(a) Problem the project solves

Enterprises and autonomous AI agents need to compute over data they cannot expose, prove the integrity of that work cryptographically, and coordinate across organizations without a trusted intermediary. Traditional cloud requires data exposure; existing blockchains lack the privacy primitives required. MatterChain is the decentralized coordination layer for compute resources, networking, secrets management, and settlement for compute services rendered. It addresses this by combining three primitives in a single execution path: Masked Compute (multi-party computation), so no individual node ever sees a whole input; zero-knowledge proofs that each job executed correctly; and threshold decryption, so results are released only to authorised parties.

(b) Operational priorities

Development and operations are funded from pre-allocated supply and protocol fees, not new issuance: (1) network fees: Validators 70% / Protocol Treasury 20% / protocol fee mechanism 10%; (2) hosting fees: Resource Providers 95% / Protocol Treasury (DAO) 5%; (3) the 100,000,000 MTR Operator Rewards pool (governance-tunable quadratic emission, keyed to trailing 30-day net protocol activity); (4) the governance-controlled DAO Treasury (165,000,000 MTR) and the OMNI allocation (120,000,000 MTR). Open Matter Network, Inc. ("OMNI") is designated as the Service Provider under the DAO's Operating Agreement; a separate written services agreement has been drafted and is not yet executed.

(c) High-level project overview

MatterChain is a Substrate-based NPoS Layer-1 for verifiable confidential compute. Resource providers execute jobs using (1) Masked Compute — multi-party computation splitting inputs into shares so no single node sees the whole; (2) zero-knowledge proofs of correct execution; (3) threshold decryption of results to authorized parties. Complementary products: Quantum Guard™ (ZK policy firewall); Datavizor™ (private beta). Testnet live since November 2025; mainnet live with native staking active. MTR is native on MatterChain; an ERC-20 on Base (bridged 1:1 canonical representation) supports trading and CEX integration.

(d) Primary token functions

MTR is the native utility token of MatterChain: it pays compute and deployment fees, funds ZK proof generation, is staked by Validators (minimum 50,000 MTR) and Resource Providers (minimum 25,000 MTR) subject to slashing, and carries governance rights (1 MTR = 1 vote; 10,000 MTR proposal deposit; staked tokens retain voting rights).

(e) Control surface reliance

Token-contract administration and minting authority sit with Matter DAO's 3-of-5 multisig; supply is capped by on-chain MAX_SUPPLY at 500,000,000 MTR, with live total supply published at https://explorer.matterscan.io/api/mtr/supply. Of that cap, 50,000,000 MTR (10%) was minted as genesis circulating supply, 45,000,000 as the Base ERC-20 and 5,000,000 native on MatterChain, and the remaining 450,000,000 MTR was minted to the Genesis Vault multisig as locked reserve, releasing only under the vesting schedules disclosed in Section 6. Bridging redistributes that split between the two chains over time without changing the aggregate, so the per-chain figures at the endpoint above differ from the genesis split; Base total supply remains 495,000,000, comprising the 450,000,000 Genesis Vault reserve, the bridge-locked balance, and freely circulating Base MTR. Base totalSupply is accordingly 495,000,000, with the 500,000,000 cap maintained in aggregate across both chains through the bridge's 1:1 lock-and-mint design. A 5-of-9 Security Council acts on security-critical matters only, with 24-hour on-chain publication and 7-day DAO ratification. Protocol parameters are set by token-weighted governance (quorum 5% of circulating supply; ≥67% supermajority; 7-day proposal lifecycle); per the whitepaper roadmap, governance-controlled parameters are targeted for activation within 90 days of TGE. Validator and resource-provider participation is open, subject to minimum stake and uptime. Stated whitepaper trajectory: progressive decentralization — block production, compute provision, and core economic mechanics independent of any single party.

