HackMD
ECSA UPDATE BRIEF FOR CLOSE COLLABORATORS
April 2023
TABLE OF CONTENTS
-
THE ECSA PROJECT: WHAT AND WHY?
A. Summary
B. The ECSA thesis: Enter economic media
C. The ECSA project: A medium for creating economic networks
D. What can you do with it? -
WHAT IS GOING TO HAPPEN NEXT?
A. The Economic White Paper is ready and coming out as a book
B. We’ve organized into a network, executing, and started onboarding new members
C. The protocol specification is ready, the network programming model partly tested
D. The ECSA token is live, the next step making the market
E. Living Laboratory for Collaborative Finance -
MORE INFORMATION
ECSA Economic White Paper
ECSA Newsletter
ECSA Telegram
ECSA Discord (opening in May, TBC)
ECSA Whitelist (opening in August, TBC)
1 THE ECSA PROJECT: WHAT AND WHY?
A. SUMMARY
Economic Space Agency is developing protocols for postcapitalist economic-organizational expression and launching a token to give everyone access to the protocol’s expressive powers.
The first layer of the economic networking protocol stack is functional and passing most specification tests.
We think of it as a new kind of a medium. A formal medium for creating new kind of economic organization (an economic media). We call it the Economic Space Protocol. It is an economic networking protocol that gives people the power to create economic networks. Economic networks, we believe, will be for Web3 what social networks were for Web2 and shared keyword networks were for Web1. The Economic Space Protocol is like an economic system creator in a box. It enables a new organization type called an Economic Space, a programmable network where participants can publish, validate, and value each other's contributions. It introduces a new value primitive known as the Economic Space Performance and a new transaction type that involves exchanging stake for access to each other's output and reciprocal credit lines. The protocol redefines wealth by recognizing stake as preferred stores of value and incentivizes cooperation by rewarding those who align their performances with one another. It establishes distributed leadership to decide what should be valued and forms an economic medium in which all agents have equal capacities, like issuing stake and clearing credit. We think of it like a new kind of economic intelligence.
The ECSA Economic Paper “Protocols for Postcapitalist Expression”, describing the functioning of the protocol and what you can do with it, is ready for release and published as a book by a well know publisher Minor Compositions (Forthcoming 2023).
The ECSA token is live, we are right now distributing it to historical contributors. Next, we will start making a market for it.
B. THE ECSA THESIS: ENTER ECONOMIC MEDIA
What is the one thing common in crowdfunding applications (e.g. Patreon), p2p lending applications (e.g. SoFi), gig work applications (e.g.TaskRabbit), social finance applications (e.g. Wall St. Bets), cryptocurrency applications (e.g. Bitcoin), decentralized collateralized lending applications (e.g. MakerDAO), asset issuance and management applications (e.g. Enzyme), NFT-issuance and market places (e.g. OpenSea) and DAO-making applications (e.g. DAOHouse)?
They are all taking advantage of a digital medium to redefine our economic relationships. Our economic relationships have become programmable. We are transitioning our economic-organizational composition to a programmable medium.
The applications described above are the first baby steps of this switch. Our economic organization is catching up with the new substrate of high speed computer networks. Such networks with high informational capacities, bandwidth and connectivity will make radically new economic-organizational relationships possible. We think this will elevate into something that resembles an expressive medium.
What does that mean?
Just like social networking applications (Facebook, Twitter, Instagram etc.) gave us social media, the emerging economic networking applications – applications that can be used to create economic relationships (i.e. production, ownership, investment, debt/equity, joint risk-taking, opportunity-opening and upside-sharing relationships) - will give us economic media. In social networks connections are established by reading messages, re-posting, sharing content, liking, friending: the network-making is social and the ties of the network are themselves “social”. In economic networks the connections are created through offering and re-offering, rewarding, incentivizing, entering into risk and value relationships, creating credit relationships, stakeholding relationships, and other financial relationships. The nature and quality of the network is economic.
Our thesis is that economic networks will be for Web3 what social networks were for Web2 and shared keyword networks were for Web1.
Economic networks are a new economic abstraction. They are the basic economic unit, the networked means of producing, sharing and expressing value in an informationally-mediated society. They are expressions of the networked nature of informational value creation.*
Economic networks want to be born and understood but the current narrow economic language, which we’ve inherited from the industrial centuries, is unable to understand and express them - the nature of our economic composition is always bound by the expressivity of the language that we use to conceive it. In other words: we need a more expressive economic language to describe our economic networks and the networked “commodities” they produce. A language that would actually correspond to the new capacities afforded by the new informational and computational substrate.
