Safenet Terms

Safenet Protocol Rules and Disclaimer

Rules of the protocol and the roles within it

Last updated: 15 October 2026

1. Safenet Aegis is a permission-less transaction-checking protocol (“Safenet”). Before a transaction is executed, Safenet checks it against a defined set of risk markers - among them address poisoning, and unrelated approvals - and, where a marker is identified, pauses the transaction so that the User (as defined below) can reconsider it.

2. Please read the following Safenet Protocol Rules and Disclaimer (“Rules”) carefully. These Rules define the roles of Safenet participants and describe the technical structure and operation of the protocol, as adopted by resolution of the SafeDAO. It is the reference document against which you can understand what each role may and may not do.

3. If you do not agree with these Rules or any part thereof, you may not participate on Safenet. Your participation in the Safenet implies your agreement with these Rules.

4. In these Rules, references to “you” refer to the entity and/or individual participating in Safenet.

5. These Rules may be amended by the SafeDAO from time to time. You have the sole responsibility to check whether there is a new version of the Rules. The latest version of the Rules always applies and is accessible at: https://charter.safenet-gov.eth.limo/.

6. Participants in Safenet may impose terms that apply to you when you interact with them. Such other terms apply separately or in addition to these Rules (vis-à-vis the respective third-parties). You are solely responsible and/or liable for any aspect of and/or for any damages arising out of or related to any kind of products or services provided by third-parties. These Rules do not govern the underlying blockchains, the Safe Wallet by Safe Labs and/or any other (Safe) interface(s).

7. The Safe Ecosystem Foundation (“Foundation”) is neither a participant nor the operator of Safenet. When you interact with Safenet or any of its participants, you are not interacting with the Foundation.

1. Principles

8. Safenet is a decentralized, sentinel-based consensus layer protocol that allows basic on-chain transaction security checks using the SAFE token (“SAFE Token”) as its core security primitive. Safenet launches with a permissioned sentinel set of 4-6 Sentinels (as defined below) and a permissioned validator set of 4–6 Validators (as defined below). Safenet relies on two independent roles: Sentinels, who check transactions against the defined risk markers and vote on the result, and Validators, who attest those results on-chain, maintain network security and support the Safenet’s attestation process. The fundamental principles of Safenet are the following:

9. Self-custody. Control over digital assets remains with the User (as defined below) at all times. No role in the protocol holds, moves or can dispose of User’s digital assets.

10. Pause, never block. Safenet can delay a transaction. It cannot prevent one. A design in which any role could finally prevent a user transaction is excluded from Safenet.

11. The User decides. The last decision on every individual transaction belongs to the User, exercised through the override.

12. Opt-in. No User is subject to Safenet without choosing it, and any User may stop using it at all times.

13. Signals, not assurances. Safenet output is informational. It identifies risk markers; it does not certify that a transaction is safe. False positives and false negatives are possible.

14. No single operator. No single party operates Safenet, controls funds, or determines who participates.

15. Separation of checking and attestation. The party that assesses a transaction is not the party that attests the result on-chain.

16. Transparency. Parameters, set composition, decisions and incidents are published.

2. Roles & Definitions

17. Safenet is operated by no single party. Safenet relies on multiple participants performing distinct roles. Each role has its own entry conditions and economic security, as described below.

18. User(s): A user initiates a digital asset transaction and decides whether it proceeds. Users take on no obligation to Safenet beyond payment of the fee for a check they have requested. Use of Safenet is opt-in and requires no permission. A user can expect that a check will be performed against the defined risk markers; that only an eligible unanimous secure result may be attested on-chain; that a paused transaction can be carried through by the User alone via the override mechanism, on a time delay, without the cooperation of any other party; and that no role within Safenet can prevent the transaction outright. The User is responsible for its own key management, the decision whether to proceed with any transaction, and the consequences of that decision. Safenet output is informational and does not transfer responsibility for the transaction away from the User.

19. Sentinel(s): Sentinels check a submitted transaction against the defined risk markers - address poisoning, unrelated approvals, together with other base checks - and cast a “Yes” or “No” vote on the result. Admission is permissioned, the Sentinel set is a Safenet protocol parameter maintained by the SafeDAO. A Sentinel’s role includes performing checks substantively before voting; to post a bond for each vote; to meet the security, audit, and other requirements described in these Rules. A Sentinel may withdraw at any time and may also be removed as described in these Rules.

20. Validator(s): Validators attest only eligible unanimous secure results of a check on-chain. Validators do not perform the substantive check and do not assess transactions. Admission is permissioned, on the same eligibility and screening basis as Sentinels, admitted by SafeDAO resolution. A stake must be posted to participate. A Validator’s role includes attesting results faithfully and within the attestation deadline; maintaining availability and key security; and complying with other requirements in these Rules. A Validator may withdraw at any time and may also be removed as set forth in these Rules. Each Validator is solely responsible for all hardware, software, hosting, and infrastructure costs necessary to operate

21. Security Council: The Security Council resolves checks on which the Sentinel vote was split, and authorises the corresponding movements of the Bonds (as defined below). The Security Council is bound by the Safenet Arbitration Charter, approved by the SafeDAO (the “Arbitration Charter”) published here: https://charter.safenet-gov.eth.limo/. The SafeDAO appoints the individual members of the Security Council. Each member of the Security Council must adhere to the Safenet Arbitration Charter and resolve disagreements by and between Sentinels. A member of the Security Council may withdraw at any time and may also be removed as set forth in these Rules.

22. SafeDAO: The SafeDAO is the decentralised governance body of the Safe ecosystem, consisting of the holders of the SAFE token, who decide by vote on the Safe protocol, the treasury and - for Safenet - these Rules, the sentinel sets, the validator sets, the Security Council and the Safenet parameters. Decisions are taken by token-weighted vote.

23. Safe Ecosystem Foundation: The Foundation is neither a participant nor the operator of Safenet. It does not perform transaction checks, validations, transaction executions, or node management and does not operate, supervise, or monitor participants. The Foundation assumes no responsibility for any participants performance, availability of Safenet, or any Safenet outcomes. The Foundation may propose to the SafeDAO candidates for the Sentinel and Validator sets as well as for the Security Council and, if instructed, can conduct the sanctions and applicable AML screening of candidates. The Foundation cannot approve, reject, modify, reverse, delay, censor, or otherwise interfere with any Safenet Smart Contract (as defined below).

