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John Wiegley

# Proposal to Commence the Swiss Subnet with 13 Nodes in Switzerland and Liechtenstein

### Submitter: [Swiss Subnet AG](https://subnet.ch) 
### Date: April 30, 2025 

## Summary:

Following the approval of [Proposal No. 128820](https://dashboard.internetcomputer.org/proposal/128820) (SRC Motion Proposal), we’re now seeking the Internet Computer community’s support to launch a new subnet: the Swiss Subnet. This subnet will consist of 13 nodes, all hosted exclusively in Switzerland and Liechtenstein. It’s designed to give users stronger regional control over data storage and transactions, while taking advantage of the globally recognized legal frameworks of Switzerland and the regulatory clarity offered by the Liechtenstein Blockchain Act. By positioning the Swiss Subnet this way, we aim to attract Swiss and European enterprises, government institutions, and developers building decentralized applications (DApps).

## Rationale:

1. Geographic Localization & Sovereignty:
    By hosting all nodes in Switzerland and Liechtenstein, we ensure that the data hosted on this subnet is stored and processed exclusively in these two countries. This ensures that transactions are subject only to Swiss and/or European law. It gives enterprises and organizations a clear path to compliance with Switzerland’s and Liechtenstein’s globally respected, business-friendly legal frameworks—especially around key areas like data protection (FADP & GDPR), financial markets regulation, and consumer protection. Additionally, thanks to Liechtenstein’s adoption of the Token and Trustworthy Technology Act (commonly known as the Blockchain Act), the Swiss Subnet will offer developers new opportunities to tokenize real-world assets. It will also make it easier for projects to gain regulatory access to European markets under the MiCA (Markets in Crypto-Assets) framework.

2. Decentralization Properties:
   Although all nodes will be located only in two countries, the existing data center decentralization rules of the ICP network ensure the maximum possible decentralization within these boundaries.

3. Swiss Data Privacy and Security Compliance:
   The Swiss Subnet aims to attract companies that value legally binding, digitally executed contracts with strong enforceability, including automated dispute resolution systems and arbitration. Leveraging Liechtenstein’s Blockchain Act, it enables the tokenization of real-world assets, offering a neutral yet efficient jurisdiction for businesses.

4. Support for Swiss and Liechtenstein Blockchain Ecosystems:
   Switzerland,—particularly Zug’s Crypto Valley—has established itself as a global hub for blockchain and crypto innovation. The Swiss Subnet will provide the infrastructure that can support blockchain startups, decentralized applications (DApps), and enterprise-grade solutions within Switzerland, enabling local initiatives to grow on a trusted and compliant platform.
Liechtenstein, the first country to enact a Blockchain Act back in January 2020, continues to be a strong advocate for blockchain projects, offering a highly supportive regulatory environment.

## Subnet Configuration:

- Number of Nodes: 13
- Location: The nodes will be distributed across various Swiss cantons and Liechtenstein to ensure geographic diversity and prevent high concentration in any single location.
- Node Operators: Only Switzerland/Liechtenstein-based node providers may participate in the formation of the new subnet to ensure adherence to proper regulations and operational standards.
- Procedure of approval of Node Operators: all proposed Node Operators will be onboarded per the normal NNS admission procedure.

## Benefits to the Internet Computer:

- Attraction of New Participants: Enterprises and organizations requiring compliance with Swiss/EU regulations or seeking a highly secure and trusted infrastructure will be more inclined to adopt the Internet Computer.
- Promoting adoption: The Swiss Subnet is designed to drive the development of new dApps on its infrastructure, helping to increase adoption of the Internet Computer protocol. It aims to expand the ecosystem’s user base and unlock new opportunities for use cases in regulated and enterprise-grade environments.
- Enhancing protocol utility: Acting as a “Tenant” per SRC rules, the Swiss Subnet will contribute to cycle burning by renting computational capacity at full consumption rates (estimated burning of 820 XDR/day).
  
## Implementation Plan:

1. Node Deployment: Following the [NNS approval](https://dashboard.internetcomputer.org/proposal/133841), the new target topology of the ICP network encourages independent Swiss node providers to allocate resources and contribute to the formation of the Swiss Subnet. Node onboarding will follow the standard NNS proposal process.
2. Existing Node Operators: Several Swiss nodes that were previously onboarded to the IC but not yet assigned to subnets can also be used to form the Swiss Subnet, provided decentralization constraints (such as one node per data center) are maintained.
3. Community Involvement: Swiss Subnet AG will actively engage the Internet Computer community to provide feedback, updates, and input into the operations of the Swiss Subnet.

The economics of this plan take into account the subnet rental cost (approx. XDR 25k per month) plus sales, general and administrative expenses, which over time will be covered by revenue generated from clients using the Subnet services.

## Conclusion:

The Swiss Subnet will enhance the security and privacy compliance of the Internet Computer by offering a geographically localized option for users needing to adhere to Swiss and/or Liechtenstein law, while supporting unique digital use cases. We look forward to receiving the NNS community’s approval to further strengthen the network and expand its global reach.

## Proposal Verification: 

### Parameters
* Subnet rental canister principal: `qvhpv-4qaaa-aaaaa-aaagq-cai`
* Principal requesting to rent this subnet: `yebeg-uqaaa-aaaar-qbk7a-cai`
* Rental Condition ID: `App13CH`

### Verification Steps
1. Check payment account for principal `yebeg-uqaaa-aaaar-qbk7a-cai`:
```bash
dfx ledger account-id --of-canister qvhpv-4qaaa-aaaaa-aaagq-cai --subaccount-from-principal yebeg-uqaaa-aaaar-qbk7a-cai
# bc26c9430c9c97dd38f59729e0ec42f212e21c7f3b7e0b1d58a9de52960386c6
```
See [here](https://github.com/dfinity/subnet-rental-canister/blob/0.1.0/src/subnet_rental_canister/src/canister.rs#L196) that the Subnet Rental Canister does the same.

Required funds at proposal creation time: 
```bash
dfx canister call qvhpv-4qaaa-aaaaa-aaagq-cai get_todays_price --ic '(variant { App13CH })'
# (variant { Ok = record { e8s = 4_107_550_372_445 : nat64 } })
```
Note that this price can change daily.
What matters is the price returned by this call at *proposal creation time*.

Check funds in the payment account being greater than or equal to 4_107_550_372_445 e8s (from above):
```bash
dfx ledger balance bc26c9430c9c97dd38f59729e0ec42f212e21c7f3b7e0b1d58a9de52960386c6 --ic
# 41148.13822547 ICP
```

The sufficient balance will ultimately be checked by the protocol on proposal execution.


Subnet rental request with condition App13CH