sns-launch

What this skill does

# SNS DAO Launch

## What This Is

Service Nervous System (SNS) is the DAO framework for decentralizing individual Internet Computer dapps. Like the NNS governs the IC network itself, an SNS governs a specific dapp -- token holders vote on proposals to upgrade code, manage treasury funds, and set parameters. Launching an SNS transfers canister control from developers to a community-owned governance system through a decentralization swap.

## Prerequisites

- An NNS neuron with sufficient stake to submit proposals (mainnet)
- Dapp canisters already deployed and working on mainnet
- `sns_init.yaml` configuration file with all parameters defined

## Canister IDs

| Canister | Mainnet ID | Purpose |
|----------|-----------|---------|
| NNS Governance | `rrkah-fqaaa-aaaaa-aaaaq-cai` | Votes on SNS creation proposals |
| SNS-W (Wasm Modules) | `qaa6y-5yaaa-aaaaa-aaafa-cai` | Deploys and initializes SNS canisters |
| NNS Root | `r7inp-6aaaa-aaaaa-aaabq-cai` | Must be co-controller of dapp before launch |
| ICP Ledger | `ryjl3-tyaaa-aaaaa-aaaba-cai` | Handles ICP token transfers during swap |

## SNS Canisters Deployed

When an SNS launch succeeds, SNS-W deploys these canisters on an SNS subnet:

| Canister | Purpose |
|----------|---------|
| **Governance** | Proposal submission, voting, neuron management |
| **Ledger** | SNS token transfers (ICRC-1 standard) |
| **Root** | Sole controller of all dapp canisters post-launch |
| **Swap** | Runs the decentralization swap (ICP for SNS tokens) |
| **Index** | Transaction indexing for the SNS ledger |
| **Archive** | Historical transaction storage |

## Mistakes That Break Your Build

1. **Setting `min_participants` too high.** If you require 500 participants but only 200 show up, the entire swap fails and all ICP is refunded. Start conservative -- most successful SNS launches use 100-200 minimum participants.

2. **Forgetting to add NNS Root as co-controller before proposing.** The launch process requires NNS Root to take over your canisters. If you submit the proposal without adding it first, the launch will fail at stage 6 when SNS Root tries to become sole controller.

3. **Not testing on SNS testflight first.** Going straight to mainnet means discovering configuration issues after your NNS proposal is live. Always deploy a testflight mock SNS on mainnet first to verify governance and upgrade flows.

4. **Token economics that fail NNS review.** The NNS community votes on your proposal. Unreasonable tokenomics (excessive developer allocation, zero vesting, absurd swap caps) will get rejected. Study successful SNS launches (OpenChat, Hot or Not, Kinic) for parameter ranges the community accepts.

5. **Not defining fallback controllers.** If the swap fails, the dapp needs controllers to return control to. Without `fallback_controller_principals`, your dapp could become uncontrollable.

6. **Setting swap duration too short.** Users across time zones need time to participate. Less than 24 hours is risky -- 3-7 days is standard.

7. **Forgetting restricted proposal types during swap.** Six governance proposal types are blocked while the swap runs: `ManageNervousSystemParameters`, `TransferSnsTreasuryFunds`, `MintSnsTokens`, `UpgradeSnsControlledCanister`, `RegisterDappCanisters`, `DeregisterDappCanisters`. Do not plan operations that require these during the swap window.

8. **Developer neurons with zero dissolve delay.** Developers can immediately dump tokens post-launch. Set dissolve delays and vesting periods (12-48 months is typical) to signal long-term commitment.

