Concept · Illustrative numbers

Penalty Pool

Skin in the game, held in escrow

Verified projects lock a stake before they ask for trust. Miss a public commitment and part of that stake goes to the people affected.

Not live yet. NOTR Verified is in design. No stakes are held, no payouts are promised, and everything below uses fictional projects. Final rules are subject to legal review.

The mechanism

Five steps from stake to payout

  1. 01

    Stake

    The project locks a stake in USDT in a multisig escrow (3 of 5 signers). The size depends on the project's tier.

  2. 02

    Commit

    Before the clock starts, the project publishes measurable milestones with dates and the evidence that will count as proof.

  3. 03

    Verify

    Facts decide, checked against public evidence. The project can reply before any result is final.

  4. 04

    Settle

    A met milestone releases its share of the stake back to the project. A missed one sends that share to the Penalty Pool.

  5. 05

    Pay out

    The pool is split pro rata among wallets that held the token at a snapshot taken before the missed date.

Try it

What happens to a stake

Pick a tier and how many milestones were missed. The example uses 4 published milestones.

1. Stake tier

Established projects, mid market cap

2. Milestones missed (out of 4 published)

Each milestone is backed by $5,000 of the stake.

Returned to the project
$15,000
Goes to the Penalty Pool
$5,000
Milestones met
3 / 4

Illustrative rule for this demo: a missed milestone forfeits an equal share of the stake. Final rules are set per pilot agreement and reviewed by counsel.

Stake sizes

Three tiers

The tier is picked from public data on the project. Amounts and thresholds are illustrative; pilots are negotiated one by one.

TierStakeTypical fit
Small$5,000Early projects with a small market cap
Mid$20,000Established projects with a mid-size market cap
Large$50,000Large projects with a high market cap

Pilot view

What the dashboard would show

A mock-up using fictional example projects. No real stakes are held.

ProjectTierStakeMetMissedPendingTo pool
Lumen ProtocolMid$20,000301$0
VaultricMid$20,000201$0
Tidewater SwapMid$20,000211$5,000
Orbital RollupLarge$50,000311$10,000

Illustrative Penalty Pool balance$15,000

Be clear about it

What the pool is, and is not

It is

  • A public commitment device: the project puts its own money behind its milestones.
  • A transparent rule set agreed before the clock starts.
  • A way for affected holders to receive a share of what was forfeited.

It is not

  • Insurance. A payout is not guaranteed and will usually be a small share of any loss.
  • A promise that a project will succeed or that its token will hold value.
  • A way to buy a verdict. The bond never changes the verdict, and NOTR never keeps it as income.

Want your project to be a pilot?

We are looking for a small number of projects willing to stake behind their roadmap. Write to us and tell us about yours.