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Skale Network is taking steps to ensure its cryptocurrency tokens stand up to regulatory scrutiny as it seeks to encourage wide adoption of its blockchain-based technology.

Skale Network, overseen by the N.O.D.E. Foundation, will be the first project to launch a token on the Activate platform, which has been set up by ConsenSys Codefi to allow networks to launch their tokens based on a legal framework designed to withstand regulatory scrutiny.

Initial coin offerings (ICOs) have gotten into a lot of legal trouble in the U.S., due to both regulatory murkiness and sketchy startups trying to take advantage of the blockchain frontier.

But the Skale Network platform has been designed to securely scale Ethereum-based decentralized apps, or dApps. And launching on Activate will improve both security and decentralization.

Announced in October 2019, Activate wants to set the standard for the purchase, distribution, and use of utility tokens to bootstrap early-stage network utilization. Activate’s platform is designed so that networks must launch and be usable at or immediately after selling any tokens to launch participants. Moreover, Activate ensures that participants cannot simply flip tokens for passive speculative purposes, instead requiring them to use the tokens for their intended purpose and to hang onto them for three months or more.

In the case of the Skale Network, token holders must contribute to the security and scalability of the network by delegating to or serving as validators on the network, thereby earning rewards. This means they have to lend their processing power to the task of validating transactions on the blockchain. The goal is to create a strong base of token holders who are incentivized, and in fact, programmatically required, to use their tokens for their intended purpose, which should yield a stronger mainnet launch in the second quarter of 2020.

The company describes its offering as an elastic blockchain network that gives developers the ability to easily provision highly configurable, fully decentralized chains that are instantly compatible with Ethereum. While Ethereum is slow to verify transactions, Skale claims it can execute sub-second block times and run up to 2,000 transactions per second per chain.

The Skale Network is an open source project with many contributors, including Skale Labs. More than 35 dApps are being built on Skale, ranging from games to streaming audio apps.

Skale Network supporters include Blockchange, ConsenSys Labs, Galaxy Digital, Hashed, HashKey, Floodgate, Multicoin Capital, Recruit Holdings, Signia Venture Partners, and Winklevoss Capital.

Skale was founded by Jack O’Holleran and Stan Kladko, veteran startup software executives with multiple successful exits.

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