1. Executive Summary

Sovereign Infrastructure for Autonomous Art Circulation

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Version: 2.0 (Cosmos Architecture) Date: December 2025 Classification: Technical Documentation Status: Implementation Specification Network: nonterritorial.network

Authors: Tomas Silgalis — Co-Founder, Nonterritorial Foundation Barbara Baisi — Co-Founder, Nonterritorial Foundation

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1.1 Project Overview

Nonterritorial is a sovereign blockchain infrastructure enabling physical art exhibitions to circulate globally without shipping, insurance, or institutional gatekeeping. Built on Cosmos SDK with CosmWasm smart contracts, the network operates as purpose-built cultural infrastructure rather than an application deployed on general-purpose chains.

1.2 Core Innovation

Unlike existing blockchain art platforms that deploy on Ethereum or its scaling solutions, Nonterritorial builds a sovereign chain where:

• Anti-speculation is architectural: The consensus layer itself is designed for circulation, not exchange

• Governance serves cultural values: Protocol decisions prioritize artistic integrity and accessibility

• Infrastructure is permanent: No upstream dependencies; longevity depends only on community commitment

• Ecosystem potential is native: Through IBC, Nonterritorial becomes foundation for interconnected cultural infrastructures

1.3 Key Metrics

Metric	Target
Year 5 Exhibitions	1,200
Year 5 Annual Licenses	10,000
Year 5 Gross Revenue	€20,000,000
Year 5 Artist Payments	€8,000,000
Sustainability Target	Month 18
Full DAO Autonomy	Year 10

1.4 Technical Stack

┌─────────────────────────────────────────────────────────────────┐
│                      APPLICATION LAYER                          │
│         CosmWasm Smart Contracts (Rust)                        │
├─────────────────────────────────────────────────────────────────┤
│                      CONSENSUS LAYER                            │
│         Tendermint BFT (CometBFT)                              │
├─────────────────────────────────────────────────────────────────┤
│                      NETWORK LAYER                              │
│         Cosmos SDK v0.50+ / IBC Protocol                       │
├─────────────────────────────────────────────────────────────────┤
│                      STORAGE LAYER                              │
│         IAVL+ Tree State / IPFS Content                        │
└─────────────────────────────────────────────────────────────────┘

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2. Problem Analysis

2.1 The Gallery System's Structural Failure

The contemporary art market operates through a concentration model that systematically excludes the majority of artists and audiences:

Geographic Concentration

• New York, London, and Hong Kong account for 82% of global auction sales

• Gallery representation clusters in 15 cities worldwide

• 95% of humanity has no access to contemporary art institutions

Economic Gatekeeping

• Gallery representation requires existing wealth, social capital, and geographic privilege

• The median professional artist earns €8,000-12,000 annually from art sales

• Over 70% of art school graduates abandon artistic practice within 10 years, primarily for economic reasons

Speculation Dominance

• Artworks function as financial instruments for wealth preservation and speculation

• Aesthetic and cultural value subordinates to market performance

• Secondary market dynamics create perverse incentives (artist death increases prices)

Circulation Constraints

• Shipping costs: €5,000-50,000 per international exhibition

• Insurance: 0.5-2% of declared value annually

• Crating, customs, courier travel multiply expenses

• Result: only wealthy institutions can program internationally

2.2 The NFT Experiment's Failure

The 2021-2022 NFT phenomenon tested blockchain's potential for art. It failed for structural reasons:

Financialization Over Function

• NFT platforms optimized for trading volume, not cultural circulation. Royalty structures incentivized speculation. Platform fees extracted value without building lasting infrastructure.

Architectural Assumptions

• ERC-721 and similar standards assume transferability as default. "Non-transferable" implementations fight the architecture rather than embody values. This creates perpetual tension between intent and infrastructure.

No Physical Connection

• Digital-only focus ignored the embodied experience of art. The "metaverse" promised virtual galleries but delivered speculation on JPEGs.

Collapse

• NFT trading volume fell 97% from peak. Major platforms face insolvency. The experiment demonstrated blockchain's potential while proving that speculative architecture serves speculation, not culture.

2.3 The Infrastructure Gap

Neither galleries nor NFT platforms solve the fundamental problem: permanent infrastructure for art to circulate independent of institutional gatekeepers, resistant to speculative capture, accessible regardless of geography or wealth.