24. Interface Provider(s): Any party may operate an interface to Safenet. Each Interface Operator is responsible for its own frontend, its own terms and its own security, and must present Safenet as a protocol rather than as its own service.

25. SAFE Token: The SAFE Token is a blockchain-based utility token issued by the Foundation, based on the ERC-20 token standard of the Ethereum blockchain. The SAFE Token serves as the core security and coordination primitive of Safenet and can be used to govern the SafeDAO as well as to participate in Safe DAO votings https://safefoundation.org/token.

26. SAFE Token Holders: A SAFE Token holder is not a participant in Safenet by virtue of holding, and becomes one only by staking to a Validator Node through the Staking Contract (as a Delegator), by operating a Validator Node or acting as a Sentinel.

27. Safenet Smart Contracts: All Safenet Smart Contracts are self-executing software programs originally deployed on the Ethereum blockchain or Gnosis Chain. The Safenet Smart Contracts operate autonomously in accordance with their programmed logic and the rules of the underlying blockchain protocol. The source code of the Safenet Smart Contracts are publicly available for reference at: https://github.com/safe-research/safenet / https://github.com/safe-research/safenet/tree/main/contracts. The Foundation does not retain any administrative access, upgrade rights, pause functionality, governance control, or other ability to modify, influence, or intervene in the operation of the Safenet Smart Contracts after deployment. The Foundation cannot approve, reject, modify, reverse, delay, censor, or otherwise interfere with any transaction submitted to the Safenet Smart Contracts. The SafeDAO can change the parameters of the Safenet Smart Contracts, but not their code, which is deployed immutably.

3. Eligibility and Restricted Jurisdictions

28. You hereby represent and warrant to other Safenet participants that you:

  1. have the right, authority, and legal capacity to agree with these Rules and that you are of the legal majority age in your country or jurisdiction of residence;
  2. are not subject to personal sanctions issued by the UN, US, EU (EU member states), UK, Japan or Switzerland;
  3. are not a resident of, nor an entity organized, incorporated or doing business in any country or jurisdiction to which the Swiss State Secretariat for Economic Affairs (SECO), the United States, the United Kingdom, the European Union or any of its member states, or the United Nations has imposed embargoes or sanctions, including, but not limited to: Belarus, Burundi, Central African Republic, Congo, DPRK (North Korea), Guinea, Guinea-Bissau, Iran, Iraq, Lebanon, Libya, Mali, Myanmar (Burma), Republic of South Sudan, Russia, Somalia, Sudan, Syria, Ukraine (Donbas region), Venezuela, Yemen, or Zimbabwe (“Restricted Jurisdictions”);
  4. are not (a) the subject of asset freeze, travel ban, financial, economic, human rights, sectoral or trade sanctions administered or enforced by any governmental authority, or (b) otherwise designated on any list of prohibited or restricted parties; and
  5. do not intend to transact with any sanctioned person or any person in any Restricted Jurisdiction trough the Safenet;
  6. participate in Safenet only for lawful purposes and in accordance with these Rules, and you agree not to use Safenet, any Safenet Smart Contract, or any interface to it for any unlawful, fraudulent or malicious purpose, to introduce harmful code, to interfere with or compromise the integrity, security or proper functioning of Safenet or its underlying infrastructure, to reverse engineer it, to access accounts, networks or data you are not authorized to use, or in any way that violates any applicable law or regulation

29. As a Validator you hereby represent and warrant in addition that you:

  1. will not operate a Validator Node if the laws of your countries of residency and/or citizenship prohibit you from doing so in accordance with these Terms;
  2. only operate a Validator Node for your own personal use and act on your own account and not as nominee, agent or front for any undisclosed party;
  3. post your stake from your own funds, free of any third-party interest; and
  4. do not operate a Validator Node from a Restricted Jurisdictions.

30. As a Sentinel you hereby represent and warrant in addition that you:

  1. will not carry out any transaction checking activities if the laws of your countries of residency and/or citizenship prohibit you from doing so in accordance with these Terms;
  2. only carry out transaction checking activities in your own account and not as nominee, agent or front for any undisclosed party; and
  3. post your bond from your own funds, free of any third-party interest.

31. As a Security Council member you hereby represent and warrant in addition that you:

  1. are fully independent of the Foundation and its affiliates, and are not an employee, officer, board member, adviser or contractor of it, nor of any entity it controls; and
  2. are fully independent of every Sentinel, Validator and Interface Operator, and hold no economic interest in any of them.

32. As an Interface Provider you hereby represent and warrant in addition that you:

  1. will not provide an Interface to the Safenet if the laws of your countries of residency and/or citizenship prohibit you from doing so in accordance with these Terms; and
  2. present Safenet as a transaction-checking protocol, and do not present the Foundation or any other single party as its operator or provider.

4. Lifecycle of Safenet checks

33. In the following the lifecycle of a Safenet check is described:

  1. The User initiates a transaction through an integrating interface and requests a check;
  2. The User pays the transaction checking fee in stablecoins in the Oracle Smart Contract;
  3. Sentinels assess the transaction against the risk markers and each casts a Yes or No vote, posting a bond with the vote to the Oracle Smart Contract;
  4. Outcome of voting: A) Unanimous Yes: the user can execute the transaction. B) Unanimous No: the transaction is paused. C) Split: the transaction is paused and the case is referred to the Security Council for final decision.
  5. The Validator set attests the result on-chain by FROST threshold signature, so that the integrating guard can act on it.
  6. On a unanimous outcome, bonds are returned and fees are distributed to the reward pool. On a split outcome, settlement follows the resolution of the Security Council.
  7. Where a transaction is paused, the User may at any time accept the pause or carry the transaction through by the override function.

34. A paused transaction can always be carried through by the User. The override executes on a time delay and requires the cooperation of no other party - no Sentinel, no Validator, no Security Council member, no Interface Operator and no Foundation.

5. Validator and Node Operation

35. A Validator Node is a computer server on the network used to monitor, audit, confirm, or validate transactions on Safenet. If you operate a Validator Node, you are solely responsible for all hardware, software, hosting, and infrastructure costs necessary to operate your Validator Node. The Validator Node exists independently and is operated by you under your own technical environment and infrastructure. These Rules and the applicable documentation https://github.com/safe-research/safenet/blob/main/docs/validator-handbook.md (the “Documentation”) set out the (technical) rules and requirement for the operation of a Validator Node. Through the protocol, SAFE Token holders may delegate SAFE Tokens to your Validator Node in accordance with the rules of the applicable staking smart contract. Any such delegation constitutes a direct interaction between the delegator, the staking contract, and your Validator Node. The source code of the Validator is publicly available for reference at: https://github.com/safe-research/safenet.

