A lot has been written after the movement from the Callisto treasury fund and the subsequent SOY token Rug Pull. Some of it is true, some of it is partially true, and some of it is false.

Yet some misunderstandings must be clarified so the Callisto Network community receives accurate information.

Treasury Transparency and Governance in Callisto Network

A fundamental aspect of Callisto Network is its treasury. The Whitepaper Revision 0.9, dated January 16, 2018, introduces the treasury and its role in the network’s development and governance:

  • Decentralized Development: The introduction of a treasury smart contract was planned to transition towards a fully decentralized development and governance, empowering the community to drive progress.
  • Community Participation: The whitepaper envisioned enabling all CLO holders to participate in governance by proposing or voting on initiatives via the treasury smart contract.
  • Allocation and Utilization: The treasury is allocated 10% of the block reward to support development, audits, and infrastructure, with outlined rewards for core team members

This whitepaper also introduces the treasury structure, with the only information available being the reward of the developers and founders, notably Yohan Graterol and Dexaran, 500,000 CLO per month each, without mentioning the “control” they have on the treasury.

The whitepaper specifies that the “On-chain governance system” would be implemented in November 2019, with “Hardfork No. 2” marking the start of decentralized treasury management.

Infrastructure and Funding Challenges

The envisioned on-chain governance and treasury management system 

was neither described nor implemented. This led to the treasury being utilized for operational costs, including salaries, audits, and infrastructure maintenance. 

Here are notable transactions demonstrating the treasury’s use for sustaining the network’s infrastructure:

With the treasury’s monthly inflow of approximately 1,600,000 CLO (~$1,100 before the SOY Finance incident), sustainability was a concern. To address this, Callisto Enterprise took proactive steps to ensure the network’s sustainability by covering development and infrastructure costs, allocating $22,000 in 2023 for server costs alone.

The SOY Finance Incident

In February 2023, faced with the imperative to maintain Callisto Network’s infrastructure, Callisto Enterprise transferred the CLO coins from the treasury funds. This led to an irreversible reaction. Dexaran’s minting and liquidating an unprecedented volume of SOY tokens led to significant losses within the Callisto Network community.

This incident affected community trust and ignited discussions on governance and the balance of power within Callisto Network. 

Despite intentions for a decentralized governance model, its implementation still needs to be completed, contributing to current transparency and fund management challenges, which have led directly to today’s situation.

Commitment to Resolution

In the wake of the SOY Finance incident, Callisto Enterprise has fully refunded the Callisto Network Treasury to address the financial implications and ensure the integrity of the Callisto Network community. 

Dexaran has publicly committed to refunding SOY Finance liquidity providers, contingent upon the treasury’s refund. He stated, “Liquidity providers will get their refund once the governance issues are solved.“

Callisto Enterprise, therefore, expects immediate measures to be taken to facilitate the refund process for community members affected.

The decision by an individual to mint and sell a significant amount of SOY tokens, leading to the incident, was beyond our control and responsibility. Despite our persistent requests to transition the SOY token contract to a multi-sig wallet, Dexaran failed to update the contract. 

Yet, we are committed to mitigating its impact on our community, and we have reserved 50 million CLO coins for the SOY Finance liquidity providers that would experience a loss during the refund process.

Beyond Financial Impact

The repercussions of the SOY Finance incident extend beyond financial losses. The removal of longstanding moderators and the subsequent lack of moderation on the Callisto Network main Telegram chat since February 16, 2024, have facilitated an environment of misinformation, fear, uncertainty, and doubt (FUD).

Restoring trust and stability within the Callisto Network community channels should be a priority, and we urge Dexaran to reinstate effective moderation and open, constructive dialogue.

Dispelling Bankruptcy Allegations

Recent discussions have raised concerns regarding the financial health of Callisto Enterprise, the principal entity behind Callisto Network. 

We categorically refute bankruptcy claims and assure our community that Callisto Enterprise remains robust and operational. The status of the company is publicly verifiable here. 

Callisto Enterprise introduced the CLOE DAO as part of our commitment to transparency. This initiative ensures a transparent and community-informed operational framework. The DAO’s structure and objectives were openly shared with the community in this article.

The allegations suggesting that Callisto Enterprise has ceased funding development are misleading, and our recent initiatives, including the launch of projects like SLOFI and partnerships with Quantum Foundation and MERL, underscore our active development agenda and financial health.

The Community’s Role in Callisto Network

Callisto Enterprise has supported the Callisto Network’s development, infrastructure, maintenance, and enhancement for over two years. Our commitment to decentralizing the network management and empowering the community aligns with the original Callisto Network Whitepaper vision. 

Our initiatives to involve community members directly in the network’s development have been demonstrated with our Ambassador Program (Announcement 1 / Announcement 2) and the creation of a transparent and Dynamic Motivation System.

We have also encouraged proactive participation within Callisto Network, notably by hiring and appointing key community members to significant roles, including Gary J as the primary moderator, Mad Catter as the social media manager, MJ as the Lead Analyst, and Erik as a smart contract auditor.

Resource Ownership

In a decentralized environment like Callisto Network, the ownership of resources is unequivocally attributed to those who own, contribute, and invest in the maintenance and growth of these assets. The sustained collective effort of creators, contributors, and funders defines the ownership and drives the success of decentralized projects.

Callisto Enterprise has always supported community-led initiatives and projects. However, we also ensure that social media and other resources are used exclusively to promote the ecosystem, supporting projects built on Callisto Network. 

Whether promoting ICOs like Dex 223 or supporting community initiatives like VIP Warz, 2bears, Power Car, or upcoming projects like MERL, the goal should be to elevate projects that contribute positively to the Callisto Network ecosystem.

Conclusion

The narrative that emerged with the recent events surrounding the Callisto Network treasury demands clarification and response.

Misrepresentations, reinterpretations of actions, and the lack of a mutually agreed-upon treasury and transparent structure have led to concerns within the Callisto Network community.

In response, Callisto Enterprise has taken decisive resolution actions to ensure the community’s interests are protected. We have returned the entire amount to the treasury and are closely monitoring the refund process initiated by Dexaran. Furthermore, we’ve allocated an additional 50 million CLO to cover any potential shortfalls in the liquidity pools, and legal actions will be considered if necessary to protect the interests of those affected.

Looking forward, Callisto Enterprise is engaging in discussions with the Invictus Investment Fund to define our next steps, and we have proposed measures for transparent, decentralized control of the Callisto Network treasury to restore confidence among the Callisto network community.

We want to make it unequivocally clear that Callisto Enterprise does not seek to control the treasury in any manner, and we recommend a hard fork as soon as possible to eliminate any doubts regarding the treasury’s management in the future.

Callisto Network’s strength lies in its community.