This infrastructure must be:

• Sovereign: Not dependent on external platform decisions

• Anti-speculative: Architecturally, not just contractually

• Sustainable: Self-funding through operation, not external subsidy

• Accessible: Economically viable for hosts worldwide

• Permanent: Designed for decades, not platform lifecycles

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3. Theoretical Foundations

3.1 From Ownership to Experienceship

Traditional art circulation assumes ownership transfer: collectors buy objects, institutions borrow from collections, provenance tracks ownership chains. Nonterritorial operates on a different premise: experienceship.

What circulates is not ownership but the capacity to experience. Hosts license exhibitions; artists retain all rights. No property transfers. The economic model serves experience creation, not asset accumulation.

This shift has profound implications:

• Value creation: Revenue derives from experiences hosted, not objects traded

• Artist relationship: Artists are network participants, not asset originators

• Host relationship: Hosts are cultural producers, not temporary custodians

• Audience relationship: Audiences access experiences, not view possessions

3.2 The Cinematic Preview Framework

Physical exhibitions become circulating experiences through the Cinematic Preview:

Physical Installation → Cinematic Documentation → Global Circulation
    (singular)              (reproducible)           (infinite)

The documentation is not a recording of something else; it is the exhibition in its circulating form. High-quality audiovisual capture, spatial audio, atmospheric documentation create experiences that preserve and transmit the encounter.

This is not compromise but transformation. Just as a musical composition exists both as score and performance, an exhibition exists both as installation and cinematic form.

3.3 Archipelago Architecture

Édouard Glissant's concept of the archipelago—in which islands maintain distinct identity while existing in relation—informs Nonterritorial's design philosophy.

Against Continental Thinking

• Continental models assume unified territory, central governance, hierarchical structure. Platforms like Ethereum operate continentally: one chain, shared security, common governance.

Archipelago Principles

• Sovereignty: Each island governs itself

• Relation: Islands connect without subordination

• Opacity: Not everything must be transparent to participate

• Creolization: Interaction creates new forms without erasing origins

Implementation

The Cosmos ecosystem embodies archipelago thinking: sovereign chains maintaining independence while communicating through IBC. Nonterritorial becomes one island in an archipelago of cultural infrastructures.

3.4 Autonomous Infrastructure

Autonomy here means operational independence—infrastructure that runs itself through economic design rather than continuous external intervention.

Self-Sustaining Economics

• Revenue from licensing funds operations. Commission funds generate new exhibitions. The system requires no permanent subsidy.

Governance Independence

• No external platform controls protocol decisions. The Foundation's role diminishes to zero by Year 10.

Technical Independence

• No upstream chain dependencies. Validators aligned with cultural mission maintain the network.

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4. Architectural Philosophy

4.1 Why Sovereign Infrastructure

The decision to build a sovereign chain rather than deploy on existing infrastructure reflects fundamental values:

Architectural Embodiment

• Values should be architectural, not exceptional. On EVM chains, preventing transfer requires blocking default behaviour. On a sovereign chain, we design what the chain does, not what it prevents.

Governance Alignment

• General-purpose chains govern for general purposes: security, scalability, ecosystem growth. Cultural infrastructure requires cultural governance: artistic integrity, accessibility, preservation.

Temporal Alignment

• Ethereum is 10 years old. Cultural infrastructure must think in longer timeframes. Sovereign infrastructure's permanence depends only on community commitment, not upstream platform decisions.

Ecosystem Potential

• Through IBC, Nonterritorial becomes foundation for interconnected cultural infrastructures. Other chains for music, literature, performance can connect while maintaining sovereignty. The archipelago emerges.

4.2 Why Cosmos SDK

Requirement	Cosmos Solution	EVM Alternative
Non-transferable tokens	No transfer message type at consensus level	Contract-level blocking of default behaviour
Cultural governance	Custom governance module serving cultural values	Subject to platform governance priorities
Long-term sovereignty	Independent chain, no upstream dependencies	Dependent on host chain evolution
Ecosystem interoperability	Native IBC protocol	Bridges with security tradeoffs
Purpose-built economics	Custom fee/reward structures	Constrained by platform economics
Validator alignment	Recruit validators for cultural mission	Generic validator set

4.3 Why CosmWasm

CosmWasm provides smart contract capability on Cosmos chains with significant advantages:

• Rust Safety: Rust's type system and ownership model prevent entire classes of vulnerabilities common in Solidity: reentrancy, integer overflow, access control errors.

