Treasury Policy

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Date: May 7, 2026

Version: 1.0

0. Introduction

From the beginning, Canopy has been a principle-based organization that has sought alignment between key stakeholders and the project. As such, we designed a system where governance, economics, and transparency were based upon tried and true principles of economic alignment. This is in direct opposition to untested or failed policies of many other projects. We've witnessed community mismanagement, mercenary farmers, and unhealthy discourse on management policies. We believe that individuals and companies should steward Canopy and can make the best use of tokens, underpinned by the simple principle that economic alignment drives superior results. Key examples of this approach: Bitcoin and Ethereum—two of the largest and most successful crypto projects.

On Decentralization

In the context of an open-source global blockchain ecosystem, token holders serve as the essential nucleus of decentralization. As tokens confer rights of governance and network participation, these holders are intrinsic to the system's operational functionality. Active engagement in consensus mechanisms, governance decisions, and network improvements is critical, ensuring that no single entity can dominate the network and thereby mitigating the risk of centralization that would compromise core blockchain principles. Ultimately, decentralized token holders drive the network's success and resilience through their contributions to security, governance, innovation, and inclusivity, securing the long-term viability of the technology and establishing a more democratic, secure, and globally accessible future.

This commitment is realized through a strategy of progressive decentralization, which balances the need for initial security and stability with the long-term goal of robust community governance. Canopy achieves this phased transition through the systematic and effective distribution of the CNPY token. By ensuring that the entire token supply is generated and diffused over an extended horizon via block rewards, the network gradually disperses economic control and governance rights across a broad base of independent validators and token holders, thereby securing the long-term viability and community-driven nature of the protocol.

Key Parties

Below are key parties associated with the development and ongoing management of the Canopy ecosystem. These entities all hold and maintain CNPY tokens and are aligned with the long-term growth and viability of Canopy:

The Canopy Network Foundation

The steward of the Canopy protocol and ecosystem. Its mandate is to ensure the long-term health, decentralization, and growth of a network built on a simple belief: any developer should be able to launch, own, and scale a sovereign blockchain without compromise. The Foundation oversees protocol governance, coordinates the validator community, and deploys ecosystem grants and resources to support builders, researchers, and partners. A portion of every block reward flows to the Foundation, creating a self-sustaining model where the Foundation's resources grow alongside the network it serves.

Canopy Network Corp.

A wholly owned subsidiary of the Canopy Network Foundation and serves as the commercial and operational arm of the Canopy ecosystem. Canopy Network Corp. is the issuing entity for the CNPY token and is responsible for managing the key business relationships that support the network's growth and adoption, including exchange partnerships, institutional counterparties, and strategic commercial agreements. While the Foundation holds the protocol mission and the Labs team builds the core software, Canopy Network Corp. interfaces with the broader market on the Foundation's behalf, ensuring the ecosystem has the commercial infrastructure and partnerships necessary to scale. As a subsidiary rather than an independent actor, Canopy Network Corp. operates in alignment with the Foundation's governance and long-term objectives.

Canopy Network Labs

The core protocol development firm contracted by the Canopy Network Foundation. The Labs team is responsible for the design, engineering, and ongoing maintenance of Canopy Core, the open-source Go implementation of the Canopy protocol. From consensus and peer-to-peer networking to the state machine and developer tooling, Canopy Labs translates the protocol's technical vision into production-grade software. As a contractor rather than a controller, Canopy Labs operates in service of the Foundation's mission, with compensation tied to block reward distributions to keep incentives aligned over the long term.

Treasury & Other Parties

The primary Canopy Treasury is held by the Canopy Network Foundation for the benefit of Canopy. Tokens held by private parties, including contributors, investors, and advisors, are subject to separate vesting agreements and governance processes, but may be used to grow or benefit Canopy.

1. Purpose

This policy provides community guidance on token management across the Canopy ecosystem, covering the Foundation treasury to ensure long-term operational sustainability and ecosystem growth. It is published openly to support community visibility into how CNPY held by key ecosystem parties will be managed, particularly in the context of the Token Generation Event (TGE) and beyond.

Certain operational thresholds and trade parameters are held internally to protect against market-moving disclosure and front-running exposure, a structural reality of treasuries with significant native token concentration.

2. Guiding Principles

Sustainability: The treasury's primary function is to fund Canopy's mission. Return generation is secondary to preserving the capacity to operate.
Transparency with proportionality: We publish our policy categories, governance structure, and activity summaries. We do not publish specific thresholds, trade timing, exact mechanisms, or counterparty details that could be exploited.
Native token risk mitigation: Smart financial policies are built around diversification. CNPY constitutes a significant portion of each party's holdings. Any disposition or instrument referencing CNPY requires careful consideration, balanced with sustainability.
Measured growth: Entities may take positions with the primary purpose of return generation, within the governance framework established in Section 7.

3. Asset Categories

Each covered party holds assets across some or all of the following categories:

Native Token (CNPY): The primary asset for all covered parties, received via block reward distributions.
Liquid Non-Native Assets: ETH, BTC, and other third-party crypto assets held for diversification and operational flexibility.
Fiat-Denominated Assets: Stablecoins and cash equivalents held to fund near-term operations and grants.

Parties will periodically rebalance allocations across various asset categories and instruments to adapt to evolving market dynamics, enhance diversification, or capture emerging yield opportunities. Consequently, deposits and withdrawals should be interpreted within this operational context and do not constitute an endorsement or lack of endorsement.

