---
type: entity
entity_type: decision_market
name: "Sanctum: Should Sanctum implement CLOUD staking and active staking rewards?"
domain: internet-finance
status: passed
parent_entity: "[[sanctum]]"
platform: "futardio"
proposal_number: "CLOUD-1"
proposal_account: "4BTTxsV98Rhm1qjDe2yPdXtj7j7KBSuGtVQ6rUNWjjXf"
autocrat_version: "0.3"
proposer: "proPaC9tVZEsmgDtNhx15e7nSpoojtPD3H9h4GqSqB2"
proposal_url: "https://www.futard.io/proposal/4BTTxsV98Rhm1qjDe2yPdXtj7j7KBSuGtVQ6rUNWjjXf"
discussion_url: "https://research.sanctum.so/t/cloud-1-should-sanctum-implement-cloud-staking-and-active-staking-rewards/1228"
proposal_date: 2025-02-06
resolution_date: 2025-02-09
category: "mechanism"
summary: "Proposal to implement CLOUD staking with 30-day vesting lockup and allocate 30M CLOUD (3% supply) to active staking rewards over six months"
tracked_by: rio
created: 2026-03-11
---

# Sanctum: Should Sanctum implement CLOUD staking and active staking rewards?

## Summary
Sanctum's first governance proposal (CLOUD-1) passed on 2025-02-09, implementing two mechanisms: (1) CLOUD staking with 30-day linearly vesting lockup to mitigate Keynesian beauty contest dynamics in futarchy markets, and (2) active staking rewards (ASR) allocating 30M CLOUD (3% of total supply) over six months to incentivize governance participation. The proposal explicitly frames staking as a solution to futarchy's "primary potential failure mode" and ASR as compensation for the time and effort required to participate in conditional markets.

## Market Data
- **Outcome:** Passed
- **Proposer:** proPaC9tVZEsmgDtNhx15e7nSpoojtPD3H9h4GqSqB2
- **Proposal Account:** 4BTTxsV98Rhm1qjDe2yPdXtj7j7KBSuGtVQ6rUNWjjXf
- **Autocrat Version:** 0.3
- **Completed:** 2025-02-09

## Mechanism Design
**Staking lockup:** 30-day linear vesting (~3.3 CLOUD/day per 100 sCLOUD unstaked). Designed to filter for long-term holders and reduce speculative trading in governance markets.

**Active staking rewards formula:** `(staked CLOUD amount × time) × (number of votes participated in)`
- Minimum participation: 10 USDC trading volume per proposal
- Distribution: Two 15M CLOUD tranches, quarterly
- First distribution: ~3 months after passage
- Proposal cadence: Every two weeks (1 week deliberation + 3 day voting)

**Implementation strategy:** Immediate staking tracking, but delayed transition to mandatory sCLOUD/USDC markets. Initially keeps CLOUD/USDC voting while building user familiarity. Plans "temperature check after a couple of votes" before requiring staked-token participation.

## Significance
This is the first major Solana protocol (outside MetaDAO ecosystem) to adopt futarchy for operational governance, not just fundraising. The proposal reveals production futarchy friction: complexity requires gradual rollout, liquidity requires subsidies (3% of supply), and the base Autocrat mechanism needs augmentation (staking + rewards) for real-world use.

The design rationale explicitly addresses futarchy's theoretical vulnerabilities (beauty contest problem) through mechanism layering, suggesting pure conditional markets are insufficient for production governance.

## Relationship to KB
- [[sanctum]] - governance decision implementing futarchy
- [[futardio]] - platform used for proposal
- [[MetaDAOs Autocrat program implements futarchy through conditional token markets where proposals create parallel pass and fail universes settled by time-weighted average price over a three-day window]] - base mechanism
- [[futarchy adoption faces friction from token price psychology proposal complexity and liquidity requirements]] - confirms friction through implementation strategy