• Deterministic Execution: Wasm provides deterministic execution across heterogeneous hardware, essential for consensus.

• Upgradability: CosmWasm supports contract migration, enabling fixes and improvements without chain forks.

• Performance: Compiled Wasm executes significantly faster than EVM bytecode.

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5. Technical Architecture

5.1 System Overview

┌─────────────────────────────────────────────────────────────────────────┐
│                         NONTERRITORIAL CHAIN                            │
│                                                                         │
│  ┌─────────────────────────────────────────────────────────────────┐   │
│  │                      APPLICATION MODULES                         │   │
│  │                                                                  │   │
│  │  ┌──────────────┐ ┌──────────────┐ ┌──────────────┐            │   │
│  │  │  Exhibition  │ │   License    │ │   Payment    │            │   │
│  │  │    Module    │ │    Module    │ │    Module    │            │   │
│  │  └──────────────┘ └──────────────┘ └──────────────┘            │   │
│  │                                                                  │   │
│  │  ┌──────────────┐ ┌──────────────┐ ┌──────────────┐            │   │
│  │  │  Governance  │ │  Provenance  │ │     IBC      │            │   │
│  │  │    Module    │ │    Module    │ │   Gateway    │            │   │
│  │  └──────────────┘ └──────────────┘ └──────────────┘            │   │
│  │                                                                  │   │
│  └─────────────────────────────────────────────────────────────────┘   │
│                                                                         │
│  ┌─────────────────────────────────────────────────────────────────┐   │
│  │                      COSMOS SDK CORE                             │   │
│  │  Bank │ Staking │ Slashing │ Distribution │ Auth │ Params      │   │
│  └─────────────────────────────────────────────────────────────────┘   │
│                                                                         │
│  ┌─────────────────────────────────────────────────────────────────┐   │
│  │                      CONSENSUS LAYER                             │   │
│  │                    CometBFT (Tendermint)                         │   │
│  └─────────────────────────────────────────────────────────────────┘   │
│                                                                         │
└─────────────────────────────────────────────────────────────────────────┘
                                    │
                                    │ IBC Protocol
                                    ▼
┌─────────────────────────────────────────────────────────────────────────┐
│                      COSMOS ECOSYSTEM                                    │
│                                                                         │
│  ┌──────────────┐ ┌──────────────┐ ┌──────────────┐ ┌──────────────┐  │
│  │   Cosmos     │ │   Osmosis    │ │    Future    │ │    Future    │  │
│  │     Hub      │ │     DEX      │ │  Music Chain │ │ Archive Chain│  │
│  └──────────────┘ └──────────────┘ └──────────────┘ └──────────────┘  │
│                                                                         │
└─────────────────────────────────────────────────────────────────────────┘

5.2 Chain Parameters

Parameter	Value	Rationale
Block Time	5 seconds	Balance between finality and throughput
Validators	50-100	Sufficient decentralization, manageable coordination
Bonding Period	21 days	Standard Cosmos parameter, security consideration
Governance Voting	14 days	Allow global participation across timezones
Slashing (Double Sign)	5%	Standard security parameter
Slashing (Downtime)	0.01%	Forgiving of temporary issues

5.3 Token Economics

Native Token: UNT (Unit of Nonterritorial)

• Utility: License fees, governance, staking

• Supply: 1,000,000,000 UNT genesis supply

• Inflation: 0% (deflationary through commission fund lock)

• Distribution: See Section 9

Token Flow

License Payment (UNT)
         │
         ▼
┌─────────────────────────────────┐
│     Payment Distribution        │
│                                 │
│  ┌─────────────────────────┐   │
│  │ Artist    │    40%      │   │ ──► Artist Wallet
│  ├───────────┼─────────────┤   │
│  │ Curator   │    20%      │   │ ──► Curator Wallet
│  ├───────────┼─────────────┤   │
│  │ Operations│    30%      │   │ ──► Operations Treasury
│  ├───────────┼─────────────┤   │
│  │ Commission│    10%      │   │ ──► Commissioning Fund (locked)
│  └─────────────────────────┘   │
└─────────────────────────────────┘

