canton-foundation · akashgaurav · Jun 29, 2026
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+# Featured App Reinstatement Request
+
+## Summary
+
+This document sets out the request for reinstatement: what led to the pause, the corrective measures taken, and the basis on which the application will operate in compliance going forward. Figures are requested at specific points, but the committee assesses the request as a whole.
+
+Completing this document does not require technical expertise. The on-chain figures requested can be drawn from the public explorers listed in [Section 8](#8-sources-and-explorers), and the ecosystem partners referenced there can assist where help is needed to collect or interpret them. Where a field does not apply, `N/A` is stated with a brief reason.
+
+> Submit as a pull request adding `reinstatement/alpend-2026-06-29.md`.
+
+---
+
+## 1. Applicant Details
+
+| Field | Detail |
+|---|---|
+| **Organisation name** | Palladium Labs |
+| **Link to the tokenomics-list email announcing the pause** | <https://lists.sync.global/g/tokenomics-announce/message/341> |
+| **Date of pause (UTC)** | 7 June 2026 |
+| **Does your application share a participant node with other Featured Apps?** | No *(If yes, [Section 7](#7-shared-participant-node) would be completed.)* |
+
+---
+
+## 2. On-Chain Identifiers
+
+List exactly as they appear on-chain; any discrepancy prevents verification.
+
+**Party identifier of the Featured App:**
+
+- **Alpend Issuer**
+  ```
+  google-oauth2_007c108879997188710703622::1220f66f5b1cb78abf40583917b0ea3ce18f546ea5f119de06d0ea1e7d1a250e0f3b
+  ```
+- **Alpend Non-Issuer**
+  ```
+  palladium-validator-1::1220f66f5b1cb78abf40583917b0ea3ce18f546ea5f119de06d0ea1e7d1a250e0f3b
+  ```
+
+**Party (or parties) of the validator node:**
+
+```
+palladium-validator-1::1220f66f5b1cb78abf40583917b0ea3ce18f546ea5f119de06d0ea1e7d1a250e0f3b
+```
+
+**Any further parties used to submit transactions and markers:** No
+
+**Asset issuers — confirmation that the issuer party performs no other function** (wallet, exchange, market making, lending, payment processing), as the guidance requires:
+
+> We have separated all our issuer activities, and any asset-related marker is only submitted through the **Alpend Issuer** FA PartyId. All other app activities and traffic burn-based markers are submitted through the **Alpend Non-Issuer** FA PartyId.
+
+---
+
+## 3. Basis of the Pause
+
+**Our understanding of the basis for the pause:**
+
+The pause arose from concerns regarding marker eligibility and attribution following earlier discussions around CIP-0056 compliance and asset issuer marker activity.
+
+After receiving notice from the Accountability Committee, Alpend ceased submitting asset issuer markers and stopped claiming rewards associated with asset issuance activity.
+
+During the period following remediation, marker submissions were intended to reflect application traffic generated by the non-issuer application party. However, due to a PartyId attribution issue visible on CCView, traffic markers associated with the application party were displayed as issuer-related activity, creating confusion regarding the source and nature of the markers.
+
+We believe this attribution issue materially affected the interpretation of the submitted activity and, therefore, request review of the underlying figures and classifications.
+
+**Underlying figures:**
+
+| Metric | Value |
+|---|---|
+| Reward weight claimed over the period (USD) — activity markers submitted, each one dollar of reward weight | $107,955 |
+| Fees paid over the same period (USD) — traffic purchased to support activity | $96,720 |
+| Period covered (UTC) | 1 June 2026 – 7 June 2026 |
+
+The principle is that claimed reward weight should not exceed paid fees. Where it did, that ratio forms the basis of the pause.
+
+---
+
+## 4. Cause
+
+Describe the specific mechanism behind the issue — what the systems actually did. A soft launch or testing phase does not identify a cause.
+
+**Paused for claimed rewards exceeding paid fees:** N/A
+
+**Paused for marking own or related-party activity:** N/A
+
+**Paused on structural grounds (issuer combining functions on one party):**
+
+Following remediation, Alpend ceased issuer marker activity and stopped submitting markers through the issuer party.
+
+The subsequent concern arose because activity generated by the non-issuer application party was being classified as issuer-related activity within ecosystem reporting tools. This PartyId classification issue remains as of this submission.
+
+As a result, application traffic generated by the non-issuer application party appeared under issuer-related classifications, making it difficult to distinguish post-remediation application activity from historical issuer activity. We believe this contributed to the interpretation that issuer-related activity continued after remediation, despite issuer marker submissions having ceased.
+
+**The structure being adopted:**
+
+- Issuer functions and application functions are maintained separately.
+- Issuer marker activity remains disabled.
+- Application traffic is generated and tracked through the non-issuer application party.
+
+Alpend has implemented additional internal review procedures to verify the source party associated with marker submissions before rewards are claimed and continues to work toward full compliance with all applicable network requirements.