4. TGE

This section describes the expected token management behavior of each key party at and following TGE. It is intended to give the community, investors, and prospective participants a clear picture of how CNPY flows through the ecosystem. Parties will seek to earn acceptable returns on assets in a manner consistent with Canopy’s principles.

4.1 Canopy Network Foundation

The Foundation, an ownerless foundation, holds the primary protocol treasury, funded by a share of every block reward. At TGE and on an ongoing basis:

The Foundation will manage its treasury per the Authorized Activities framework in Section 5.
Conversion of CNPY to fiat or stablecoins will occur periodically to fund operational expenses and grants, within Board-approved parameters.
All dispositions are tied to operational need, strategic ecosystem investment, or Board-approved return-generation programs.
Canopy Network Foundation may stake or delegate CNPY to maintain or grow its position in the protocol.

4.2 Canopy Network Corp.

Canopy Network Corp. is the issuing entity for CNPY and plays a central role at TGE in establishing the token's commercial foundation. At TGE and on an ongoing basis:

Canopy Network Corp. manages the mechanics of token issuance and distribution, coordinating with exchanges, custodians, and institutional counterparties to support orderly market access for CNPY.
Tokens held by Canopy Network Corp. are maintained for commercial and business development purposes, including exchange liquidity arrangements, strategic partnership agreements, and other market-facing relationships that support the network's growth.
Canopy Network Corp. may assist in managing treasury per the Authorized Activities framework in Section 5.

4.3 Canopy Labs

Canopy Labs, a for-profit company, receives CNPY as contractor compensation via block reward distributions from the Canopy Foundation. At TGE and on an ongoing basis:

Tokens are primarily used to fund protocol development: team compensation, contractors, and tooling.
Labs may convert a portion of its CNPY to stablecoins or fiat on a recurring basis to fund ongoing operational costs.
After covering expenses, Labs is expected to hold a meaningful portion of its CNPY long-term, reflecting alignment with the network's success.
Labs may engage in yield generation on idle holdings and, consistent with the Measured Growth principle, may take positions to support its long-term financial sustainability.

4.4 Private Parties

Tokens held by contributors, advisors, and other private parties are subject to their own vesting schedules, lockup agreements, and separate governance processes. The Foundation does not govern the activities of private token holders beyond those agreements. Private parties may use their tokens to:

Participate in network governance, staking, and validation.
Support ecosystem growth through donation, investment, partnership, or delegation.
Engage in any lawful activity consistent with their vesting and lockup agreements.

Any material changes to private party lockup terms will be disclosed to the community.

5. Authorized Activities

The following activities are permitted for covered parties. The "Applies To" column indicates which parties may engage in each activity.

Conversion / off-ramp - Converting CNPY or other crypto assets to stablecoins or fiat to fund near-term operations and grants.
Token acquisition - Purchasing CNPY on the open market or directly from private parties for purposes of treasury management, ecosystem stability, or strategic alignment.
Diversification - Rebalancing holdings across asset categories to reduce concentration risk over time.
Yield generation - Deploying idle non-native assets in low-risk, documented yield-bearing instruments or DeFi protocols that meet risk criteria approved by the relevant governing body.
Hedging - Using financial instruments to reduce price, currency, or counterparty risk. See Section 6 for tiered approval requirements.
Measured growth - Taking positions with the primary purpose of return generation to support the long-term sustainability of each entity.
Grants & disbursements - Distributing capital to ecosystem initiatives per approved grant programs.
Third-party management - Delegating management of a defined allocation to qualified asset managers under a formal mandate.
CNPY deployments - Staking, delegating, or otherwise using tokens in Canopy or other applicable protocols, according to their lockup schedule.

6. Risk Management

Canopy's native token concentration creates risks that standard institutional treasury frameworks do not anticipate. As such, parties may engage in the following activities:

Fiat & stablecoin holdings: Standard instruments (forwards, money market) may be used by the relevant party.
Non-native crypto assets: Hedging instruments may be executed to minimize risk or strategically maximize returns.
Native token (CNPY): Hedging, derivatives, structured instruments, or other positions may be used.

7. Token Acquisition Programs

From time to time, covered parties may execute programs to acquire CNPY on the open market or from private parties for purposes of treasury management, ecosystem stability, strategic alignment, or USD treasury building. Because token acquisition programs carry the same market-signaling sensitivity as dispositions, they are subject to a structured disclosure framework designed to maintain community trust without creating front-running exposure.

Program Authorization

Any token acquisition program must be authorized by the relevant governing body prior to execution. Any public announcements will include the purpose of the program, the total budget authorized, the funding source (i.e., what assets will be used to acquire CNPY), and the anticipated duration. Individual trade timing, volume, and counterparty details are not disclosed in advance.

Execution

Open market acquisitions will primarily be executed through exchanges by the party or using authorized market maker intermediaries.

Private Party Purchases

The Foundation may purchase CNPY directly from private parties, including investors, team members, and other holders, at or below fair market value. Purchases at a discount to market price are an authorized means of building the Foundation's fiat or stablecoin reserves, as the spread between the acquisition price and prevailing market value may be realized through subsequent disposition. Any purchase involving a party with a material relationship to Canopy must be disclosed to the Foundation Board.

8. Looking Forward

Looking ahead, Canopy’s long-term strategy is built on the unwavering principle of economic alignment, viewing the network’s decentralized token holders as the essential nucleus for long-term viability. The progressive distribution of the CNPY token will systematically transition governance and economic control to the community, securing a democratic and resilient future for the protocol. The Foundation’s treasury management, guided by the principles of sustainability and transparent governance, will ensure the necessary resources are continually deployed to bolster high-impact development and ecosystem expansion.