Institutional Node Modelling

Watchtower, Institutional and Developer Node Modelling

This chart illustrates the cumulative issuance projections for three types of nodes: Watchtower, Institutional, and Developer nodes.

Here’s an explanation of the trends:

1. Watchtower Nodes:

• These nodes are critical for compliance, monitoring, and governance. Their issuance spikes early on to ensure the network’s security and oversight from the beginning.

• The total number of Watchtower nodes plateaus around 2,000 after a rapid initial rollout in the early years.

2. Institutional Nodes:

• Institutional nodes are targeted at financial institutions, governments, and other licensed entities. Their issuance also spikes early, reaching a plateau of around 1,500 nodes.

• This reflects a focused effort to onboard major institutional players at the protocol’s launch and during its initial growth phase.

3. Developer Nodes:

• These nodes support ecosystem growth by enabling development and expansion. They start with modest issuance but experience exponential growth over time.

• By the 10th year, Developer nodes dominate, surpassing 20,000 cumulative nodes, reflecting the increasing demand for development as the ecosystem matures.

Key Insights:

• Early Focus: The initial strategy emphasizes building a secure and compliant foundation (Watchtower and Institutional nodes).

• Long-Term Ecosystem Growth: Developer nodes take precedence in later years, indicating a shift towards ecosystem scalability and decentralized application development.

• Capped Issuance: Watchtower and Institutional nodes are capped to ensure a balanced network, while Developer nodes scale with the ecosystem.

This projection aligns with a strategy of launching with strong institutional and compliance backing, followed by robust ecosystem growth through developer support.

This detailed chart provides a comprehensive visualization of the financial model based on issuance projections:

• Watchtower Nodes: Plateau at 2,000 nodes, with a cumulative issuance value of $2 billion.

• Institutional Nodes: Plateau at 1,500 nodes, with a cumulative issuance value of $300 million.

• Developer Nodes: Surge to 20,460 nodes, with a cumulative issuance value of $2.046 billion.

Here’s an updated set of assumptions and scenarios to align with the node issuance projections and financial models previously created.

Updated Assumptions and Scenarios

1. Baseline Assumption

• Direct Monetary Contribution Ratio: The entity must bring value equal to a multiple of the node price (e.g., 3x to 7x for Watchtower and Institutional Nodes, and 2x to 4x for Developer Nodes).

• Indirect Value: Includes transaction volume, ecosystem partnerships, regulatory influence, or significant innovation that expands the protocol.

2. Value Requirements by Node Type

a. Watchtower Nodes ($1 Million Each)

• Purpose: High-value nodes for governance, compliance, and oversight.

• Contribution Multipliers: A Watchtower Node holder must bring 3-7x the node price in on-chain value.

• 3x Scenario: $3 million on-chain contribution.

• 7x Scenario: $7 million on-chain contribution.

• Examples of Contributions:

• Adoption by a national government or regional regulatory body.

• Commitment to provide liquidity or transaction volume worth $3M-$7M.

• Hosting critical compliance or security functions for Zekret.

b. Institutional Nodes ($200K Each)

• Purpose: Targeted at licensed financial entities and strategic partners.

• Contribution Multipliers: An Institutional Node holder must bring 3-7x the node price in value.

• 3x Scenario: $600,000 on-chain contribution.

• 7x Scenario: $1.4 million on-chain contribution.

• Examples of Contributions:

• Tokenization of $600K-$1.4M in securities, bonds, or compliant assets.

• Introduction of financial services generating equivalent transaction volume.

c. Developer Nodes ($100K Each)

• Purpose: For expanding and building the protocol ecosystem.

• Contribution Multipliers: A Developer Node holder must bring 2-4x the node price in value.

• 2x Scenario: $200,000 on-chain contribution.

• 4x Scenario: $400,000 on-chain contribution.

• Examples of Contributions:

• Launching a dApp or service generating $200K-$400K in ecosystem activity.

• Providing innovation or development resources worth the required contribution.

3. Total Value Required to Qualify

The cumulative value required from each type of node holder reflects their proportional issuance in the projections:

Node Type	Total Issued	Price ($)	Contribution Multiplier	Cumulative Contribution
Watchtower	2000	$1M	3x-7x	$6B-$14B
Institutional	1500	$200K	3x-7x	$900M-$2.1B
Developer	20460	$100K	3x-7x	$4.1B-$8.2B

Updated Strategic Considerations

1. Weighted Ratios by Contribution Type:

• Monetary Value (Liquidity, Assets): 40%-60%.

• Strategic Partnerships (Regulatory, Adoption): 30%-40%.

• Ecosystem Contributions (Innovation, Volume): 10%-20%.

2. Long-Term Ecosystem Development:

• Governments and institutional partners may justify a lower initial threshold if their involvement boosts long-term protocol credibility.

• Developer nodes will dominate long-term issuance, ensuring scalability and innovation for the ecosystem.

3. Node-Specific Adjustments:

• Exceptions may apply for impactful contributions, such as onboarding a government issuing $50M in tokenized bonds or developing a dApp driving $10M+ in volume.

Alignment with Charts

• Watchtower Nodes: Issuance is capped at 2,000 nodes, requiring significant regulatory and compliance-driven contributions.

• Institutional Nodes: Capped at 1,500 nodes, ensuring strategic partnerships with financial entities.

• Developer Nodes: Experience massive exponential growth, aligning with their role in building the ecosystem as the protocol matures.