36. The delegation and staking smart contract (“Staking Contract”) is a Safenet Smart Contract. You may receive delegated SAFE Token from independent third-party stakers through the Staking Contract. Any such delegation constitutes a direct interaction between delegators and the Staking Contract referencing your Validator Node address, and does not involve the Foundation or any other party acting as an intermediary. The source code of the Staking Contract is publicly available for reference at: https://github.com/safe-research/safenet/blob/main/contracts/src/Staking.sol.

37. The consensus and coordinator smart contracts (together the “Consensus and Coordinator Smart Contracts”) are Safenet Smart Contracts. These contracts facilitate, among other things, the coordination of validator attestations, and the ordering and confirmation of transactions submitted to the Safenet. All interactions with the Consensus and Coordinator Smart Contracts occur directly between Validators, other Safenet participants, and the underlying blockchain infrastructure. The source code of the Consensus and Coordinator Smart Contracts is publicly available for reference at: https://github.com/safe-research/safenet/blob/main/contracts/src/Consensus.sol and https://github.com/safe-research/safenet/blob/main/contracts/src/FROSTCoordinator.sol.

38. The Foundation does not perform validation, transaction execution, or node management on your behalf and does not operate, supervise, or monitor individual Validator Nodes, or as an intermediary between Validator Nodes and Users. The Foundation assumes no responsibility for validator performance, availability, or network outcomes.

1. Establishment and Maintenance of Validator Node

39. In your capacity as Validator you shall operate and maintain a Validator Node necessary to validate transactions on Safenet in accordance with the Documentation. You must comply with all technical specifications, protocol rules, and operational guidance issued from time to time.

2. Operational Requirements

40. In your capacity as Validator you shall maintain reliable uptime and connectivity; process and attest to transactions according to the provided protocol ruleset; follow all technical specifications, updates, and operational guidance; and act in good faith to support Safenet objectives.

41. In particular, you shall verify the applicable Sentinel result and transaction context and attest only eligible unanimous secure results before execution. Insecure, split, incomplete, failed or arbitrated results are not eligible for attestation.

42. You may operate as a Validator only for lawful purposes and in accordance with these Terms. You agree not to use Safenet: (i) for any unlawful, fraudulent, or malicious purpose; (ii) to upload, transmit, or distribute any viruses, worms, malware, ransomware, or other harmful code; (iii) to attempt to interfere with, compromise the integrity or security of, or reverse engineer Safenet or its underlying infrastructure; (iv) to access or attempt to access accounts, networks, or data that you are not authorized to use; (v) to engage in any activity that could disable, overburden, or impair the proper functioning of the protocol; and/or (vi) in any way that violates any applicable law or regulation.

3. Minimum Stake

43. In your capacity as Validator you shall stake at least 3,5 Million SAFE Token on your Validator Node on Ethereum Mainnet (Self-Delegated Stake). You further acknowledge and agree that any SAFE Token holder may additionally stake SAFE Token on your Validator Node (Delegated Stake).

4. Validator Node Operation

44. In your capacity as Validator you shall be solely responsible for all costs (including electrical energy costs) and expenses for your activities as Validator, including for acquiring, installing, maintaining, and securing all hardware, software, hosting, and other equipment for your Validator Node(s). No participant in Safenet will reimburse you for any expenses you incur.

5. Validator Node Security

45. In your capacity as Validator you will establish and maintain reasonable and appropriate safeguards to protect your Validator Node and Validator systems against unauthorized use, destruction, loss, or alteration of the Validator Node and associated digital assets. These safeguards shall include network and data security measures consistent with information technology industry standards (e.g., firewalls, monitoring, and counteraction of external intrusion, regular back-up of systems and data, and troubleshooting).

46. If you discover or are notified of a breach or potential breach of security relating to your Validator Node or Validator Systems, you will immediately (i) notify all other known Validators and the SafeDAO of such breach or potential breach, (ii) investigate and cure the breach or potential breach, and (iii) provide the SafeDAO with reasonable assurance that such breach or potential breach will not recur.

47. You will maintain, patch, and update your Validator systems on a regular and timely basis in accordance with best industry practices. You agree that you will not introduce, and will take all required measures to prevent the introduction of, any malicious code into your Validator systems.

48. By participating as a Validator, you represent that you are financially and technically sophisticated enough to understand the inherent risks associated with using cryptographic and blockchain-based systems, especially staking systems, and that you have a working knowledge of digital assets, validator operations, and blockchain infrastructure. You further understand that blockchain-based transactions are irreversible and public. The markets for digital assets are highly volatile due to factors including adoption, speculation, technology, security, and regulation. You acknowledge and accept the risk that staked assets may lose some or all of their value, and that you may experience significant operational and financial costs associated with running a Validator Node. Accordingly, you understand and agree to assume full responsibility for all risks of participating as a Validator on Safenet.

6. Non-Exclusive Relationship

49. The specific arrangements referred to herein shall not exclude or limit either party from entering into any relationship with any other party. Participation in Safenet does not prevent you from operating validator nodes on other networks.

7. KYC-Checks

50. In your capacity as Validator, the SafeDAO may request that you provide documents reasonably requested to satisfy applicable customer due diligence (“CDD”), know your customer (“KYC”), anti-money laundering (“AML”), or similar legal or regulatory requirements.

6. Sentinel Transaction Checking

51. Safenet relies on independent Sentinels to check transactions submitted to the protocol against the defined risk markers and to vote on the result. All checking activities are carried out solely by Sentinels through their own infrastructure and their own judgement.

52. Sentinels perform checks on transactions submitted to Safenet against the defined risk markers defined by the Users and vote on the result. In your role as Sentinel, you assess the transaction and cast a vote; the Validator set attests the result of that vote on-chain. You do not attest results, and Validators do not perform checks. This separation is a rule of Safenet and may not be circumvented by arrangement between participants.

