Swap Funding is a mechanism where users exchange liquidity (for example, via the Bitcoin Lightning Network) into DAMAGE tokens, which are then applied to software execution and verification. Release to contributors occurs only when predefined, machine-verifiable behaviour passes.

Swap Funding does not involve pooled capital, custody, or promises of return.

Traditional funding commits capital based on belief, narrative, or discretionary approval.

Swap Funding applies liquidity based on verification:

• No fundraising rounds
• No pooled treasury
• No lock-in
• No discretionary operator allocation
• Liquidity can stop or re-route at any time

No.

Escrow typically involves:

• Custody transfer to a third party or contract
• Lock-in until resolution
• Binary release (pay/refund)
• Adjudication (human or oracle decision)

Swap Funding has none of these properties:

• No funds are held “for later”
• No lock-in
• No binary “winner/loser” release event
• No adjudicator

Users retain control of their assets. The operator does not hold or manage user assets on their behalf.

No. Transactions are user-initiated and irreversible.

No.

Swap Funding does not involve:

• Profit expectation
• Yield, dividends, or revenue share
• Equity or debt claims
• Guaranteed appreciation
• Managed capital allocation on behalf of users

DAMAGE is used for software utility: metering and settling verification activity.

No.

Swap Funding does not include:

• Pooling of participant funds
• Operator discretion over capital deployment
• A common enterprise with profit expectation
• Promises of financial return

Users independently choose whether and where to route liquidity.

Based on the current design scope:

• No custody
• No fiat services
• No remittance/money transmission service
• Software-only utility usage

If functionality materially changes (especially custody or fiat rails), regulatory position should be reviewed.

No.

The operator does not:

• Recommend where to route liquidity
• Provide return expectations
• Provide investment advice

All routing decisions are made by users.

DAMAGE is used to:

• Meter verification execution
• Unlock software pathways
• Settle deterministic outcomes
• Coordinate testing capacity

DAMAGE is consumed for software execution, not invested for financial return.

No guarantees are made.

DAMAGE does not represent:

• A claim on profits
• A redemption right
• A buyback right
• A guaranteed external market value

Any secondary market activity is external to the operator.

That depends on third-party markets and is outside the scope of the operator. The operator does not operate secondary markets.

Yes, for software services and conversion services only.

Fees may apply to:

• Swap boundary (e.g., Lightning -> DAMAGE conversion fee/spread)
• Verification execution (metered compute and infrastructure)
• Optional tooling layers (dashboards, reporting, integrations)

No.

To avoid custody and outcome-based profit participation, operator fees are not charged as:

• Success fees
• A percentage of “released” funding
• Outcome-contingent fees linked to BDD passing

Contributors are paid in DAMAGE only when the relevant BDD specifications pass.

This is deterministic and non-adjudicated:

• If BDD passes: release occurs
• If BDD fails: nothing is released

No release occurs. There is no confiscation, penalty, or seizure mechanism within Swap Funding.

Liquidity simply continues routing elsewhere.

Contributors:

• Choose whether to participate
• See acceptance criteria in advance (BDD)
• Are paid for verified execution only

No one is obligated to continue work.

No one centrally.

Funding emerges from user-directed routing and verification outcomes, not votes, committees, or operator discretion.

Swap Funding does not require DAO governance:

• No voting
• No proposals
• No token-weighted allocation decisions

Users bear:

• Software execution risk
• User error risk (keys, addresses, compatibility)
• Market risk (if interacting with third-party markets)

The operator provides software “as is” without guaranteeing outcomes.

Because Swap Funding is non-custodial and outcome-neutral:

• No custody obligations are assumed
• No fiduciary role is created
• No investment promises are made

Swap Funding can reduce:

• Governance overhead
• Subjective acceptance disputes
• Capital misallocation due to weak execution signals

Verification replaces trust. Measurement replaces persuasion.

Yes.

Swap Funding can complement:

• Payroll
• Procurement
• Venture funding
• Fixed-bid delivery

It is suited to funding verifiable execution, not promising organizational outcomes.

No.

Once a user pays a Lightning invoice to a DamageBDD node, the Bitcoin payment is final and unconditional. The Operator is paid immediately for software conversion and infrastructure services.

There is no state in which Bitcoin funds are held, locked, or pending a future outcome.

After payment, DAMAGE is allocated to the user’s context as non-redeemable software execution capacity.

Allocated DAMAGE:

• Is not Bitcoin or fiat
• Is not refundable or redeemable
• Is not pooled with other users’ assets
• Does not represent stored monetary value
• Functions as prepaid usage credits within software systems

This allocation is analogous to prepaid cloud compute credits or API quotas, not held funds.

No.

DAMAGE is not locked or immobilized pending test outcomes.

DAMAGE may be:

• Consumed to execute verification
• Routed to different verification tasks
• Left unused by the user

There is no “waiting” or “holding” state where assets are frozen pending a decision.

If a BDD specification passes, a new transfer of DAMAGE may occur to a contributor as payment for verified execution.

This is not a release of previously held funds.

Key distinction:

• Bitcoin payment settled earlier
• DAMAGE execution capacity was consumed
• Contributor payment is a consequence of verified execution, not an escrow release

Holding or escrow would require all of the following:

• Operator custody of user assets
• Asset lock-in pending resolution
• Binary release or refund
• Adjudication by a human or oracle

Swap Funding has none of these properties:

• No custody of Bitcoin
• No lock-in of DAMAGE
• No refund or seizure mechanism
• No adjudication or discretionary release

Bitcoin payments settle immediately. DAMAGE represents prepaid, non-redeemable software execution capacity. Verification consumes DAMAGE. Contributor payment is a new transfer triggered by deterministic verification, not the release of held assets.

At no point are user funds held pending test results.

Swap Funding is a non-custodial, software-only mechanism where users apply liquidity to verification-gated execution, without pooling, lock-in, profit expectation, or discretionary asset management.

• Not an investment product
• Not escrow
• Not a managed investment scheme
• Not a custodial wallet service
• Not remittance or money transmission
• Not financial advice