Labs / DevCo

Foundation

DAO / Onchain Governance

(a) IP ownership & control

Core protocol IP (blockchain codebase) is open-source and maintained by the Foundation. Application-layer IP—including 2 pending architecture patents and trademarks for "OpenMatter™", "Quantum Guard™" and "Datavizor™"—is held by OMNI as developer of those products, licensed to the Foundation for protocol use. OMNI is designated as the Service Provider under the DAO's Operating Agreement; a separate written services agreement has been drafted and is not yet executed. The Foundation governs the protocol's on-chain parameters and treasury.

(b) Contract/admin powers

- Token contract (0x7a65E14206ec44B5381D546FB53b39F7c91B3914 on Base): DEFAULT_ADMIN_ROLE and MINTER_ROLE are held by the Matter Foundation DAO LLC Genesis Vault multisig (0xf1091cd235242d99076244c2e8ade4249e25dcad), a 3-of-5 Gnosis Safe. Minting on Base is capped by an on-chain MAX_SUPPLY of 500,000,000 MTR; the cap is maintained in aggregate across Base and MatterChain through the bridge's 1:1 lock-and-mint design. - Emergency governance: the Security Council, a 5-of-9 multisig (3 seats appointed by OMNI, 3 elected by MTR holders, 3 held by active validators rotating by stake weight; 12-month terms), may execute security-critical actions only, each subject to publication and ratification procedures. - Standard governance: proposals require a 10,000 MTR deposit; lifecycle is 2-day discussion + 4-day voting + 1-day timelock; quorum 5% of circulating supply; super-majority ≥ 67% to pass. 1 MTR = 1 vote; staked tokens vote; delegation supported. This governance lifecycle is not yet operating on chain. Proposals are currently discussed and voted off chain, and on-chain governance is targeted for activation within 90 days of TGE per the whitepaper roadmap. Once live, a passed proposal executes automatically 24 hours after passing, with no party performing the execution. - Pause and upgrade: the Base MTR contract has no pause, freeze, blacklist or upgrade functions. Verified on chain: paused(), PAUSER_ROLE, UPGRADER_ROLE and proxy implementation() all revert, and the contract is not deployed behind a proxy. There is accordingly no pause or upgrade authority to disclose and no threshold attaching to either.

- Bridge lock: the Base/MatterChain bridge lock contract (0x9634e03303Bb85e04Fd22Cd45DCE40eE2A3cea89) is currently administered by a single externally-owned account controlled by Open Matter Network, Inc. It is not a multisignature account, so no threshold applies. The project's stated intention is to migrate to a trustless bridge validated by proofs from MatterChain; that migration has not occurred, but development on the bridge has commenced and it is intended to be independently audited before going live.

(c) Locked-token rights (conditional)

Staking exists for network security and protocol-issued rewards (validator, resource provider, and nominator roles). Locking or staking MTR confers no additional governance rights: voting power is 1 MTR = 1 vote whether tokens are staked or unstaked, and no separate lock-for-extra-rights mechanism exists.

(d) Current tokenholder governance rights and economic arrangements

Tokenholder governance rights: 1 MTR = 1 vote; staked tokens retain voting rights; delegation supported. Proposals require a 10,000 MTR deposit; lifecycle is 2-day discussion + 4-day voting + 1-day timelock; quorum 5% of circulating supply; supermajority of at least 67% to pass. This lifecycle is not yet operating on chain; on-chain governance is targeted for activation within 90 days of TGE. Tokenholder rights are limited to (i) governance participation (token-weighted voting over protocol parameters, treasury allocation, and upgrades) and (ii) staking to perform protocol services and receive protocol-issued payments, which are compensation for validation and resource-provision services, not yield, dividends, or a return on investment. Protocol emissions and fee mechanics operate automatically pursuant to governance-set rules: network transaction fees split Validators 70% / Protocol Treasury 20% / protocol fee mechanism 10%; hosting fees split Resource Providers 95% / Protocol Treasury 5%; operator payments are drawn from the pre-allocated 100,000,000 MTR Operator Rewards pool. These mechanics are not administered, controlled, or deployed by any party to support, stabilize, or increase MTR's price, and they do not entitle any holder to a share of revenue, profit, or assets of any enterprise. The DAO Treasury (33% / 165,000,000 MTR) is a governance-controlled fund; tokenholders direct its use through governance rather than receiving distributions from it. There is no buyback program and no mechanism for revenue distribution to tokenholders.