53. You are solely responsible for all hardware, software, hosting, and infrastructure costs necessary to perform your checking activities. Your infrastructure exists independently and is operated by you under your own technical environment. These Rules and the Documentation set out the risk marker specification, and Safenet the protocol rules (for the operation of a Sentinel. The reference implementation of the checking tooling is publicly available for reference at: https://github.com/safe-research/safenet/tree/main/crates/sentinel-engine.

54. The sentinel oracle smart contract (the “Oracle Contract”) is a Safenet Smart Contract. The Oracle Contract receives and holds User fees and Sentinel bonds, records votes, determines outcomes, and executes the release of fees and bonds and any automatic slashing in accordance with its code. All interactions with the Oracle Contract occur directly between Sentinels, other Safenet participants, and the underlying blockchain infrastructure. The source code of the Oracle Contract is publicly available for reference at: https://github.com/safe-research/safenet/blob/main/contracts/src/SentinelOracle.sol.

55. The Foundation does not perform checks, does not assess transactions, and does not operate, supervise, or monitor individual Sentinels. The Foundation assumes no responsibility for check outcomes, Sentinel performance, availability, or protocol outcomes. The Foundation does not act as an intermediary or operator of these interactions, holds no administration rights over the Oracle Contract, and cannot block, redirect, approve or reverse any movement of funds held by it.

1. Establishment and Maintenance of Checking Capability

56. In your capacity as Sentinel, you shall maintain the technical capability, personnel and infrastructure necessary to check transactions submitted to Safenet in accordance with the Documentation and the risk marker specification. You must comply with all technical specifications, Safenet rules, and the risk marker specification as amended from time to time.

2. Operational Requirements

57. In your capacity as Sentinel, you shall maintain reliable uptime and connectivity; check and vote on transactions within the applicable deadline according to the provided ruleset; follow all technical specifications, updates, and the risk marker specification; and act in good faith to support the integrity of the protocol.

58. In particular, you shall check each transaction referred to you against the risk markers defined in the Arbitration Charter, and shall cast a Yes / Abstain or No vote on the result.

59. You shall perform each check substantively before casting a vote. You shall exercise your own independent judgement in each check. You shall not cast a vote without having performed the check, and you shall not coordinate your vote, or consult on it, with any other Sentinel.

60. You may operate as a Sentinel only for lawful purposes and in accordance with these Terms. You agree not to use Safenet: (i) for any unlawful, fraudulent, or malicious purpose; (ii) to upload, transmit, or distribute any viruses, worms, malware, ransomware, or other harmful code; (iii) to attempt to interfere with, compromise the integrity or security of, or reverse engineer Safenet or its underlying infrastructure; (iv) to access or attempt to access accounts, networks, or data that you are not authorized to use; (v) to engage in any activity that could disable, overburden, or impair the proper functioning of Safenet; (vi) to vote in a manner intended to cause transactions to be paused or passed other than on the merits of the check; and/or (vii) in any way that violates any applicable law or regulation.

3. Bond

61. In your capacity as Sentinel, you shall post a bond as determined by the Documentation to the Oracle Contract for each vote you cast. You shall post each bond from your own funds, free of any third-party interest, security or encumbrance. You acknowledge and agree that where the vote on a transaction is unanimous, all bonds are returned, and that where the vote is split, the bond of the losing side is slashed in accordance with clause 6.4.

62. You acknowledge that the bond is a security deposit posted as a condition of voting. It is not an investment, carries no return, and is not offered or held out as an investment instrument.

4. Slashing

63. In your capacity as Sentinel, you understand and accept that your bond may be slashed under the conditions set out in these Rules and in the Oracle Contract. You acknowledge that slashing operates through an automatic on-chain slashing executed by the Oracle Contract without human intervention, including in non-reveal scenarios based upon the decision of the Security Council on a split vote. Any slashed bonds accrue in the SafeDAO-controlled Safe on Gnosis chain.

5. Operation Costs

64. In your capacity as Sentinel, you shall be solely responsible for all costs (including electrical energy costs) and expenses for your activities under these Rules, including for acquiring, installing, maintaining, and securing all hardware, software, hosting, and other equipment used in your checking activities. No participant in Safenet will reimburse you for any expenses you incur.

6. Security

65. In your capacity as Sentinel, you will establish and maintain reasonable and appropriate safeguards to protect your checking systems and key material against unauthorized use, destruction, loss, or alteration. These safeguards shall include network and data security measures consistent with information technology industry standards (e.g., firewalls, monitoring, and counteraction of external intrusion, regular back-up of systems and data, and troubleshooting).

66. If you discover or are notified of a breach or potential breach of security relating to your checking systems, you will immediately (i) notify all other known Sentinels and the SafeDAO of such breach or potential breach, (ii) investigate and cure the breach or potential breach, and (iii) provide reasonable assurance that such breach or potential breach will not recur.

67. You will maintain, patch, and update your systems on a regular and timely basis in accordance with best industry practices. You agree that you will not introduce, and will take all required measures to prevent the introduction of, any malicious code into your systems.

7. Transaction Data

68. You will not use the contents of any transaction referred to you for checking to front-run, or to obtain any advantage in relation to the transaction or the Users.

8. Risk Acknowledgement

69. By participating as a Sentinel, you represent that you are financially and technically sophisticated enough to understand the inherent risks associated with using cryptographic and blockchain-based systems, and that you have a working knowledge of digital assets, transaction risk assessment, and blockchain infrastructure. You further understand that blockchain-based transactions are irreversible and public. You acknowledge and accept the risk that bonds may be forfeited, that rewards are variable and not guaranteed, and that you may experience significant operational and financial costs associated with acting as a Sentinel. Accordingly, you understand and agree to assume full responsibility for all risks of participating as a Sentinel on Safenet.

9. Non-Exclusive Relationship

70. The specific arrangements referred to herein shall not exclude or limit either party from entering into any relationship with any other party. Participation in Safenet does not prevent you from participating in Safenet or operating validator nodes/sentinels on other networks.

10. KYC and Compliance

71. In your capacity as Sentinel, the SafeDAO may request that you provide documents reasonably requested to satisfy applicable CDD, KYC, and AML, or similar legal or regulatory requirements, including in respect of your ultimate beneficial owners and your payout addresses.

