Principles of tokenomics

This is an ongoing reflection on fundamental principles of tokenomics. 

We are document the main ideas on the OVN wiki, before we turn them into a post. 

-------------------------------------------

 

Many have called 2022 the year of the DAO. As this new form of organization becomes more popular people experiment with tokenomics, which are rules of issuance and (re)distribution of tokens that represent various things such as units of account, store of value, means of exchange, access rights, etc. 

A tokenomic model describes an economic game that is designed to incentivize and structure some type of collaborative activity and the maintenance and development of the infrastructure that allows that economic activity to take place. In this post we are going to elaborate on the fundamental principles that should constitute the basis of any tokenomics.

 

Principles

1. Do not create artificial scarcity 
2. Tax the fruit of activities, not the process itself 
3. others to come...
   

 

Rationale

 This is where the rationale for every principle will be given.

 

See also

Current-see 

 

By AllOfUs

Multitude Manifesto - Part 1

Things are changing fast. We are rewriting the Multitude Manifesto. You are invited to contribute. Start by commenting below. - last modified on Mar. 30 2011

  

---------------------------------------------

Dear humans, 

We are at a crossroads.

Our society is evolving and if everything else maintains its course, we'll take a turn towards more freedom or we slide into tyranny. The chances seem to be stacked in our favor, the multitude, but we still need to do our best to escape tyranny. History is part destiny, part luck and in part man made.

Civilizations go in cycles. When development is not interrupted by exogenous causes, setting aside the possibility of a cataclysmic event, civilizations take shape, consolidate their structures and grow, get corrupted from within and collapse. We are at the latest stage.

We are witnessing the greatest socioeconomic transition in human history, set in motion by a new potential. On the one hand, this potential is actualized by us, the multitude, to build a p2p society. On the other hand, those in positions of power use this new potential to build a dystopian technocratic society. The left-right dichotomy of the past has been flipped sideways into a top-down antagonism, understood as a struggle between those who seek freedom through decentralization and those who seek domination through centralized control.
 
Every time a new technology is introduced, a new potential is created.  The invention of the telegraph allowed instantaneous long-distance communication, which changed the way governments and companies operated. Since digital technology connects individuals across time and space, it gives rise to a new form of organization, the open network.

The Internet acts as a medium where various types of catalysts (purpose, motivation, incentives) can sum forces from an arbitrarily large pool of independent actors, which can form massive ad hoc collaborative networks (collective intelligence), being able to rapidly channel tremendous amounts of resources (crowdsource), and to carry out very complex actions (swarm). Linux, the open source operating system, Wikipedia, the people's encyclopedia, and Bitcoin, the bankless cash, are just a few examples.
Sometimes, this coherence emerges and exerts a negative impact on society. Both constructive or destructive human swarms are now possible, being hard to contain by the centralized power structure that is currently in place, rapidly becoming obsolete.  

The possibility of stable, sustainable global-scale open networks is no more questionable, they exist in almost all spheres of human activity. If we listen carefully to Ronald Coase, we can also understand why they are possible. In essence, the Internet reduces transaction costs among individuals. We join other people into an arrangement, we join organizations, if we have more to gain than operating independently.

The type of arrangement depends on the type or the area of activity. Thus we can form private and public institutions, co-ops and non profit organizations. We live in cities, build nation states and form international alliances. Today we can also organize as global, transnational open networks. There is a blueprint for every type of organization, which prescribes a set of relations or roles, policies, methods and procedures, as well as capturing and redistribution mechanisms for valuables. People decide to restrict their individual autonomy by entering in relation with others according to an organizational blueprint, that is to join an organization, to increase their collective capacity beyond the sum of their individual capacities and, in doing so, to benefit from their collective output. If they don't gain in capacity and benefits, they will likely operate alone until a new form of organization that provides greater advantages emerges, if possible.

The Internet with the recent p2p technologies (blockchain and others) that the open culture has built on top of it make open networks a new possible arrangement, where the cost-s benefits ratio for a new type of global scale collaboration is favorable. Open networks do exist and some of them are highly innovative and very efficient in production and distribution, or dissemination, of their outputs. How can we understand this fact?

The open source movement has democratized 3D printing and drones and has created blockchain, which are some of the most disruptive technologies in the past two decades. Also, despite the negative press on Bitcoin and its energy consumption, it only represents a small fraction of the energy consumption of the banking system. It is also the most secure exchange network that humanity has ever built.

Yochay Benkler identifies two reasons for understanding why open networks can outcompete traditional organizations. The first one is related to what economists call information opportunity cost. In essence, it says that open networks perform better in complex situations where a lot of information needs to be processed in order to seize opportunities and produce good responses to events. The second reason refers to what economists call the resource allocation problem. Open networks do better in matching skills to tasks and allocating resources to the right activity.
 