(e) Control surface reliance

Token-contract administration and minting authority sit with Matter DAO's 3-of-5 Genesis Vault multisig; supply is capped by on-chain MAX_SUPPLY at 500,000,000 MTR. A 5-of-9 Security Council acts on security-critical matters only, with 24-hour on-chain publication and 7-day DAO ratification. Per the whitepaper roadmap, governance-controlled parameters are targeted for activation within 90 days of TGE, and holder-elected and validator Security Council seats are seated as post-TGE governance activates. The stated trajectory is progressive decentralization: block production, compute provision, and core economic mechanics independent of any single party.

(f) Dissolution authority

Dissolution is governed by Matter DAO's operating agreement (filed 10 June 2026, Registrar of Corporations, Majuro), Article XI: the Company shall be dissolved and its affairs wound up in accordance with the Marshall Islands LLC Act 1996, the DAO Act 2022, and the Non-Profit Entities (Amendment) Act 2021. The operating agreement specifies no contractual dissolution trigger or vote threshold; dissolution proceeds under statute, and the Certificate of Formation states the Company's duration is perpetual until legal dissolution. On dissolution, the operating agreement's no-private-inurement clause bars any Member, officer, employee, or other private individual from sharing in the distribution of the Company's assets.

Dissolution may be invoked by the members by vote (DAO Act 2022, section 114(1)(b)), by the Registrar of Corporations where the organization is deemed no longer to perform a lawful purpose or no longer to be under the control of at least one natural person (section 114(1)(d)), or by any interested party petitioning a court of competent jurisdiction (section 114(3)). MINS LLC, the sole Authorized-Representative nominee member, cannot itself resolve to dissolve the Company: Article IV.1 of the Operating Agreement limits Member voting exclusively to protocol adjustments, the emissions schedule, DAO Treasury expenditures and amendments, and states that Members have no voting rights over matters outside that scope.

(a) Entity

Marshall Islands non-profit DAO LLC, incorporated 2026-06-10 via MIDAO. RMI Foreign Investment Business License held. President and authorized signatory: Vivian Anderson. Per the beneficial-ownership filing: no natural person holds a controlling or >25% interest; MINS LLC is the sole Authorized-Representative nominee member at 0% economic interest (Category C).

(b) IP ownership & control

Core protocol IP (blockchain codebase) is open-source and maintained by the Foundation. Application-layer IP—including 2 pending architecture patents and trademarks for "OpenMatter™", "Quantum Guard™" and "Datavizor™"—is held by OMNI as developer of those products, licensed to the Foundation for protocol use. OMNI is designated as the Service Provider under the DAO's Operating Agreement; a separate written services agreement has been drafted and is not yet executed. The Foundation governs the protocol's on-chain parameters and treasury.

(c) Powers over DAO, treasury, protocol-controlled resources, and token administration

Matter DAO’s Genesis Vault multisig — a 3-of-5 Gnosis Safe, 0xf1091cd235242d99076244c2e8ade4249e25dcad (owners verified on-chain; distinct from the operational Matter DAO Treasury Safe, 0x2b140dD172F38c3B2376C8da193728bAAe83F43e) — holds DEFAULT_ADMIN_ROLE and MINTER_ROLE on the Base MTR contract: it administers token roles and can mint only up to the on-chain MAX_SUPPLY of 500,000,000. Every action requires 3-of-5 signatures. Protocol economic parameters (fees, emissions, slashing) are set by token-weighted DAO governance (1 MTR = 1 vote), not unilaterally by Matter DAO.

(d) Powers over DevCo

None. Matter DAO holds no equity, board seats, or contractual control rights in Open Matter Network, Inc. The relationship runs the other direction: OMNI is designated as the Service Provider under the DAO's Operating Agreement (see 5(d)); a separate written services agreement has been drafted and is not yet executed.