+
+---
+
+## 5. Corrective Measures
+
+Each measure is verifiable on-chain using the identifiers in [Section 2](#2-on-chain-identifiers).
+
+| Measure | Effect | Date Applied |
+|---|---|---|
+| Ceased all issuer marker submissions | Asset issuer rewards were no longer claimed following notification from the Accountability Committee | 31 May 2026 |
+| Stopped using the issuer party for marker submissions | Ensured post-remediation marker activity originated from the non-issuer application party | 31 May 2026 |
+| Separated issuer activity from application activity for reward-claim purposes | Reduced risk of issuer-related activity being included in Featured App reward submissions | 31 May 2026 |
+| Began migration to the Digital Asset utility registry structure | Aligns asset issuance with CIP-0056 requirements | 25 June 2026 |
+| **Marker submission rule:** only activity generated by the non-issuer application party may be submitted for Featured App rewards | Prevents issuer-related activity from being included in Featured App reward claims | Current operating procedure |
+
+---
+
+## 6. Basis for Continued Compliance
+
+*This section carries the most weight.*
+
+### The function your application serves for the network and its users
+
+Alpend is a credit infrastructure suite built on the Canton Network. It consists of two complementary protocols: **Alpend Market** and **Alpend-1**.
+
+**Alpend Market** is a decentralized money market that enables participants to supply assets, earn yield, and borrow against posted collateral. The protocol provides confidential positions and deterministic on-chain settlement for credit markets on Canton.
+
+**Alpend-1** is a vault-based borrowing protocol that allows participants to lock Canton Coin (CC) as collateral and borrow **ONE**, a CC-backed debt instrument geared to $1. ONE is designed to circulate as a stable unit of account within Canton DeFi without requiring users to surrender their CC position.
+
+Together, these protocols support credit creation, collateralized borrowing, liquidity, capital efficiency, and stable-value settlement across the Canton ecosystem.
+
+### The compliance rule the application now operates under (stated as a commitment)
+
+- Alpend commits to claiming rewards only for activity that is eligible under Featured App guidance.
+- Issuer-related activity will not be submitted for Featured App rewards unless and until it satisfies all applicable requirements. Marker submissions are restricted to eligible activity generated by the non-issuer application party.
+- Alpend will maintain separation between issuer functions and application functions and will seek clarification from the Accountability Committee where eligibility is uncertain.
+
+### The monitoring in place to detect future deviation before it becomes an enforcement matter
+
+- Marker submissions are reviewed prior to submission to verify the originating party and activity classification.
+- Alpend maintains internal tracking of issuer and non-issuer activity and reviews ecosystem reporting data to identify discrepancies between operational roles and external classifications.
+- Where uncertainty exists regarding marker eligibility or activity classification, marker submissions will be withheld until clarification is obtained.
+
+### Consent to a follow-up review
+
+Yes. Alpend consents to a follow-up review 30 days after reinstatement, or at another reasonable interval determined by the Accountability Committee.
+
+### Evidence of genuine usage
+
+Alpend is an active Canton credit application supporting lending, borrowing, liquidations, stable-value credit creation through ONE, and yield generation.
+
+Demand for the protocol has been demonstrated through its beta program. More than **12,000 users** have joined the waitlist through Loop Wallet. Access has currently been granted to approximately **1,000 users**, and the protocol has currently reached its planned TVL capacity for the beta phase.
+
+Since launch, the Alpend money market has processed approximately **$3.5 million** in volume.
+
+In addition, approximately **650,000 ONE** is currently in circulation across the Canton ecosystem. ONE is integrated across multiple applications, including **Raven Markets** (derivatives trading), **FractIt** (index assets), and **Alpend Earn** (yield staking), where it serves as a settlement asset, collateral asset, and unit of account for users interacting with Canton DeFi. We are in talks with 10+ venues where ONE is being implemented.
+
+Alpend is a **General Member of the Canton Foundation**, a **Circle Alliance Member**, and has integrated with multiple ecosystem participants, including Loop Wallet, Tradecraft, BitSafe, and more, contributing genuine third-party transaction activity and financial utility to the Canton ecosystem.
+
+---
+
+## 7. Shared Participant Node
+
+N/A — Alpend does not share a participant node with other Featured Apps.
+
+---
+
+## 8. Sources and Explorers
+
+The figures requested above can be collected from public block explorers. Where sources diverge, the source relied upon is stated, along with the reason; a discrepancy between explorers is a data issue and not in itself evidence of an overage.
+
+- **CCView** — CC View
+- **Cantonloop Lighthouse** — 5N Lighthouse Explorer
+- **Transparent Scan** — Canton Network dRPC (Decentralized RPC Infrastructure)
+- **RIZEScore by T-RIZE (beta)** — T-RIZE Group
+- **Canton ecosystem directory** — to find entities in the ecosystem that can assist with collecting data
+
+---
+
+## 9. Locking
+
+Reinstatement is subject to the **CIP-0116 lock**: 5 million CC for featured apps, 25 million CC for issuers. Funds need not be locked at submission but must be segregated and available. Verification precedes reinstatement.