7. Security Council Obligations and Security Council Membership

72. The Security Council determines the outcome of checks on which the Sentinel vote was split by resolving whether the check is answered YES or NO, or that no decision is reached. The resulting consequences, including the refund of user fees, the release of bond shares to prevailing Sentinels and the execution of slashing, are carried out automatically by the Oracle Contract in accordance with the applicable protocol rules and parameters. Members are appointed by resolution of the SafeDAO and serve in a personal capacity.

73. If you serve as a member of the Security Council, you do not act on behalf of, and owe no duty to, the Foundation, the SafeDAO, any Sentinel, any Validator, any Interface Operator, or any User. You decide each matter on its merits, on the evidence before you, and in accordance with the Arbitration Charter.

74. These Rules create no contractual relationship between you in your capacity as Security Council member and the Foundation and no employment, agency, partnership or service relationship with any party. Appointment confers no entitlement to continuation, to reappointment, or to any particular term of office.

1. Independence

75. In your capacity as member of the Security Council, you represent and warrant that, as at the date of your appointment and continuously throughout your term, you:

  1. are not an employee, officer, director, foundation board member, adviser, contractor or agent of the Foundation, nor of any entity affiliated with the Foundation;
  2. are not an employee, officer, director, adviser, contractor, agent beneficial owner, or operator of any Sentinel in Safenet;
  3. have no financial interest in the outcome of any matter that may come before the Security Council, and no arrangement under which any person may benefit from a decision in which you participate;
  4. are not subject to any instruction, mandate, understanding or expectation, whether contractual or informal, as to how you will decide any matter or class of matters, and will accept none;
  5. receive no remuneration, benefit or consideration in connection with your membership other than as provided for in the Arbitration Charter;
  6. have completed background verification and conflict screening, and have provided complete and accurate information for that purpose;
  7. possess demonstrated expertise in security governance sufficient to discharge the duties of office; and
  8. act in your own name and not as nominee, representative or proxy for any other person.

76. Your independence is a condition of your appointment and of the validity of the decisions in which you participate, not merely a standard of conduct. Loss of independence terminates your eligibility to sit on any matter affected by it.

2. Disclosure, Conflicts and Recusal

77. In your capacity as member of the Security Council, you will disclose to the Security Council and to the SafeDAO, promptly and in writing, any circumstance that affects or may reasonably be perceived to affect your independence, including any holding, relationship, appointment, offer of appointment, or approach falling within clause 7.1. Disclosure is a continuing obligation and applies to circumstances arising after appointment as it does to those existing at appointment.

78. You will recuse yourself from any matter in which you are conflicted, or in which a reasonable observer would consider your independence to be in question, and you will do so at the earliest point at which the conflict is or ought to be apparent. Where you are uncertain, you will disclose and seek the determination provided for in the Arbitration Charter rather than decide the question yourself.

79. You will not participate in, observe, or seek to influence the deliberation of any matter from which you have recused yourself, and you will not be counted towards quorum in it.

80. You will not accept, solicit or entertain any communication from a party to a matter, or from any person acting for a party, otherwise than through the procedure set out in the Arbitration Charter, and you will disclose any such communication received.

3. Adherence to the Arbitration Charter

81. In your capacity as member of the Security Council, you accept the Arbitration Charter (as amended from time to time by the SafeDAO. The Arbitration Charter governs the conduct of proceedings, and you hereby agree to observe it in every matter.

82. Where the Arbitration Charter and these Rules differ, the Arbitration Charter governs the conduct of proceedings and these Rules govern your appointment and your obligations as a Security Council member.

4. Confidentiality

83. You will treat as confidential the evidence, submissions and deliberations in any matter, and the identity and information of the participants concerned. You will use such information solely for the purpose of deciding the matter, will not disclose it to any third party except as the Arbitration Charter requires or applicable law compels, and will not use it to trade or to obtain any advantage. This obligation survives the end of your term.

84. Nothing in this clause prevents publication of a decision and its reasons in the form provided for in the Arbitration Charter.

5. KYC and Compliance

85. In your capacity as Security Council member, you will promptly provide the documents reasonably requested to fulfil documentation requirements under any applicable customer CDD, KYC, AML regulations, or sanctions screening requirements.

8. Interface Provider Requirements

86. In your capacity as Interface Provider, you operate your interface on your own account and in your own name. You are solely responsible for all hardware, software, hosting and infrastructure costs necessary to operate your interface. Your relationship with your users is yours alone.

87. The Foundation does not operate, supervise, or monitor any interface, does not endorse any interface, and assumes no responsibility for the operation, security, availability or content of your interface or for any loss arising from it.

1. Presentation of Safenet & Data and Display

88. In your capacity as Interface Provider, you shall present Safenet as a transaction-checking protocol. You shall not present yourself, the Foundation, or any other single party as the provider, operator, or owner of the Safenet transaction-checking service, and shall not state or imply that any such party performs checks, controls outcomes, or is responsible for them.

89. You shall display these Rules in your interface and shall ensure that every User accepts them before submitting a transaction to Safenet through your interface.

90. You shall not state or imply that you perform the checking of transactions, that you determine the outcome of a check, or that you exercise any influence over Sentinels, Validators or the Security Council.

91. You shall display information derived from Safenet and from the underlying blockchain accurately and completely. You shall not modify, filter, suppress, reorder, aggregate or annotate on-chain information in a manner that alters its meaning or that could mislead a User.

2. Description of Safenet Output

92. In your capacity as Interface Provider, you shall describe Safenet output as informational. You shall not describe Safenet, or any output of it, as protecting, guaranteeing, insuring, securing, preventing, stopping or blocking anything, and shall not describe a transaction as safe or risk-free by reference to a Safenet check.

93. You shall describe the pausing of a transaction as a pause. You shall not describe it as a block, a stop, a rejection, a prevention, or a freeze, in your interface, in your documentation, or in your marketing.

94. You shall not publish fixed yield or return figures, including APY figures, in connection with SAFE Tokens, staking, rewards or Safenet.

3. The Override

95. Where a transaction is paused, you shall, in your capacity as Interface Provider, present the override to the user at the point of the pause, clearly and in a form the user can exercise alone, without assistance from you or from any other party.

96. You shall not design, order, label, delay or otherwise present your interface in a manner that discourages, impedes or conceals the exercise of the override, and shall not impose any condition, step or requirement on its exercise beyond those the protocol itself imposes.