(e) Contract/admin powers

Admin and minter authority on the Base token contract sits exclusively with Matter DAO's 3-of-5 Genesis Vault multisig. Security-critical emergency actions are handled by the 5-of-9 Security Council, on which Matter DAO holds no seats (3 OMNI-appointed, 3 elected by MTR holders, 3 held by active validators rotating by stake weight); Council actions are published on-chain within 24 hours and subject to retroactive DAO ratification within 7 days. The Base MTR contract is neither pausable nor upgradeable: it exposes no pause, freeze, blacklist or upgrade functions and is not deployed behind a proxy (verified on chain), so no such roles exist to be held by any party.

No party executes a passed proposal. Execution occurs automatically 24 hours after a proposal passes. The 1-day timelock is a security window in which the Security Council may take emergency action, consistent with its remit for security-critical matters; it is not an execution role.

(f) Current economic arrangements and distribution policies

Matter DAO administers the DAO Treasury allocation — 33% / 165,000,000 MTR: 20,000,000 unlocked at TGE, 145,000,000 vesting linearly monthly over 5 years beginning 12 months post-TGE — as a governance-controlled fund. Under Whitepaper v1.2, 20% of network transaction fees and 5% of hosting fees accrue to the Protocol Treasury (DAO); these are governance-controlled funds, not Matter DAO revenue for its own account. Beyond these governance-controlled treasury flows, there is no current governance-approved, contractual, or programmatic mechanism by which protocol-controlled resources, fees, revenue, rewards, or token distributions are directed to Matter DAO for its own account. No dividends, repurchases, or distributions have been adopted.

(a) Entity

Delaware corporation, incorporated 20 August 2025. Board: Renee Davis (CEO), Ada Anderson (CTO), and Mike Anderson (CFO). Headcount: 2 employees + 10 contributing members.

(b) IP ownership & control

OMNI develops the protocol codebase under contract to the Foundation. Core protocol IP is maintained by the Foundation per §3(a). OMNI holds application-layer patents and the trademarks OpenMatter™, Quantum Guard™ and Datavizor™.

(c) Powers over DAO, treasury, protocol-controlled resources, and token administration

OMNI appoints 3 of the 9 Security Council seats — below the Council's 5-of-9 execution threshold, so OMNI's seats cannot act alone; the Council is limited to security-critical actions, with 24-hour on-chain publication and retroactive DAO ratification within 7 days. OMNI holds no roles on the token contract (admin and minter sit with Matter DAO's 3-of-5 multisig) and no unilateral control over the DAO or its treasury; protocol parameters are set by token-weighted governance.

Governance Influence: OMNI holds 20,000,000 MTR (40% of the 50,000,000 MTR circulating at TGE). With governance proposals requiring 67% supermajority approval, OMNI's 40% stake exceeds the 33% threshold needed to prevent passage of such proposals, conferring effective veto power over supermajority decisions. OMNI cannot unilaterally pass proposals (affirmative control requires 67% support). This share declines as other allocations vest: OMNI receives no further tokens until 12 months post-TGE, then releases approximately 1,666,667 MTR monthly, falling toward OMNI's 24% share of total supply, which is below the 33% blocking threshold. See Section 5(f) for contractual protections over OMNI's token allocation.

(d) Powers over Foundation

OMNI is not a member of Matter DAO and holds no membership interest (MINS LLC is the sole nominee member — §4(a)). Its influence is contractual and disclosed: OMNI is designated as the Service Provider under the DAO's Operating Agreement, Articles VII.2 and XIII; a separate written services agreement has been drafted and is not yet executed.

(e) Contract/admin powers

None on the token contract — no admin, minter, pause, or upgrade authority on the Base MTR contract; all token-role authority sits with Matter DAO’s 3-of-5 Genesis Vault multisig. OMNI's only on-chain emergency authority is its 3 appointed Security Council seats, per (c).