In ancient times, the tribe's socioeconomic structure was effective when the in-group was less than ~150 people, and one could remember reputation, debts and favors for each member of the tribe. Since then, religions, nation-states, and corporations have all taken our ability to collaborate on synergistic goals to new levels of achievement. Today, Michel Bauwens speaks about peak hierarchy: horizontality is starting to trump verticality, it is becoming more competitive to be distributed, than to be (de)centralized. If we go back to Ronald Coase, hierarchies have higher costs due to excessive overhead for bureaucracy (an army of paper pushing middle men), a lack of transparency, coherence, speed & efficiency. Open networks seem to be poised for domination.

All these transformations are not the desire of a group of individuals. There is no ideology underlying this movement. It just happens because the conditions are right, because a new potential exists and people all over the world respond to it, intuitively understanding the benefits that it offers. But disruptive changes are usually met with resistance. Sooner or later those who benefit from the status quo come to understand the threat that the change poses to their situation and they start to oppose it. A conflict takes shape between them and those who already benefit from the new potential. The church opposed the enlightenment by denigrating the scientific method and by banning the printing press, trying to stop the spread of new ideas. Monarchs opposed the shift to a free market economy and to parliamentary democracy, fueled by the industrial revolution. Today, states go after cryptocurrency, which symbolizes the movement of decentralization. In all these cases a technology was at the heart of the movement: the printing press for spreading non-dogmatic ideas, the steam engine for spreading new modes of production, the Internet for facilitating new ways of organizing. It is easier to crash an organized movement based on ideas. History shows that it is almost impossible to stop a diffused transformation based on a new potential.

Fundamentally speaking the new potential comes from disruptions in three key areas:
Communication: The Internet makes possible many-to-many communication at global scale, in a p2p way (i.e. non-intermediated).
Coordination: The Internet makes possible stigmergic coordination, allowing huge numbers of individuals to swarm into action like never before.
Collaboration: The Internet allows many minds to think together, many arms to swing together. In other words, it gives rise to social intelligence, makes possible massive crowdsourcing and facilitates the deployment of complex activities based on stigmergy.

In sum, we are witnessing the emergence of a peer-to-peer society, which has its own load of good and bad. On the good side of things, it strikes a balance between the individual and communities. It transfers power to the individual, allowing open access to participation in all socioeconomic processes, within the boundaries of community, or network, self-imposed rules. 

At the economic level, individuals in a p2p society have the ability to coordinate their efforts, transact among themselves, co-create and distribute their creations, while bypassing hierarchical intermediary institutions, thus escaping the established power structure, which is designed to perpetuate economic dependence. We are witnessing the emergence of a new mode of production, commons-based peer production, the formation of a p2p economy, operating outside of the market and beyond the reach of nation states.

The powerful urge to escape bondage is putting pressure on the multitude to adopt a new culture, one that is compatible with the new modes of production and dissemination of essential goods and services, the open culture. This new culture is built on a new set of values such as sharing, openness and transparency. Sharing means new forms of property, commons and nondominium that are applied to open source technologies and blockchain networks. Openness means access to processes, permissionless. Transparency means unhindered access to information about pretty much everything related to the process.

An embryonic new world is already taking shape within the old world. The metamorphosis process has already begun its irreversible course. There is clear evidence that material resources are starting to flow from the old system into the new, including a massive transfer of talents and skills. For those who perfected the old system and have everything to lose, all their levers of power are simply melting in their hands. Their media is now called fake news, their financial system is called a scam, their politics is called a shared, their economy is synonymous with slavery and environmental degradation. The embryonic p2p society operates on entirely different principles and cannot be controlled from within the old system. It is transnational, i.e. beyond the power of the state and of any international institution -try to kill the Bitcoin network.

We are experiencing the largest social transition since the Industrial Revolution. But make no mistake, this is not the Great Reset you've heard about, quite the opposite.

 

-------------------------------

Other parts to come:

• History of the multitude movement
• About power
• System under siege, different angles of attack
• System is fighting back, dead angles

 

 ---------------------------------------------

Donate to this effort 

 

in ETH

 

0x8C69ff6BfF924f98b9fb31566D36E4d9762D070e

 0x8C69ff6BfF924f98b9fb31566D36E4d9762D070e0x8C69ff6BfF924f98b9fb31566D36E4d9762D070e0x8C69ff6BfF924f98b9fb31566D36E4d9762D070e0x8C69ff6BfF924f98b9fb31566D36E4d9762D070e0x8C69ff6BfF924f98b9fb31566D36E4d9762D070e0x8C69ff6BfF924f98b9fb31566D36E4d9762D070e0x8C69ff6BfF924f98b9fb31566D36E4d9762D070e

 

 

in XMR (Monero)

 

4AaWgFc591FBc1aueSHBaU1UtmXCNoXtQ66LMQJmfQnYbtat1GYRQyLQo2RpCvkV9jBSfK4oTed5h9jsKVsHbJXPT19rSsY

 

 

---------------------------------------------

By AllOfUs

What is p2p music?

