Question 1

What is CNPY?

Accepted Answer

CNPY is the native token of the Canopy network and the collateral asset that the Security Root uses to measure validators’ economic backing. It can pay Security Root transaction fees; when validators and delegators lock native CNPY, they can provide economic security for the Security Root and its Nested Chain committees. Canopy separates “who validates” from “which application chain is validated”: the Security Root manages collateral, while committees consist of participants who select a particular Nested Chain. Collateral gives misconduct economic consequences, so CNPY’s fees, rewards, committee subsidies, and governance weight are all based on native collateral.

Question 2

How is CNPY used to pay fees?

Accepted Answer

On the Security Root, CNPY is used to pay transaction fees; fees are determined by a transaction’s computational requirements and prevailing network conditions. Fees raise the cost of spam transactions and flow back into the reward system for network participants rather than constituting additional token issuance. Nested Chains can define their own state machines and fee logic, so fees within an application chain need not be the same as Security Root fees. Holding CNPY alone does not establish that fees can be paid on every Nested Chain; this depends on that chain’s design.

Question 3

What do validators and delegators do when staking CNPY?

Accepted Answer

When staking, participants lock native CNPY from their accounts as collateral and specify the committee they serve, their identity type, and how rewards are handled. Validators run nodes and participate in Byzantine fault-tolerant consensus; delegators do not run nodes or directly sign blocks, but their directed stake can be included in committee subsidy eligibility calculations and they may receive that committee’s delegator rewards. A validator’s voting power is proportional to the amount it locks. Delegation does not transfer voting power to a particular validator: in the current model, delegated stake itself counts toward the selected committee’s total directed stake, thereby affecting which Nested Chains can receive protocol subsidies.

Question 4

How does restaking work in Canopy?

Accepted Answer

Canopy allows the same locked native CNPY to be directed to multiple committees at the same time; it is not split among committees. For example, when a stake of 10,000 CNPY is directed to three committees, it counts with a security weight of 10,000 CNPY in each committee. This restaking enables new Nested Chains to obtain shared security without first building an independent validator network, but it also makes the same collateral responsible across multiple committees. Misconduct or failure in one committee may affect that shared collateral, so greater capital efficiency comes with correlated risk.

Question 5

How does a committee receive CNPY protocol subsidies?

Accepted Answer

A committee becomes eligible for subsidies when validator and delegator stake directed to it exceeds 33% of the Security Root’s total stake. The calculation is: committee-directed stake ÷ all Security Root validator and delegator stake × 100%; the committee qualifies only when the result reaches or exceeds the current threshold. This is not a fixed allocation directly purchased by the project. Participants must choose to direct their collateral to a committee for the support required for eligibility to form; when multiple committees qualify at the same time, they evenly split the portion of block rewards allocated to subsidized committees. Therefore, an additional qualifying committee changes the share available to each existing qualifying committee.

Question 6

How is CNPY issued and how are block rewards distributed?

Accepted Answer

CNPY’s initial block reward is 80 CNPY per Security Root block; blocks are produced about every 20 seconds, and the reward halves every 3,150,000 blocks, or about every two years. Block rewards are expected to cumulatively issue 504 million CNPY, with an additional one-time mint of 56 million CNPY, for an expected maximum supply of 560 million CNPY. Each block reward is first split into two portions: 70% goes to the Canopy DAO Treasury, and 30% is divided equally among subsidized committees. A committee then distributes its share under its own rules; the current default distribution is 70% to block producers, 10% to CNPY delegators, 10% to Nested Chain native-asset validators, and 10% to their delegators. This explains why issuance, the protocol treasury, and rewards for committee participants are not the same stage.

Question 7

Are rewards automatically compounded? Under what circumstances does burning occur?

Accepted Answer

By default, rewards received by validators or delegators are automatically added to their stake, increasing the subsequent staking base. Participants may also choose not to auto-compound and direct rewards to an output address; under that mode, the protocol deducts an early-withdrawal penalty and permanently burns that portion. In addition to early-withdrawal penalties, slashed tokens are also burned. Therefore, “maximum supply” is not the same concept as total on-chain supply, circulating supply, or staked supply at any point in time; the latter figures should be determined from the on-chain state at that time.

Question 8

What protocol-level risks and exit conditions apply to staking CNPY?

Accepted Answer

A validator may be slashed for double-signing or for missing signatures on more than MaxNonSign blocks within the specified NonSignWindow; penalty parameters are set through protocol governance, and slashed CNPY is burned. Current slashing conditions apply to validators that actually sign or fail to sign, while delegators do not sign directly. Unstaking is not completed immediately: after initiating unstake, there is a governance-set unbonding period during which the stake can still be slashed. This window addresses evidence of misconduct discovered afterward and raises the cost of long-range attacks using old keys that have exited. With restaking, because the same stake serves multiple committees at once, correlated exposure from misconduct in one place must also be considered.

Question 9

What is the difference between native CNPY and BEP-20 CNPY on BNB Smart Chain?

Accepted Answer

Native CNPY is recorded on the Canopy Security Root and can be used for staking, restaking, committee subsidy calculations, committee rewards, Security Root fees, and validator governance weight. BEP-20 CNPY on BNB Smart Chain is another representation of the same asset, but these protocol operations recognize only native CNPY. BEP-20 CNPY can be transferred and traded in the BSC environment, but it cannot directly count toward the Security Root’s TotalStake, be directed to a committee, or claim the CNPY/application native-asset rewards handled by Certificate Result. Which form is held therefore changes the functions available, and identical names should not by themselves be taken to imply identical functions.

Question 10

How is CNPY related to Canopy governance and the DAO Treasury?

Accepted Answer

The Canopy DAO Treasury receives 70% of each block reward for work benefiting the network and ecosystem. Protocol parameter changes and treasury transfers are binding proposals: they take effect only after approval by more than two-thirds of the voting power of the Security Root committee. Governance can therefore change eligible protocol parameters and incentive rules, but this does not mean every parameter remains permanently unchanged. When reading staking thresholds, unbonding periods, fees, or slashing parameters, distinguish the current model described in documentation from the actual on-chain parameters.

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