(f) Current economic arrangements and distribution policies

Token Allocation Protection: OMNI's token allocation is protected under Article VII.2.4 of the DAO's Operating Agreement, which provides that it may not be reduced, revoked or reallocated by Member vote, and that any modification requires both an amendment of that Agreement and OMNI's written consent. Article VII.2.3 provides that the grant occurs automatically at protocol launch without Member approval. This protection is independent of OMNI's governance voting power. See Section 5(c) for OMNI's governance influence.

OMNI holds the OMNI (Labs) allocation under Whitepaper v1.2 — 24% / 120,000,000 MTR: 20,000,000 unlocked at TGE, 100,000,000 vesting linearly monthly over 5 years beginning 12 months post-TGE — designated for protocol development, partnerships, and governance participation. OMNI is designated as the Service Provider under the DAO's Operating Agreement, Articles VII.2 and XIII, which set out its responsibilities for protocol infrastructure, the emissions schedule, non-DAO treasury assets and network security. A separate written services agreement covering fees and commercial terms has been drafted and is not yet executed; the DAO pays OMNI a market-rate services fee for protocol development and engineering, infrastructure and network operations, and related services. Beyond the allocation above, there is no current governance-approved, contractual, or programmatic mechanism by which protocol-controlled resources, treasury assets, fees, revenue, or rewards are directed to OMNI for its own account. No dividends, repurchases, or distributions have been adopted.

No airdrop has ever been conducted. No airdrop is planned in the current TGE distribution structure. No portion of the 500,000,000 MTR supply is allocated or reserved for an airdrop.

(a) Date & component affected

2026-06-30 through 2026-07-01; Base; the initial (preliminary) token contract 0x861d6e719a83e493ab013163a343cf118ac2770a and a recipient distribution multisig. Context: prior to public launch, the protocol underwent a pre-production test deployment used to validate contract functionality, multisig configurations, and bridge mechanics with a limited supply prior to the canonical deployment. No external holders or public trading were involved.

(b) Exploit vector summary

None; not an exploit. No third-party exploit, hack, or attack has affected the live native token, its contract, tokenholder balances, minting controls, or custody of token supply as of 2026-08-12.

(c) Quantified impact

No exploit, hack, or attack has affected the live native token, its contract, tokenholder balances, minting controls, or custody of token supply. Separately, as a supply note: the preliminary test contract minted 45,000,000 MTR (verified on chain), a separate balance from the production contract's genesis mint. Those tokens are non-functional because the contract was abandoned prior to public launch and the multisig holding the distributed balance has no accessible signing keys, so the balance cannot be moved, transferred or burned. They sit outside the 500,000,000 MAX_SUPPLY enforced by the production contract and are excluded from circulating supply calculations. No further action is required or contemplated.

(d) Remediation/response taken

Full deployment of the production token contract (0x7a65E14206ec44B5381D546FB53b39F7c91B3914), live since 2026-07-01, with all circulating supply minted to verified, tested wallets.

(e) Current status

Resolved.

(f) References

Preliminary test contract: https://basescan.org/token/0x861d6e719a83e493ab013163a343cf118ac2770a. Production token contract: https://basescan.org/token/0x7a65E14206ec44B5381D546FB53b39F7c91B3914.

(a) Regulatory, Legal & Tax Risks

Regulatory change affecting distribution and listings: Evolving or conflicting digital-asset laws across jurisdictions could affect the project's ability to maintain token distribution, deliver tokens to purchasers under vesting schedules, or obtain and maintain MTR listings on trading venues. Some jurisdictions may treat MTR or related activities as regulated instruments, restricting issuance, transferability, or venue availability.

Entity-level regulatory impact: The project operates through Matter Foundation DAO LLC (Marshall Islands) and Open Matter Network, Inc. (Delaware), plus affiliated service providers. Enforcement actions, licensing requirements, or new registration or structuring rules in either jurisdiction could force changes to entity structure or operations, or impose licensing obligations.

Tokenholder tax treatment: The tax treatment of acquiring, holding, staking, or transacting in MTR is uncertain and varies by jurisdiction and over time. Tokenholders are solely responsible for their own tax obligations; nothing in this filing is tax advice.