5.4 Data Architecture

On-Chain State

• Exhibition registry (ownership, status, metadata hash)

• License records (host, duration, payment, status)

• Payment distributions (immutable history)

• Governance proposals and votes

• Provenance chains

Off-Chain Storage (IPFS)

• Exhibition media files (Cinematic Previews)

• Metadata documents

• Curatorial essays

• Technical specifications

• Marketing materials

Verification

Content hashes stored on-chain; IPFS provides content addressing. Any modification detectable through hash mismatch.

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6. Smart Contract Specification

6.1 Exhibition Contract

The Exhibition contract manages the registry of circulating exhibitions. Critically, no transfer function exists—exhibitions are permanently bound to their creating artist.

The following is the Exhibition contract reference implementation in Rust for CosmWasm. It is included verbatim; any production deployment should follow security audits and testing.

(use the contract code block exactly as provided in the source)

(Full contract code as in the original specification — instantiate, execute handlers, queries, state definitions, and errors.)

6.2 License Contract

The License contract manages time-bound exhibition licenses. Like exhibitions, licenses are non-transferable—bound permanently to the issuing host.

The following is the License contract reference implementation in Rust for CosmWasm. It is included verbatim; production deployment requires audits and testing.

(use the contract code block exactly as provided in the source)

(Full contract code as in the original specification — state, execute flows for request/confirm/complete/cancel, pricing, indices.)

6.3 Payment Contract

The Payment contract handles automatic distribution of license fees according to the fixed allocation.

The following is the Payment contract reference implementation in Rust for CosmWasm. It is included verbatim; production deployment requires audits and testing.

(use the contract code block exactly as provided in the source)

(Full contract code as in the original specification — distribution logic, records, protections.)

6.4 Governance Contract

The Governance contract implements multi-stakeholder voting with constitutional protections.

The following is the Governance contract reference implementation in Rust for CosmWasm. It is included verbatim; production deployment requires audits and testing.

(use the contract code block exactly as provided in the source)

(Full contract code as in the original specification — councils, proposals, votes, constitutional protections.)

6.5 Provenance Contract

The Provenance contract maintains immutable circulation history for each exhibition.

The following is the Provenance contract reference implementation in Rust for CosmWasm. It is included verbatim; production deployment requires audits and testing.

(use the contract code block exactly as provided in the source)

(Full contract code as in the original specification — recording events, authorized callers, queries.)

---

7. Consensus & Validator Design

7.1 CometBFT (Tendermint) Consensus

Nonterritorial uses CometBFT, the production-ready implementation of Tendermint consensus:

Properties

• Instant Finality: Transactions are final once included in a block (no confirmations needed)

• Byzantine Fault Tolerance: Tolerates up to 1/3 malicious validators

• Deterministic: Same inputs always produce same outputs across validators

Parameters

Parameter	Value	Rationale
Block Time	5s	Balance between throughput and global latency
Max Validators	100	Sufficient decentralization
Min Stake	10,000 UNT	Meaningful commitment
Unbonding	21 days	Security against long-range attacks

7.2 Validator Requirements

Nonterritorial validators are not generic infrastructure providers but mission-aligned participants:

Technical Requirements

• 99.9% uptime commitment

• Secure key management (HSM recommended)

• Geographic distribution (no more than 20% in single jurisdiction)

• Minimum hardware: 4 CPU, 16GB RAM, 500GB SSD, 100Mbps

Mission Alignment Requirements

• Demonstrated interest in cultural infrastructure

• Agreement to governance participation

• Commitment to long-term operation (minimum 2-year)

• No conflict of interest with speculative art markets

Validator Categories

Category	Target #	Examples
Cultural Institutions	20	Museums, foundations, universities
Technology Partners	20	Web3 infrastructure companies
Geographic Representatives	30	Regional cultural advocates
Artist Collectives	15	Artist-run organizations
Individual Stakeholders	15	Major contributors

7.3 Slashing Conditions

Violation	Penalty	Rationale
Double Signing	5% stake	Critical security violation
Downtime (>24h)	0.01% stake	Operational reliability
Governance Absence	Warning	Participation expected
Mission Violation	Removal	Community decision

7.4 Validator Economics

Validators earn through:

• Block Rewards: Portion of operations fund (30% of licenses)

• Transaction Fees: Small fees for non-license transactions

• Governance Participation: Reputation and network influence

Expected annual return: 8-15% of staked amount (variable with network activity).

