DAOrayaki Reserach |Economic Space Agency ：Protocols For Post-Capitalist Economic Expression

DAOrayaki

9 min readAug 18, 2021

DAOrayaki DAO Research Grant:

Fund Address: 0xCd7da526f5C943126fa9E6f63b7774fA89E88d71

Voting Result：DAO Committee Yes

Grant Amount：200u

Category: Decentralized，cryptocurrency ，dApps ,DeFi, Oracles，Crowdequity、Blockchain、Future Value

Contributor：Julie，DAOctor @Daorayaki

Chinese Version:https://daorayaki.org/economic-space-agency-protocols-for-post-capitalist-economic-expression/

1、Project Summary

They believe that to democratise the economy and realise the potential of the internet, need an economy with internet architecture.

They are designing an economic protocol for peer to peer economic and governance practices. This protocol will be free to use, with everyone having the same capacities to create, join and share without centralized management. The objective is to create a networked economy that draws on the potential for abundance and universal expression that lies at the heart of the Internet, to create social, not just private, value.

This is in contrast with the current economy, and its development of the internet, dominated by hierarchical states and corporate power, designed for the imposition of scarcity as the condition of profitability. It has seen internet development and usage, with its potential for free distribution, instead directed to activities that can extract (directly or indirectly) revenue from users. They believe in the potential for an internet economy that can be more resilient, more coordinated, more caring, more affective, more planetary and more information-native. This is an internet economic system. They call it the economic space protocol.

2、Team members

l Akseli Virtanen — — Co-Founder

Akseli is a radical political economist and finance theorist, based in Berlin and Helsinki, after 5 last years in California (visiting researcher at UCSC and Stanford University, reengineering financial instruments to reflect the capabilities of new software). PhD 2006, Helsinki School of Economics (Aalto University).

l Jorge Lopez — — Chief Architect

15 years web application development (Javascript frontend and backend, PHP).

Solid Javascript full stack web development expertise(Node.js,Express/Connect, MongoDB, Angular, MEAN STACK), for Real Time Web Apps.

l Pekko Koskinen — — Organizational Architect

He design reality into modified, playful structures, experimenting with various forms of everyday life. Sometimes these designs get attributed as art. doodles of reality have resulted in fictional religions, social forms, conceptual tools, hypo-entities and self-designs.

Most of his experiments have taken place within life at large, outside credited recognition. Within the field of conventionalized arts, some of his resulting systems have ended up in institutions, such as Athens and Mercosul Biennials, Volksbühne, NY MoMA. This offers him modest artistic credit, which, in terms of influence, is mostly play money.

3、Governance and Incentive mechanisms

1. Economic Space Protocol

The Economic Space Protocol is an economic language and programmable economic environment for a modular and self contained economic system. It delivers a p2p protocol for a scalable economic network by implementing exchanges and market making; payments and settlement; liquidity creation and maintenance; means of investment and risk management; and economic governance.

The protocol is designed to be:

l Open:

Anyone can create, join, and share economic spaces.

l Scalable:

The economic network doesn’t rely on global replicated mutable state, favoring distributed state: State transitions are local among peers.

l Partition Tolerant:

Each peer is able to connect and interact with each other directly, not requiring a global virtual central agent, i.e. a replicated global vm.

l Programmable:

With a simple API, anyone can extend the protocol to create new financial instruments (tokens), economic spaces (markets) and economic agents (value production organizations) and interfaces for new and existing applications, transforming them into “Economic Apps”.

2. TOKENS

Participating economic agents interact via the following relations, each with its distinctive token.

1. The commodity token:

The commodity token is issued by an economic agent. The token represents a right to the specific output (the ‘underlier’ it describes). But it also generates a set of information associated with the exchange that forms the basis of data-rich economic performances.

The liquidity token:

The liquidity token is an extension of credit denominated in the unit of account. This token must be redeemed on demand for any token on offer by an economic agent.

The stake token:

The stake token can be issued by an agent in return for a stake in their activity. It gives the holder the right to participate in the surplus generated by the issuing agent’s economic activity.

1）Tokens function

l Commodity tokens have the following attributes:

1. Their quantity is determined by the offers/acceptances of individual agents and therefore is determined by, and a measure of, the real output of an economic agent.

2. They are priced through market offers, where the bid is the commodity token, and the ask is denominated in the unit of account.