4. Security

97. In your capacity as Interface Provider, you shall establish and maintain reasonable and appropriate safeguards to protect your interface and its users against unauthorized use, compromise, and manipulation, consistent with information technology industry standards.

98. If you discover or are notified of a breach or potential breach of security relating to your interface that affects or may affect Safenet Users, you will immediately (i) notify the SafeDAO, (ii) investigate and cure the breach or potential breach, and (iii) provide reasonable assurance that it will not recur.

9. Economic Security

99. Safenet involves four distinct flows: fees paid by Users for a check, bonds posted by Sentinels with each vote, stake posted by Validators to participate, and rewards paid periodically to the various Participants.

1. Transaction Fees

100. Interactions with the Safenet Smart Contracts require payment of blockchain transaction fees in the native asset of the relevant network: ETH on Ethereum Mainnet, including for interactions with the Staking Contract, and xDAI on Gnosis Chain, including for interactions with the Safenet contracts (“Transaction Fees”).

101. Transaction Fees are determined exclusively by the relevant blockchain network and depend on network conditions at the time a transaction is submitted. Transaction Fees may be subject to significant volatility and are non-refundable. Transaction Fees are paid directly by you to the blockchain network. No participant within Safenet determines, influences, subsidizes, or reimburses any Transaction Fees.

102. No participant within Safenet does guarantee you that any transaction submitted by you will be successfully processed or confirmed by the blockchain network and no participant within Safenet be responsible for any failed, delayed, or cancelled transactions resulting from insufficient Transaction Fees or network conditions.

2. User Fees

103. A transaction checking fee (the “User Fee”) is payable for each check. You pay the User Fee to the Oracle Contract. The User Fee is paid directly to the Oracle Contract; no party receives it on your behalf or acts as an intermediary in its payment.

104. User Fees are payable in a stablecoin designated in the protocol parameters. User Fees are not payable in SAFE Tokens, and no party will request or accept payment of a fee from you in SAFE Tokens.

105. The amount of the User Fee is a parameter of the Oracle Contract, set and amended by the SafeDAO in accordance with the protocol rules. The User Fee applicable to a check is the fee in force at the time the check is requested. The Foundation does not set the User Fee and does not receive it.

106. The User Fee is payable for the performance of a check. It is not payment to any particular Sentinel or Validator, and no part of it is allocated to any participant by reference to your check. User Fee collected by the Oracle Contract flow to a reward pool from which Sentinels are compensated periodically, and you understand and acknowledge that you have no relationship with, and acquire no claim against, any Sentinel by reason of paying a User Fee.

107. The User Fee is payable for the performance of a check and not for any outcome of it. You acknowledge that a check may result in the transaction being passed or paused, that the result is informational and is neither a guarantee nor an assurance that a transaction is safe, that false positives and false negatives are possible, and that the User Fee is payable in each case.

108. The User Fee is not refundable, except that where the check is referred to the Security Council and the Security Council determines that the User Fee is to be refunded to you. Any refund is executed by the Oracle Contract and is made in the asset in which the User Fee was paid. You acknowledge that pausing a transaction does not entitle you to a refund. A paused transaction may be carried through by you alone by means of the override, and the User Fee remains payable.

109. The User Fee does not create any service relationship between you and the Foundation, the SafeDAO, or any Sentinel, Validator, Security Council member or Interface Provider, and none of them is your counterparty in respect of it. No service level, availability, response time or standard of accuracy is promised to you in consideration of the User Fee.

110. A portion of the User Fee collected by the Oracle Contract may be retained as a protocol fee, as determined by the protocol parameters set by the SafeDAO.

111. You are solely responsible for determining the tax treatment of fees you pay and for any tax arising. No party makes any representation as to the tax treatment of fees in any jurisdiction.

3. Validator Rewards

112. Validator rewards (the “Validator Reward(s)”) are determined based on (i) your total stake and (ii) your measured participation rate during the applicable evaluation period. No Validator rewards shall accrue for any period in which your participation rate falls below the threshold as defined in the Documentation (currently seventy-five percent (75%); subject to change at the sole and fullest discretion of the SafeDAO).

113. Subject to the fulfilment of all required activities, you, in your capacity as Validator, are entitled to receive a commission equal to five percent (5%, subject to change at the sole discretion of the SafeDAO) of rewards attributable to delegated stake, which commission shall be deducted prior to distribution to delegators. All reward distributions occur on Ethereum.

114. Validators and delegators must actively claim rewards from the Safenet Reward Distribution Safe which is a Safenet Smart Contract; unclaimed rewards are not automatically delivered. You solely bear the associated claiming costs. All Rewards described herein are fully discretionary.

115. Nothing in these Rules shall be construed as creating any obligation on the part of the Foundation or any of its affiliates to fund or continue funding rewards, subsidies, or any other form of incentives for the operation of Validator Nodes.

4. Bonds

116. In your capacity as Sentinel you shall post a bond as determined by the Documentation to the Oracle Contract for each vote you cast (the “Bond(s)”).

117. Where the vote on a transaction-check is unanimous, the Bonds of all Sentinels who voted on that transaction-check are returned by the Oracle Contract upon claiming. Where the vote on a transaction-check is split, the Bonds of the Sentinels on the prevailing side are returned and the bonds of the Sentinels on the losing side are forfeited, on and with effect from the determination of the matter by the Security Council.

118. A forfeited Bond ceases to be yours on forfeiture. You have no claim to a forfeited Bond, to any part of it, or to any amount derived from it. Forfeited Bonds are applied to the unwrapped SafeDAO Treasury or as determined by the protocol funds receiver parameter set by the SafeDAO from time to time. The application of forfeited Bonds is executed by the Oracle Contract. No party, including the Foundation, receives, holds, or may direct the application of any forfeited Bond otherwise than as that clause provides.

119. In your capacity as Sentinel you hereby agree that the forfeiture of a Bond is a contractual penalty to which you have hereby and by placing the Bond consented in advance. Where a Bond is returned, it is returned without interest and without any payment in respect of the period for which it was held. You acknowledge that a Bond held by the Oracle Contract generates no return for you and is not invested on your behalf.

5. Sentinel Reward

120. User Fee paid for checks are collected by the Oracle Contract in a stablecoin. Sentinel rewards (the “Sentinel Reward(s)”) are paid to Sentinels from that pool upon claiming. In your capacity as Sentinel you acknowledge that in your capacity as Sentinel you are not paid by a User for a particular check. The payment for that check is not paid to you, and that there is no link between any individual User Fee and any Sentinel Reward you receive.