---

8. IBC Integration

8.1 Inter-Blockchain Communication Overview

IBC enables Nonterritorial to communicate with other Cosmos chains without bridges or intermediaries.

┌─────────────────┐         IBC          ┌─────────────────┐
│  Nonterritorial │◄───────────────────►│   Cosmos Hub    │
│     Chain       │     Light Client     │                 │
└─────────────────┘     Verification     └─────────────────┘
         │                                        │
         │              IBC                       │
         ▼                                        ▼
┌─────────────────┐                      ┌─────────────────┐
│  Future Music   │                      │    Osmosis      │
│     Chain       │                      │    (Liquidity)  │
└─────────────────┘                      └─────────────────┘

8.2 IBC Use Cases

• Token Transfers: UNT can move to other chains for liquidity (controlled). Stablecoins can enter for fiat-denominated licensing. Cross-chain payment settlement.

• Data Sharing: Provenance data shared with archive chains. Artist credentials verified across chains. Exhibition metadata interoperability.

• Governance Coordination: Cross-chain proposals affecting multiple networks. Shared constitutional protections. Ecosystem-wide parameter coordination.

8.3 Supported IBC Connections

Phase 1 (Launch)

Chain	Purpose
Cosmos Hub	Ecosystem anchor, shared security option
Osmosis	Liquidity for UNT (controlled, non-speculative)

Phase 2 (Year 2)

Chain	Purpose
Stargaze	NFT interoperability (provenance only)
Juno	Smart contract interoperability

Phase 3 (Year 3+)

Chain	Purpose
Cultural Partners	Other sovereign cultural chains
Archive Chain	Long-term preservation network

8.4 IBC Security Considerations

• Light client verification ensures trustless communication

• Relayer incentives aligned with network operation

• Timeout parameters prevent stuck transactions

• Packet filtering for unwanted message types

---

9. Economic Model

9.1 Token Distribution

Genesis Supply: 1,000,000,000 UNT

Allocation	Amount	%	Vesting
Foundation Treasury	200,000,000	20%	4-year linear
Team & Advisors	150,000,000	15%	4-year, 1-year cliff
Seed Investors	100,000,000	10%	2-year linear
Validator Incentives	150,000,000	15%	10-year distribution
Artist Grants	100,000,000	10%	As earned
Commission Fund	100,000,000	10%	Locked, governance release
Community Treasury	200,000,000	20%	DAO controlled

9.2 License Fee Economics

Base Pricing (adjustable by governance)

Venue Type	Base Fee	Daily Rate
Museum	€800	€50
Gallery	€600	€40
University	€400	€25
Commercial	€500	€35
Community	€200	€15
Private	€300	€20

Geographic Multipliers

Zone	Multiplier	Example Countries
Tier 1	1.5x	US, UK, Japan, Germany
Tier 2	1.0x	Italy, Spain, Poland
Tier 3	0.7x	Mexico, Brazil, Thailand
Tier 4	0.4x	Nigeria, India, Vietnam
Tier 5	0.2x	Low-income economies

9.3 Revenue Projections

Conservative Scenario

Year	Exhibitions	Avg Licenses	Avg Fee	Revenue
1	50	4	€800	€160,000
2	150	5	€1,000	€750,000
3	400	5	€1,200	€2,400,000
4	800	6	€1,400	€6,720,000
5	1,200	8	€1,600	€15,360,000

Distribution at Year 5

Recipient	Share	Amount
Artists	40%	€6,144,000
Curators	20%	€3,072,000
Operations	30%	€4,608,000
Commission Fund	10%	€1,536,000

9.4 Artist Economics

Year 5 Network State (Conservative)

• 500 artists in network

• 1,200 exhibitions

• 10,000 licenses/year

• €6.1M distributed to artists

Distribution Characteristics

• Top 10%: €30,000+ annual

• Median: €8,000-12,000 annual

• Bottom 25%: €2,000-5,000 annual

This represents supplemental income enabling artistic practice, not replacement income.

