Rising Tide Mechanism

The Rising Tide Mechanism is the citizend platform's innovative mechanism, optimizing for community distribution while enabling price discovery, to ensure a healthy token distribution for projects, and a fair allocation for all contributors and community backers.

When projects submit an application to list in the citizend platform, they set up three parameters:

1. The amount of total token supply allocates

2. The minimum target amount they want to raise

3. The maximum target amount they want to raise

The Rising Tide Mechanism optimizes for maximum community distribution, while allowing for price discovery between the min. and max. target raise amounts set by the project.

Based on the amount of contributors and desired contribution of each individual (as well as the share of CTND tokens staked by each individual in the Stakers' Half), The Rising Tide Mechanism calculates the maximum possible allowed allocation for each individual, which is set to be the same for all contributors of each pool. It is important to consider that not all contributors need to contribute the same amount, and their allocations may be below the maximum possible allocation given.

The example below shows the 3 possible scenarios than can take place:

Please notice that the parameter numbers in the example below are simplified for illustrative purposes and they are obviously not representative of the expected parameters set by projects in the citizend platform.

• Scenario 1: Total desired contribution by all contributors is higher than the maximum target raise amount (e.g. Total desired = $55, min. = $20, max. = $40). In this scenario, the project tokens will be distributed and the project will be able to raise their desired max. amount of $40. The Rising Tide Mechanism will trigger, and while all contributors (users) will receive an allocation, some contributors will be given a maximum possible allocation amount below their desired contribution.

• Scenario 2: Total desired contribution amount by all contributors is higher than the minimum target raise amount, but lower than the maximum target raise amount (e.g. Total desired = $35, min. = $20, max. = $40). In this scenario, the Rising Tide Mechanism will not trigger, and each contributor will get their desired allocation (also considering their maximum possible allocation in the Stakers' Half based on their share of staked tokens)

• Scenario 3: Total desired contribution by all contributors is lower than the minimum target raise amount (e.g. Total desired = $15, min. = $20, max. = $40). This is the last scenario, in which unfortunately, even though a project secured a contribution slot, they didn't manage to secure enough commitment from the community, and therefore are not able to launch, and will have to list in a future Discovery Batch if they want to participate again. The main reason for this mechanism, is to avoid a project to distribute a significant amount of their supply, below the minimum target raise amount they desire.

Please notice the Rising Tide Mechanism is applied to both the Voters' Half and the Stakers' Half. While the initial parameters (volume, min amount, max amount) are split equally between both halves, the implied price per token and the max possible allocation per individual may differ based on the amount of contributors and their desired contributions. Each project's contribution half may fall into a different one of the above scenarios, and the Rising Tide Mechanism will be calculated separately for each half.