## Implementation

### SNS Configuration File (sns_init.yaml)

This is the single source of truth for all launch parameters. Copy the template from the `dfinity/sns-testing` repo and customize:

```yaml
# Note: numeric values are in e8s (1 token = 100_000_000 e8s). Time values are in seconds.

# === PROJECT METADATA ===
name: MyProject
description: >
  A decentralized application for [purpose].
  This proposal requests the NNS to create an SNS for MyProject.
logo: logo.png
url: https://myproject.com

# === NNS PROPOSAL TEXT ===
NnsProposal:
  title: "Proposal to create an SNS for MyProject"
  url: "https://forum.dfinity.org/t/myproject-sns-proposal/XXXXX"
  summary: >
    This proposal creates an SNS DAO to govern MyProject.
    Token holders will control upgrades, treasury, and parameters.

# === FALLBACK (if swap fails, these principals regain control) ===
fallback_controller_principals:
  - YOUR_PRINCIPAL_ID_HERE

# === CANISTER IDS TO DECENTRALIZE ===
dapp_canisters:
  - BACKEND_CANISTER_ID
  - FRONTEND_CANISTER_ID

# === TOKEN CONFIGURATION ===
Token:
  name: MyToken
  symbol: MYT
  transaction_fee: 0.0001 tokens
  logo: token_logo.png

# === GOVERNANCE PARAMETERS ===
Proposals:
  rejection_fee: 1 token
  initial_voting_period: 4 days
  maximum_wait_for_quiet_deadline_extension: 1 day

Neurons:
  minimum_creation_stake: 1 token

Voting:
  minimum_dissolve_delay: 1 month
  MaximumVotingPowerBonuses:
    DissolveDelay:
      duration: 8 years
      bonus: 100%                            # 2x voting power at max dissolve
    Age:
      duration: 4 years
      bonus: 25%
  RewardRate:
    initial: 2.5%
    final: 2.5%
    transition_duration: 0 seconds

# === TOKEN DISTRIBUTION ===
Distribution:
  Neurons:
    # Developer allocation (with vesting)
    - principal: DEVELOPER_PRINCIPAL
      stake: 2_000_000 tokens
      memo: 0
      dissolve_delay: 6 months
      vesting_period: 24 months

    # Seed investors
    - principal: INVESTOR_PRINCIPAL
      stake: 500_000 tokens
      memo: 1
      dissolve_delay: 3 months
      vesting_period: 12 months

  InitialBalances:
    treasury: 5_000_000 tokens               # Treasury (controlled by DAO)
    swap: 2_500_000 tokens                   # Sold during decentralization swap

  total: 10_000_000 tokens                   # Must equal sum of all allocations

# === DECENTRALIZATION SWAP ===
Swap:
  minimum_participants: 100
  minimum_direct_participation_icp: 50_000 tokens
  maximum_direct_participation_icp: 500_000 tokens
  minimum_participant_icp: 1 token
  maximum_participant_icp: 25_000 tokens
  duration: 7 days
  neurons_fund_participation: true

  VestingSchedule:
    events: 5                                # Neurons unlock in 5 stages
    interval: 3 months

  confirmation_text: >
    I confirm that I am not a resident of a restricted jurisdiction
    and I understand the risks of participating in this token swap.

  restricted_countries:
    - US
    - CN
```

### Launch Process (11 Stages)

```
Stage 1:  Developer defines parameters in sns_init.yaml
Stage 2:  Developer adds NNS Root as co-controller of dapp canisters
Stage 3:  Developer submits NNS proposal using `dfx sns propose`
Stage 4:  NNS community votes on the proposal
Stage 5:  (If adopted) SNS-W deploys uninitialized SNS canisters
Stage 6:  SNS Root becomes sole controller of dapp canisters
Stage 7:  SNS-W initializes canisters in pre-decentralization-swap mode
Stage 8:  24-hour minimum wait before swap opens
Stage 9:  Decentralization swap opens (users send ICP, receive SNS neurons)
Stage 10: Swap closes (time expires or maximum ICP reached)
Stage 11: Finalization (exchange rate set, neurons created, normal mode)
```

### Motoko

Prepare your canister for SNS control. The key requirement is that your canister accepts upgrade proposals from SNS governance:

```motoko
import Principal "mo:core/Principal";
import Runtime "mo:core/Runtime";

persistent actor {
  // SNS Root will be set as sole controller after launch.
  // Your canister code does not need to change -- SNS governance
  // controls upgrades via the standard canister management API.

  // If your canister has admin functions, transition them to
  // accept SNS governance proposals instead of direct principal checks:

  var snsGovernanceId : ?Principal = null;

  // ⚠ SECURITY: This setter MUST be access-controlled. Without a check, any caller
  // can front-run you and se