121. Sentinel Rewards are allocated from the pool periodically, by reference to the checking activity you have performed over the period and the performance criteria set out in the reward methodology approved by the SafeDAO. Sentinel Rewards are not paid per transaction checked or per vote cast. You are compensated for the security contirbutions to the Safenet protocol.

122. In your capacity as Sentinel, you acknowledge and agree that Sentinel Rewards are variable and are not guaranteed; that no minimum, fixed or expected level of Sentinel Reward is promised, represented or implied; that the Sentinel Reward methodology and the parameters governing allocation may be amended by the SafeDAO from time to time; and that no representation as to yield, return or APY is made to you by any party. The Foundation does not calculate rewards for the purpose of authorising payment, does not approve individual reward periods and does not sign or execute distributions.

123. In addition, you, in your capacity as Sentinal, are entitled to additional rewards which distributed through a Safe Smart Contract that allocates entitlements by reference to a Merkle root. The Merkle root is set and updated at the sole discretion of the SafeDAO. Your entitlement to any reward arises only once it is included in a published Merkle root - no entitlement arises to such additional rewards before that point.

124. All reward distributions occur on Ethereum and become claimable to you and do not happen automatically. All costs associated with submitting and processing a claim, including network transaction fees (gas), shall be borne by you.

125. You are solely responsible for determining the tax treatment of any Sentinel Reward you receive and for the payment of any tax arising. No party makes any representation as to the tax treatment of rewards in any jurisdiction.

10. Governance

126. Safenet is governed by the SafeDAO. Decisions of the SafeDAO are taken by vote on snapshot and executed on-chain through Reality.eth and SafeSnap.

127. The SafeDAO decides, in accordance with DAO rules

  1. the composition of the Sentinel set and the Validator set, including admissions, replacements and removals;
  2. the appointment and removal of members of the Security Council, and the approval of the Arbitration Charter under which the Security Council operates;
  3. the parameters of the Safenet Smart Contracts;
  4. the risk marker specification and the technical specifications applicable to participants; and
  5. the amendments to these Rules.

128. The parameters of the Safenet Smart Contracts are set through the Safenet Governance Account, being the SafeDAO Safe on Gnosis Chain (0x9D02bed59170cdE96782Ea9a9b17F9bCF4916127 aug Gnosis Chain) designated for that purpose. That account has no usable owner execution path: transactions are executed exclusively by the SafeDAO through Snapshot, Reality.eth and SafeSnap. The governance address is immutable within a given deployment of the Oracle Contract. The Foundation cannot execute parameter changes and does not control the Safenet Governance Account.

129. The Foundation is not the operator of Safenet and does not govern or participate in the governance of Safenet. The Foundation’s role is limited to (i) proposing candidates for the Sentinel, Validator, and Security Council roles to the SafeDAO, (ii) conducting sanctions and AML screening of candidates on behalf of the SafeDAO, and (iii) objecting to the implementation of a SafeDAO resolution solely to the extent necessary to prevent a violation of applicable mandatory law. Any such right is discretionary and does not create any duty to monitor, review, block, or challenge any proposal or resolution.

130. You acknowledge that the parameters governing your participation — including the fee, the bond amount, the slashing amount, the minimum stake and the reward methodology — may be amended by the SafeDAO from time to time, and that amendments apply to you from the time they take effect on-chain. No party guarantees that any parameter will remain unchanged.

11. Disclaimers

1. General Disclaimers & Disclaimed Warranty

131. The Foundation does not provide staking services, validation services, transaction checking services, asset management, custody, brokerage, advisory, or any other financial or investment-related services. The Foundation has no obligation to monitor the Safenet Smart Contracts, any Safenet activities, or blockchain network conditions and is under no duty to warn you or any other participant of Safenet of any risks, vulnerabilities, exploits, or adverse events. The Foundation does not assume any obligation to intervene, suspend, mitigate, reverse, or remedy any losses or adverse effects arising from participation in Safenet.

132. Neither a participant in Safenet nor the Foundation makes any representations or warranties with respect to Safenet, including its security, availability, or economic outcomes. Safenet is made available on an “as-is” and “as-available” basis. Each participant in Safenet and the Foundation hereby expressly disclaims all representations and/or warranties of any kind, express or implied, including all warranties of merchantability, fitness for a particular purpose, non-infringement, or any warranty regarding any economic benefit.

133. Neither a participant in Safenet nor the Foundation warrants that Safenet will operate uninterrupted or be error-free, and makes no warranty concerning the accuracy, reliability, or completeness of any information or data obtained or derived through the use of Safenet. Each participant in Safenet and the Foundation disclaims any responsibilities with respect to access of data from or the functioning of Nodes on Ethereum and/or any other blockchain (e.g. Gnosis chain).

2. Specific Disclaimer of Warranties for Safenet Smart Contracts

134. The Safenet Smart Contracts, including all associated smart contract code, delegation mechanisms, reward distribution logic, modules are provided strictly on an “as is” and “as available” basis.

135. To the maximum extent permitted under applicable law, Safenet, the Safenet Smart Contracts, and all documentation and tooling relating to them are provided “as is” and “as available”, and each of the participants of Safenet and the Foundation, and their respective affiliates, officers, employees, agents, and licensors expressly disclaims, in favour of itself and of every other of them, all warranties, whether express, implied, statutory, or otherwise, including without limitation any implied warranties of: (a) merchantability or fitness for a particular purpose; (b) non-infringement of third-party rights; (c) title or unencumbered ownership of staked or bonded assets; (d) accuracy, completeness, or timeliness of on-chain state, check results, attestations, or reward data; (e) uninterrupted, available, or error-free operation of Safenet, any Safenet Smart Contract, or any interface; (f) correct calculation or timely distribution of rewards; (g) absence of bugs, vulnerabilities, or exploits; (h) immunity from slashing, bond forfeiture, or other penalties; (i) the detection of any particular risk, or the absence of false positives or false negatives in any check; or (j) compliance with any applicable securities, commodities, or money-transmission laws in any jurisdiction.