The open culture rewires our society. p2p practices have been applied to all spheres of human activity, but our relation to music is still a one-way affair: a musician writes a song and you consume it passively.

By design, p2p processes allow many-to-many interactions. They brake the asymmetry between producers and consumers that we find in capitalism and socialism. In other words, anyone can engage in co-creation and the fruits of collaboration are not distributed as products but rather disseminated as commons. 

So what is p2p music? It must be open (not canned as a finished product) and participatory (allowing anyone to add to a musical experience).

If p2p music is not created to be distributed as a product, how can it  sustain those who engage in its creation and dissemination?

The video below explores these questions and more... Feel free to engage in this reflection by commenting below or directly on the video, on YouTube.

 

By AllOfUs

Networks of networks

This is just a first draft... I copied this text from an email and will add to it later. Last modified on Mar 02, 2022

 

---------------

 

Living systems theory is at the core of p2p. 

Life requires flow. Organized flows require support and structure.

 

All the p2p talk is about new forms of living systems, open networks. That's the new thing and the novelty makes this field interesting, because we need to understand the potential of these new creatures. Are they going to coexist with hierarchical forms of organizations and be dominated by hierarchies or are they going to dominate hierarchies? Is Bitcoin (or an OVN similar to it) going to replace banks in the future, which rule the world of exchange?  Are Youtubers going to crash mainstream institutional media?

Open value networks have always existed, but we have never considered them seriously for organizing society. What makes them interesting now? Their potential is much greater today, because the Internet acts as a medium that allows open networks to grow and spread to global proportions.

Coase made us understand why large scale networks can exist. Benkler showed us why they can out-compete hierarchies. But open networks are nothing like an open community, which can be seen as a unit. Open networks are fractal. They are made of smaller open networks and can themselves easily coalesce into larger open networks. In other words, open networks "try to discover" new ways to connect among themselves. It's in their nature.

This trend is clearly happening in the blockchain space, with new blockchains sitting on top of other blockchains (L2) or connecting/linking other blockchains together. Blockchains are open networks (the permissionless ones, not the fake ones).

I think that we should not need intermediaries to be able to connect open networks together.

Paula: Connecting networks (provided they are on the same platform?)

Open networks should not need to be represented on another platform to be able to connect. They should just plug into each other without the need of an intermediary platform. In other words, all open networks need to build their own "attachment sites" and share some type of protocol. This is how biology works, molecules and proteins interacting together based on their internal structure, their affinities, and based on some "rules" described by biochemistry. This type of permissionless linkage doesn't lead to chaos or disorder, if the affinities are well specified and the rules are clear. The fact that I am here typing on this keyboard is good proof that it works well enough. But unfortunately today we are still trapped in the platform paradigm. For example, https://automate.io and  https://ifttt.com are interconnectivity services built with the wrong (platform) approach. They offer the connection as a service and act as a middlemen. Today there is a need for that, because every service has been designed as a stand alone, with little consideration for interoperability (other than providing an API to grow an ecosystem in which they are at the center), which is a platform mentality, wrong. All these connectivity services will be put out of business once the design paradigm shifts to consider interconnectivity as a design priority, which is the next logical step. A lot of web development effort today goes into integration. We see that with Discord, things like Bots or Webhooks, which do not necessarily depend on a third party but act as a direct pipe between Discord and Github for example.

These linkages among open networks allow new flows, of various types. 

 

New web3 crowdfunding platforms like Gitcoin play an important role today, they are a source of funding, which

1. increases the metabolism of every network
2. stimulates networks to build connections among themselves, if this flow feeds different networks at the same time

In neuroscience they say that neurons that fire together network together. Networks seem to connect if they are rewarded together based on their concomitant interaction with the environment. Luckily, Gitcoin has built a nice feature that allows grants (proposals) to be bundled together as collections, so that they can present synergy and be discovered by donors at once. This is a grant that sensoricans created, which can be put into a collection with other grants, perhaps TaoDao and use a portion of the funds to build internal structures for each of these networks that allows them to interconnect. Shared funding as a stimulus to grow new connections between open networks. 

 

By Tibi

How material resources are handled in peer production

A presentation of the use of a network resource planning and contribution accounting system (NRP-CAS) in material peer production.

 

 

 

By AllOfUs