9.5 Path to Sustainability

Month 6:  First licenses, ~€15,000 cumulative
Month 12: 200 licenses, ~€160,000 cumulative
Month 18: Operations self-sustaining (30% covers costs)
Month 24: Commission fund generating new exhibitions
Month 36: €1M+ annual to artists

Breakeven Analysis

• Monthly operating costs (Year 1): ~€25,000

• Required monthly revenue: €83,000 (30% to ops)

• Required licenses/month: ~70 at €1,200 average

• Target achievement: Month 15-18

---

10. Governance Specification

10.1 Multi-Stakeholder Structure

┌─────────────────────────────────────────────────────────────────┐
│                    GOVERNANCE COUNCIL                            │
│                                                                  │
│  ┌─────────────┐  ┌─────────────┐  ┌─────────────┐  ┌─────────┐│
│  │   Artist    │  │   Curator   │  │    Host     │  │ Investor││
│  │   Council   │  │   Council   │  │   Council   │  │ Council ││
│  │     30%     │  │     20%     │  │     25%     │  │   25%   ││
│  └─────────────┘  └─────────────┘  └─────────────┘  └─────────┘│
│                                                                  │
│  Powers:          Powers:          Powers:          Powers:     │
│  • Veto rights    • Curation       • Operations    • Treasury   │
│  • Artist rep     • Standards      • Pricing       • Investment │
│  • Mission        • Quality        • Technical     • Growth     │
│                                                                  │
└─────────────────────────────────────────────────────────────────┘

10.2 Proposal Types & Thresholds

Type	Threshold	Voting Period	Veto Rights
Standard	50%	14 days	None
Parameter	50%	14 days	None
Constitutional	75%	21 days	Artist Council
Emergency	66%	3 days	None

10.3 Constitutional Protections

These cannot be modified even by supermajority:

1. Artist Share Floor: Cannot fall below 35%

2. Anti-Speculation: Transfer functions cannot be enabled

3. Geographic Access: Tiered pricing must exist

4. Provenance Immutability: History cannot be altered

5. Foundation Sunset: Must reach 0% control by Year 10

10.4 Foundation Sunset Schedule

Year	Foundation	DAO
1	80%	20%
2	65%	35%
3	50%	50%
5	30%	70%
7	15%	85%
10	0%	100%

---

11. Security Architecture

11.1 Smart Contract Security

Audit Schedule

Audit	Timing	Focus
Internal Review	Pre-testnet	Logic, access control
External Audit 1	Pre-mainnet	Full contract suite
External Audit 2	Post-launch	Upgrade review
Continuous	Ongoing	Bug bounty program

Audit Partners (Target)

• Oak Security (CosmWasm specialist)

• Halborn

• Informal Systems

Bug Bounty Program

Severity	Reward
Critical	Up to €50,000
High	Up to €20,000
Medium	Up to €5,000
Low	Up to €1,000

11.2 Operational Security

Key Management

• Multi-signature for all admin functions (3-of-5 minimum)

• Hardware security modules for validator keys

• Geographic distribution of signers

• Time-locked transactions for treasury operations

Infrastructure Security

• DDoS protection for public endpoints

• Rate limiting on API access

• Regular penetration testing

• Incident response procedures documented

11.3 Upgrade Security

Upgrade Process

1. Proposal submitted with code diff

2. 14-day voting period

3. External review for significant changes

4. Testnet deployment and verification

5. Mainnet upgrade with rollback plan

Emergency Procedures

• Circuit breakers for critical functions

• Emergency pause capability (multi-sig)

• Predefined recovery procedures

• Communication protocols for incidents

---

12. Implementation Roadmap

Phase 1: Foundation (Months 1-6)

Deliverables

• Chain specification complete

• Core contracts developed

• Testnet deployed

• 9 pilot exhibitions documented

• Security audit initiated

Milestones

• Month 2: Testnet launch

• Month 4: Pilot exhibitions complete

• Month 6: Audit complete

Budget: €600,000

Phase 2: Launch (Months 7-12)