+
+| Field | Detail |
+|---|---|
+| **Amount segregated** | 30 Million CC (5M for Non-Issuer, 25M for Issuer PartyId) |
+| **Location of the funds** | Canton Strategic Holdings |
+
+**Confirmation the lock will be completed as a condition of reinstatement:**
+
+Yes. Alpend has secured an agreement with Canton Strategic Holdings to provide the required CIP-0116 lock on behalf of the protocol. A total of 30 million CC has been segregated for this purpose and will be locked as a condition of reinstatement. Documentation evidencing this arrangement can be provided upon request.
+
+---
+
+## 10. Exception Request (Asset Issuers Only)
+
+N/A — no exception is requested.
+
+---
+
+## 11. Accountability Review Clarifications
+
+### 1. Please show CCView raw data with original vs corrected PartyID classification — what % of the $107k was actually non-issuer reward?
+
+[The on-ledger data extract](https://docs.google.com/spreadsheets/d/1ve_lzCt43ElVk3dIdSDuK5vnC8K_WeAaKFLP3jY0mZk/edit?usp=sharing) for our marker activities is provided.
+
+In summary, all markers contributing to the $107,955 reward weight were submitted from the non-issuer application party:
+
+```
+palladium-validator-1::1220f66f5b1cb78abf40583917b0ea3ce18f546ea5f119de06d0ea1e7d1a250e0f3b
+```
+
+No markers during the reviewed period were submitted from the issuer party:
+
+```
+google-oauth2_007c108879997188710703622::1220f66f5b1cb78abf40583917b0ea3ce18f546ea5f119de06d0ea1e7d1a250e0f3b
+```
+
+Based on the originating PartyIds, **100% of the $107,955 reward weight was generated by the non-issuer application party.**
+
+### 2. Post-correction, what's the eligible reward weight?
+
+Our view is that the eligible reward weight remains **$107,955**.
+
+The correction relates to PartyId classification rather than marker origin. Once activity is attributed to the originating non-issuer party, the reward weight remains unchanged.
+
+The corresponding traffic purchased over the period was approximately **$96,720**, resulting in a reward-to-fee ratio of approximately **111.6%**.
+
+### 3. DA utility registry migration — target completion date?
+
+The DA utility registry migration was expected to be completed by the end of June 2026. The agreement with Digital Asset has been executed and the provider request has already been approved.
+
+Until the migration is fully completed and verified, Alpend will not submit any asset issuer markers. This commitment has already been reflected in practice, as demonstrated by the activity logs from 1–7 June 2026.
+
+> **Update:** The DA utility registry migration is completed.
+
+### 4. Has the Accountability Committee offered any feedback previously to date? Any previous discussions we should factor in?
+
+Prior discussions with the Accountability Committee centered on CIP-0056 compliance. Following notification, we ceased issuer marker activity and began remediation work toward the utility registry structure. Our understanding was that these remediation efforts addressed the original concern, and we were advised to await the reinstatement framework for further consideration.
+
+### 5. FA bonding: can you share the Canton Strategic Holdings lock agreement (or attestation)?
+
+Supporting documentation relating to the lock arrangement has been shared privately with the Accountability Committee.
+
+---
+
+## 12. Additional Accountability Clarifications
+
+### 1. Lock countersignature
+
+> The DocuSign agreement shows "Delivered" status — you've viewed but not signed as of June 18. When will this be completed? Reinstatement cannot be finalized until the agreement shows "Completed."
+
+The agreement has been signed by CSH and is pending on our side, as we did not have visibility into the timing of the reinstatement process. We now understand that the reinstatement framework is active, and we are happy to complete the agreement immediately for reinstatement.
+
+### 2. Ratio breakdown by party
+
+> Your submission shows $107,955 reward weight vs $96,720 fees (111.6% total). You've argued the reward weight accrued to the non-issuer party only — can you provide a per-party breakdown of both rewards earned and fees paid, so we can verify the ratio on the non-issuer party in isolation?
+
+During the reviewed period, the issuer Featured App was not used for marker submissions or reward claims.
+
+| Party | Reward Weight | Traffic Purchased |
+|---|---|---|
+| **Issuer Party** | $0 | $0 |
+| **Non-Issuer Party** | $107,955 | $96,720 |
+
+Accordingly, the 111.6% reward-to-fee ratio relates entirely to the non-issuer application party. No reward weight or traffic from the issuer party contributed to the reviewed period.
+
+### 3. AC guidance attribution
+
+> You referenced being advised to await the reinstatement framework before taking action. Who at AC provided this guidance, and was it communicated formally (ruling, official channel) or informally?
+
+The reference was to an informal Slack conversation with Ryan. Following remediation, Ryan indicated that reinstatement would be handled through a reinstatement framework once such a process was established.