does voting work?

Voting in F12 will be a Yes/Abstain mechanic for all categories. No downvote option will be available. This change provides a simpler decision making procedure for voters sincerely expressing their preferences. Please refer to Fund12 Operating Parameters published on docs.projectcatalyst.io for more details.

Proposals are ranked by the number of Yes votes received from the community and funded one by one until that category budget is exhausted. If the amount requested by a proposal is larger than the remaining amount of funding in that category, it is skipped.

Any leftover funds will be used to fund the highest ranking projects across all categories except the ‘Cardano Use Cases: Product’ category and ‘Cardano Partners and Real World Integrations’ category.

Leftover funding will only consider projects that have a maximum of one funded entry in Fund12. If approved Project Participant has already two or more projects approved for funding in Fund12, no additional projects will be awarded funding to the Project Participant. This approach is intended to place greater focus on grassroots early stage or open-source developer projects instead while allowing an even more diverse distribution of funding.

In the case of ‘Cardano Partners and Real World Integrations’ category, in an event of no confidence ruling by the sub-committee in the proposals submitted, such as they’re not of high enough quality to meet the objectives of the category brief, then funds will be rerouted equally to the Cardano Open categories.

1. Who can vote on proposals?

On completion of the Community Review Stage, the community of ada holders are given the opportunity to vote for their favorite proposals to receive Catalyst funding. Proposals will only receive funding if they garner sufficient votes from the community. Any ada holder with a minimum of ₳450 can vote on a proposal by downloading the voting app from here. Votes are weighted depending on the amount of ada each voter has.

1. Where are voting results published?

Results of the community vote are published by the Catalyst team via projectcatalyst.io web once the tally stage is complete.

1. Onboarding of approved proposals

If an application for funding is approved, then the applicable Project Participants will be notified by email of the steps to be completed as part of the onboarding procedure. The onboarding procedure is intended to confirm a Project Participant’s compliance with these rules and any additional terms or specific conditions of the grant, in addition to these rules, that the Project Participant must follow.

Once the vote has concluded, during Project onboarding, Project Participants will also be required to submit a Statement of Milestones that sets out the milestones and deliverables to be accomplished by the Project Participants during each stage of the project which will be reviewed and approved by Milestone Reviewers before funding is initiated. All proposals must include at least 2 milestones.

Project Participants must complete the onboarding process before the project can start. Failure to complete the onboarding procedure within 60 days of award notification may result in the grant being withdrawn.

1. Payments and Reporting

Upon completion of the onboarding process and verification of the Statement of Milestones, approved projects will receive an initial payment covering the first milestone. All funded projects will be required to adhere to the Statement of Milestones set out in their proposal. Before funding for the next milestone is released, projects must provide evidence that the milestone for which they have already been paid has been achieved. This is known as Proof of Achievement (PoA). It is the responsibility of the lead Project Participant and funded-proposer’s team to submit Proof of Achievement to the community and the Catalyst team for verification and approval before funding for the next milestone is provided.

Each project will be required to submit a relevant report which documents that progress is being made on the project. The Catalyst team must be notified immediately if there are reasons why the project has paused or will not deliver what was voted for and approved by the community.

Failure to comply with reporting requirements to demonstrate adequate progress may result in funding being suspended or terminated.

Before the final payment is released, approved Project Participants must also provide a “Proof of Project” report and “Proof of Demonstration” video. Further details about the content and format of this documentation will be provided to each Project Participant during onboarding.

Project details, progress reports, and Proof of Achievements will be published on the Catalyst Website at www.projectcatalyst.io and will be publicly available.

1. Unspent and Excess Funds

There may be unspent or excess funds available from total budgeted funds for any given funding round. This may be the result of various reasons, including but not limited to parameter outcomes (e.g., difference between forecasted and actual budget allocation), cancellations/terminations, refunds, or failure to follow relevant procedures (e.g., during onboarding). Such events present an opportunity for efficient reallocation of available funding amounts where applicable to maximize the positive impact of the Catalyst program. In all other cases, the funds will be retained by the Catalyst Treasury.