dub_sauces said:the 2 theories i think are relevant to your question is that hydrogen peroxide A) drastically helps to control molds and mildews that might pop up on your seeds/paper towels and B) provides extra oxygen to the roots when they pop... plant leaves may need co2, but plant roots want oxygen...
It's probably why I failed to start some jalapeño seeds to make up for my ghost peppers which didn't germinate and my jamaican hot chocolate that didn't germinate. The paper towel looked colorful.