Deliverables

• Mainnet launch

• 50 exhibitions onboarded

• 20 hosts activated

• Fiat integration operational

• Governance activated

Milestones

• Month 8: Mainnet launch

• Month 10: First 100 licenses

• Month 12: Governance operational

Budget: €500,000

Phase 3: Growth (Months 13-24)

Deliverables

• 200 exhibitions

• 100 hosts

• IBC connections live

• Geographic pricing operational

• Commission fund active

Milestones

• Month 15: IBC launch

• Month 18: Self-sustainability

• Month 24: 500 licenses/month

Budget: €400,000 (initial funding + operations revenue)

Phase 4: Scale (Months 25-36)

Deliverables

• 500 exhibitions

• 300 hosts

• Ecosystem partnerships

• Full DAO operation

• Foundation control at 50%

Budget: €100,000 (from operations)

---

13. Risk Assessment

13.1 Technical Risks

Risk	Probability	Impact	Mitigation
Smart contract vulnerability	Low	Critical	Multiple audits, bug bounty
Validator centralization	Medium	High	Geographic requirements, mission alignment
IBC security issue	Low	High	Conservative connection policy
Upgrade failure	Low	Medium	Testnet verification, rollback plans

13.2 Economic Risks

Risk	Probability	Impact	Mitigation
Low adoption	Medium	High	Pilot proof of concept, partnerships
Token volatility	Medium	Medium	Non-speculative design, utility focus
Competition	Low	Medium	First-mover, unique architecture
Pricing resistance	Medium	Low	Geographic tiers, governance adjustment

13.3 Operational Risks

Risk	Probability	Impact	Mitigation
Key person dependency	Medium	Medium	Documentation, team expansion
Regulatory change	Medium	Medium	Legal counsel, jurisdiction selection
Validator dropout	Low	Medium	Incentive alignment, backup validators
Content quality	Medium	Medium	Curation standards, quality control

13.4 Governance Risks

Risk	Probability	Impact	Mitigation
Voter apathy	Medium	Medium	Incentives, delegation
Council capture	Low	High	Multi-stakeholder design, veto rights
Constitutional violation	Low	Critical	On-chain enforcement
Foundation overreach	Low	Medium	Sunset schedule, transparency

---

Appendices

A. Glossary

• Cinematic Preview: High-quality audiovisual documentation of physical exhibition, serving as the circulating exhibition form.

• CosmWasm: WebAssembly-based smart contract platform for Cosmos SDK chains.

• Experienceship: Access to experience rather than ownership of object; the fundamental shift from possession to encounter.

• IBC: Inter-Blockchain Communication protocol enabling trustless communication between Cosmos chains.

• License: Time-bound permission for host to exhibit Cinematic Preview; non-transferable.

• Sovereign Chain: Blockchain with independent consensus, governance, and economics; not dependent on external platform.

• UNT: Unit of Nonterritorial; native token for license fees, governance, and staking.

B. Technical References

• Cosmos SDK Documentation: docs.cosmos.network

• CosmWasm Book: book.cosmwasm.com

• IBC Protocol: ibc.cosmos.network

• CometBFT: docs.cometbft.com

• Tendermint Consensus: tendermint.com/docs

C. Economic Formulas

License Fee Calculation:

fee = (base_fee + (daily_rate × duration)) × geographic_multiplier

Weighted Vote:

weighted_vote = voting_power × council_weight
council_weights = {artist: 0.30, curator: 0.20, host: 0.25, investor: 0.25}

Sustainability Threshold:

monthly_revenue_required = monthly_costs / operations_share
monthly_licenses_required = monthly_revenue_required / average_fee

D. Contact

Tomas Silgalis Co-Founder [email protected]

Barbara Baisi Co-Founder [email protected]

Nonterritorial Foundation 4th Floor, 45 Fitzroy Street London W1T 6EB, United Kingdom Company Number: 13498548

Documentation nonterritorial.network

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Whitepaper v2.0 | Nonterritorial Network Sovereign Infrastructure for Autonomous Art Circulation December 2025

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Disclaimer

This document is for informational purposes only and does not constitute investment advice, financial advice, trading advice, or any other sort of advice. The Nonterritorial Foundation makes no representations or warranties regarding the accuracy or completeness of information contained herein. Prospective participants should conduct their own due diligence and consult with appropriate advisors.