136. Without limitation, no warranty is given by any participant in Safenet and/or the Foundation that the Safenet Smart Contracts (i) are free from bugs, errors, vulnerabilities, or defects; (ii) will operate uninterrupted or securely; or (iii) are fit for any particular purpose or compliant with any applicable requirements. You expressly understand and accept that the Safenet Smart Contracts may contain errors or unforeseen issues. Interactions with smart contracts involve inherent technical and economic risks, including potential loss of tokens, rewards, or staking position; and no guarantees are made regarding performance, availability, or outcomes.

3. Specific Disclaimer of Warranties for Safenet Check Outputs

137. The output of a Safenet check is information. It is not advice, a recommendation, an assurance, a certification, an approval, or a warranty of any kind, and it is not financial, legal, tax or investment advice.

138. You shall not rely on the output of a check. You acknowledge that the decision whether to proceed with any transaction is yours alone, that you must form your own judgement on it, and that a check neither replaces nor reduces your responsibility to satisfy yourself as to the transaction before you authorise it.

139. A result indicating that no risk marker was identified is not a statement that a transaction is safe, legitimate, correct, or free from risk. It is a statement that the risk markers applied did not produce a positive result, and nothing more. A transaction may be fraudulent, mistaken, harmful to you, or otherwise contrary to your interests notwithstanding such a result.

140. A result pausing a transaction is not a statement that a transaction is fraudulent, unlawful, or harmful. It is a statement that a risk marker was identified. You may carry the transaction through by means of the override, and the decision to do so is yours.

141. To the maximum extent permitted under applicable law, no warranty is given, by any party, that: (i) any check will identify any particular risk, or any risk at all; (ii) the risk markers applied are complete, current, or adequate to identify any category of risk; (iii) a check is free from false positives or false negatives; (iv) a check will be performed, completed, or attested at all, or within any period; (v) the assessment of any Sentinel is accurate, or that Sentinels have applied the risk markers correctly or consistently; (vi) any attestation correctly reflects the outcome of the check to which it relates; or (vii) the output displayed to you in any interface corresponds to the result attested on-chain.

142. You acknowledge that checking is performed by independent Sentinels exercising their own judgement, that neither the Foundation nor any other party performs, supervises, reviews or verifies their assessments, and that no party is in a position to warrant them.

4. Specific Disclaimer on Delegation Risk and No Recourse

143. By staking SAFE Tokens to a Validator Node, you acknowledge that you do so at your own risk and on your own assessment of that Validator; that your staked Tokens may be reduced or forfeited as a result of the acts or omissions of that Validator, including conduct you cannot observe or control; that you have no claim against the Validator, the Foundation, or any other participant in respect of any such reduction or slashing; that rewards are variable, not guaranteed, and may be nil; that you cannot withdraw your stake on demand and remain exposed throughout the applicable unstaking period; and that staking confers no role in Safenet, no right in respect of any check, fee or bond, and no entitlement to any service.

5. Specific Disclaimer on Sentinel Risks and Forfeiture Irrespective of Merits

144. As a Sentinel you acknowledge that the slashing of your Bond does not depend on whether your assessment was correct, and that a determination against you results in forfeiture whether or not you performed the check properly and whether or not the transaction in fact carried the risk in question. No party warrants to you the conduct, competence, availability or good faith of any other Sentinel, and you acknowledge that your exposure under these Terms may arise from the acts or omissions of participants whose conduct you cannot observe or control.

12. Limitation of Liability

145. You understand and acknowledge that the Foundation shall not be liable for any and all damages, losses, or injuries caused by or otherwise related to your participation in Safenet, under any cause or action whatsoever in any jurisdiction, including actions for breach of warranty, breach of contract, or tort.

146. In particular, the Foundation will not be responsible or liable to you for any losses, damages, or claims arising from: (1) operational errors, including misconfigured nodes or incorrect transactions; (2) server failure or data loss; (3) corrupted systems or data; (4) viruses or other technologically harmful material affecting your systems; or (5) Validator, Sentinel and/or Security Council performance or outcomes, including downtime, double-signing, censorship, or failure to distribute rewards.

147. The Foundation’s liability is limited to direct damages arising out of acts of intent and gross negligence. Any liability for indirect damages or consequential damages, including loss of profit, and/or damages arising out of negligent conduct, to the maximum extent permitted by applicable law, is expressly excluded.

13. Miscellaneous

1. Governing Law and Jurisdiction

148. These Rules shall be governed by and construed in accordance with substantive Swiss law, excluding the Swiss conflict of law rules. The application of the United Nations Convention for Contracts for the International Sale of Goods (CISG) is hereby expressly excluded.

149. Any dispute arising out of or in conjunction with these Rules shall be submitted to the exclusive jurisdiction of the ordinary courts of Zug, Switzerland.

2. Class Action Waiver

150. To the fullest extent permitted by any applicable law, you waive your right to participate in a class action lawsuit or a class-wide arbitration against any individual or entity involved in Safenet.

3. Force majeure

151. Certain events beyond a participant’s reasonable control may prevent, impair, delay, or otherwise affect that participant’s ability to perform actions described in these Rules. No participant and neither the Foundation is liable for any failure delay, interruption, or impairment of performance resulting from such events, including: acts of God, natural disaster, war, terrorism or civil unrest; any act or order of a governmental, regulatory or judicial authority; failure, congestion, halt, fork or reorganisation of any blockchain; failure of any node, RPC provider, oracle, screening service or other third-party infrastructure; failure or depeg of any stablecoin; any bug, vulnerability, exploit or attack affecting any smart contract or blockchain; and failure of internet, hosting or power infrastructure. Where the event prevents your participation for more than 3 days, your participation may be suspended or ended, and no claim arises by reason of that suspension or ending.

4. No Partnership

152. Nothing in these Rules creates any partnership, simple partnership, joint venture, association, agency, employment or fiduciary relationship between you and any other participant, the Foundation, the SafeDAO or any other person. Each participant acts independently, in its own name and for its own risk. No participant is the agent, representative or auxiliary person of any other participant or of the Foundation, and none has authority to bind any other. No participant is liable for the acts or omissions of any other. Participants do not pursue a common purpose with pooled means.

5. Notices

153. To be valid, all notices permitted or required under these Rules must be sent via mail (or email followed by certified mail), to the address of the recipient. Notices will be deemed given on receipt by the applicable party.

6. Queries, Remarks and Suggestions

154. Queries, remarks and suggestions concerning the protocol should be raised through the SafeDAO forum at https://forum.safefoundation.org/.