1. The risks of commodity production are carried by the direct producer (will the offered output be produced and get to market; will there be an acceptance for an offer). Default risk is carried by the token holder.

l Liquidity tokens have the following attributes:

1. They are denominated in the unit of account, for credit clearing may only occur across entities of the same kind and denomination. In effect, liquidity tokens bring the unit of account to life as more than a passive numeraire mediating the valuation of other tokens: it becomes itself a unit of distributed issuance of credit.

2. They come into being through a collateralized credit agreement. This means credit effectively appears as automated.

3. They are cleared when they serve an exchange. This is through netting by the distributed offer matching algorithm.

4. They give a right to be redeemed on demand for any output on offer by the issuing economic agent.

5. There is no incentive to hold them longer than necessary to settle a trade.

6. They bear no interest or yield and were not designed so as to be an effective store of value, especially as they are subject to the risk of default of the issuer.

l Stake tokens have the following attributes:

1. Their value is measured in the unit of account, and is reflected in the matched exchange offers. In other words, the market determines its value and it fluctuates accordingly.

2. They are a measurement of the aggregate performance of an economic agent.

3. They are issued and accepted by agents in return for the stake of others.

4. Their price will reflect the valuation of the asset being staked, and will change broadly in relation to that valuation

5. They reveal the preferences of agents backed by financial commitment

6. They create performance data about the state of the economy

7. They can be used to issue fully collateralized liquidity tokens.

2）Exchanges between tokens

3）Unit of account

The unit of account is the numeraire by which all other aggregates might be measured (compared). When first pronounced there is no mechanism to ensure its adoption, for two agents can measure in any mutually-agreed units. But for exchange to extend across a network, and for an economy to scale, there is need for wider agreement.

In the economic space protocol, the issuance of credit (liquidity tokens) backed by stake brings to the fore a universal recognition of a unit of measure, for in the process of netting, credit becomes impersonalised: there is not direct correspondence between the issuer of credit and the exchanges cleared by any particular credit issuance. As the network scales, and the ‘blockages’ in direct netting become more pervasive, the role of the liquidity token grows. In the process, the unit of account consolidates its role as the universal unit of commensuration. And in so doing, its stability (with respect to the network) grows.

The following dimensions of the unit of account are the keys to its function:

l It is the numeraire through which other tokens are measured. As it is not tied to any one single asset, (and hence not subject to the pull of market forces), it is definitionally stable as the economy’s internal benchmark.

l It comes into general usage through the offers that make a reference to it. An issuance denominated in the unit of account is a form of credit/debt in the simple sense that it implies a time interval before settlement.

l Offers that make reference to it can only ever be settled by the reciprocal commodities/stake/liquidity that the receiver puts on offer: all trades denominated with the unit of account must be netted.[ Ripple (XRP) and Stelar (XLM) are instances of tokens based on the realization that money’s purpose is to issue and clear debt, and the need for money can be optimized away. The XRP in practice is still used as a “money thing”, even if it is only used for microseconds. For ECSA, by analogy, ‘matching’ means the simultaneous creation and destruction of entries denominated in the unit of account, through first expression of the offer, its subsequent matching, and then its netting without a “money thing” ever being issued or utilized. ] This is the condition of settlement, for settlement requires matching.

l It provides the system with innate liquidity, notionally prior to issuance of a credit instrument.

Three circuits of value

The Economic Space Protocol is styled as a set of protocols which give precision to the roles of different tokens, but there is a need to show how these token types and the economic processes they express relate together in the process of ‘value in movement’.

The diagram presents the circular flow of the economic space protocol.：

l The outer ring

The outer ring is the ‘real’ economy of the flow between performances, collateral and credit. We use the concept of performance (rather than, say, production) because performance covers both production and consumption: they are paired by the protocols of offers and acceptance forming a unity.

l The inner circle

The inner circle shows the reciprocal token movements of commodity tokens, stake tokens and liquidity tokens. They go in the opposite direction to the real transactions because the ledger recording of tokens mean that they are issued in response to the receipt of something in the ‘real’ economy.

As a circular flow, it could be started at any point: performance (Pe), collateral (Co) or credit (Cr), but different points of emphasis arise when we start at different points of the circuit. So, following the style of Marx (Capital, volume II), we define:

l The Performance Circuit (Pe — Co — Cr — Pe)

l The Collateral Circuit (Co — Cr — Pe — Co)

l The Credit Circuit (Cr — Pe — Co — Cr)

4、Contact Information

Official website — https://economicspace.agency/

Twitter — https://twitter.com/ecospaceagency

Facebook — — https://www.facebook.com/economicspaceagency/

Github — https://github.com/EconomicSpaceAgency

Medium — https://medium.com/@ecsa_team

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