Jurisdictional and user-access restrictions: MTR is a utility token used for its functional purposes on MatterChain and is not offered as an investment. The protocol is permissionless and globally accessible, and MTR is usable by participants in the United States and other jurisdictions for those functional purposes, in each case subject to applicable law. Access restrictions target sanctioned jurisdictions and persons only (OFAC, EU, UK, and UN sanctions lists), consistent with the representations in the project's executed agreements; all MTR flows are publicly auditable on-chain, supporting OFAC/SDN screening. Availability in any jurisdiction is subject to applicable law, and changes in sanctions regimes or regulatory posture could narrow it.

(b) Protocol, Technology & Security Risks

Bugs and design flaws: MatterChain's core protocol, NPoS consensus, the Base ERC-20 contract, and the MPC/ZK masked-compute stack could contain bugs, design flaws, or implementation errors resulting in loss of funds or protocol disruption.

Bridge risk (material multi-chain risk): The 500,000,000 MTR cap is maintained in aggregate across native MatterChain MTR and the 1:1 bridged Base ERC-20. A compromise of the Base-MatterChain bridge could affect supply integrity, custody of bridged tokens (11.7M MTR locked in the bridge as of 2026-08-04), or liquidity. Base bridge locked address: 0x9634e03303Bb85e04Fd22Cd45DCE40eE2A3cea89

Security measures: The MTR token contract was independently reviewed by Pashov Audit Group (July 1-3, 2026). The review identified no critical, high, or medium severity issues; a single low-severity finding (tokens transferred to the token contract's own address are unrecoverable, standard ERC-20 behavior) was acknowledged with no code change required. Audits of the protocol-level MPC/ZK components (Masked Compute, threshold decryption, QuantumGuard) are in progress: the Hashlock engagement covering Masked Compute (MPC) and QuantumGuard (ZK circuits) is underway as of July 2026, with a further Hacken engagement planned but not yet commenced; reports will be published. Economic security is enforced through staking and tiered slashing (validator uptime at least 99.5%, resource provider at least 97%), with a 5-of-9 Security Council limited to security-critical emergency actions.

Limitations of these measures: Completed and in-progress reviews may still fail to detect novel vulnerabilities, economic or logic-level attacks, bridge or cross-chain-messaging exploits, test deployment artifacts (see Section 11), or dependency and supply-chain compromises. Components whose audits are scheduled but not yet complete carry elevated risk until those reviews are published.

(c) Token Economics, Unlocks & Incentive Risks

Critical economic assumptions: The token model assumes genuine compute demand, which drives both the fee base and the quadratic operator-emission curve (keyed to a trailing 30-day rolling average of net protocol activity); sufficient staking participation for NPoS security; and adequate market liquidity. A shortfall in any of these would reduce operator payments, network security, or token utility.

Governance control over monetary policy: Token-weighted governance (5% quorum, at least 67% supermajority) can adjust emission parameters, slashing rates, and treasury allocations, all within the fixed on-chain cap of 500,000,000 MTR. Parameter changes could adversely affect tokenholders, and low participation or concentrated voting power could enable governance capture.

Unlock and sell-pressure risk: 50,000,000 MTR (10%) circulated at TGE. The remaining sold angel tokens (9,719,726.43) release under several vesting structures, all beginning after 6 months and the unsold angel tokens (27,478,212) remain project-controlled (7,197,938.69 TGE-unlocked and deployed to validator loans, market-making inventory and treasury operations; 20,280,273.57 locked) pending reversion to the DAO Treasury; Team & Advisors (75,000,000) vest over 4 years after a 6-month cliff; and the largest tranches — OMNI (100,000,000) and DAO Treasury (145,000,000) — begin 5-year linear monthly vesting 12 months post-TGE. The step-up in unlock rate from month 13 could create sustained sell pressure. More than 90% of the TGE-unlocked investor tokens were additionally committed to minimum 6-month staking agreements.