The desire and the community for a more expressive language for our economic relationships is already here. Just like bitcoin indexes the desire for an autonomous collectively-made money, the interest in DAOs and NFT communities indexes the desire for “economic networks” i.e. self-defined and collectively created economic relationships that are more longer term (have a pattern and a persistence) and more multidimensional than just profit-taking exchange (i.e. a market relationship).
Yet what is missing is the network language: a shared grammar to understand and express the networked economic values and relationships, how the value creation is networked and how that network-value (the network premium) can be captured.**
*Think for example what is a “commodity” today: Commodities have always been summations of processes, but today these processes are informational and networked and do not always result in objects. They don’t have clear boundaries and can be held, sold, and operated on in distributed ways. They have an informatic dimension that may remain dynamic, semiotic, transactable. They are hyper-objects. The ECSA Economic Whitepaper is a value theory of such hyper-objects.
**We need to especially develop economic-organizational interoperability and its designability: bringing awareness to this interconnectivity and designing the space of relationships so that they can be re-programmed. The first gen tools have been very siloed (a DAO, a NFT-community, a blockchain, a defi protocol…) and networked only through “money”. Our perspective is precisely the design of Layer 1 interoperability protocols like money has been.
C. THE ECSA PROJECT: AN EXPRESSIVE MEDIUM FOR ECONOMIC ORGANIZATION
We’ve been working intensively on creating programmable economic networks and the new economic possibilities that they open up since establishing the project in 2015. It has been a journey. An amazing experience. And not always a joyride. But we believe we have in our hands now something quite remarkable:
A next-generation programmable platform that enables people to construct their own economic networks and shape the network's financial architecture to define, generate and distribute value. It provides us with a shared tool set, and a language, to define what is wealth, to incentivize cooperation, to establish distributed governance, and to develop markets, organizations and economic relationships not possible within traditional financial systems.
So, what exactly can you do with it?
D. WHAT IS THAT NEW THING THAT THE NATIVE PROPERTIES OF THE EMERGING P2P NETWORKING TECHNOLOGY IS MAKING POSSIBLE?
Marshall McLuhan famously said that the message of any new media is the change in the scale, pace or pattern the new medium introduces to human affairs - the message is the medium itself. So what is the message of economic media? What is the change in the scale, pace or pattern it introduces to human affairs?
Like Chris Dixon has said (Tokens are a new digital primitive), we are still currently in a "skeuomorphic era" of Web3 where design thinking is largely adapted from older domains, for example, when the early web was mostly composed of digital adaptations of pre-internet activities like letter writing and mail-order shopping. But we are beginning to see native applications that have no prior analogue and could never have existed before.
So what is that new thing that the native properties of the emerging p2p networking technologies are making possible? Our answer is: economic media - expressing and creating new kinds of economic relationships (economic networks) that takes advantage of the unique properties offered by new computation substrates and enables a range of activities that were previously impossible.
The Economic Space Protocol is a Layer 1 economic networking protocol and a development and deployment platform that enables a network of participants to design their economic organization. It provides a serious array of features and capabilities, including:
-
A new organization type
You can create programmable networks (“economic space”) where participants define, share, value and execute each other’s economic performances. Participants coordinate and communicate economically via offers without central decision-making bodies. This organization type is the next step beyond DAOs (making DAOs actually distributed and not using “voting” as the coordination mechanism). -
A new value primitive
You can frame a network’s production as a stream of performances (informational events) that its participants may publish, validate, and value. These may include the production of commodities, but the protocol can frame any activity as an economic performance making more abstract and intangible forms of value economically expressible and relatable. -
A new economic relationship
You can create a network where each economic space connects with each other by exchanging stakes. Establishing a mutual stakeholding relationship, they gain access to each other’s output and reciprocal credit lines, simultaneously creating a new networked monetary, production, investment, and risk-taking system. -
A new surplus type
An economic network (economic space) accounts for its surplus as stake appreciation, not as money accumulation. In other words, the protocol does not define surplus as a positive balance of credits like with “profit” but as a positive change in stake price. The stake valuation includes the balance of other tokens, including other participants’ stakes, commodities, and credit. An economic space can hold a surplus in the treasury or distribute it as dividends that do not need to be transformed into credit, but can remain in the same underlying token. An economic space’s stake represents access to its underlying performance, resulting outputs, and network assets. -
A new financial definition of wealth
The protocol incentivizes participants to hold on to the network's stake as a store of value. The network protocol financially recognizes stake as the preferred store of value in defining it as collateral for credit. In the process, credit takes a secondary monetary role; clearing it as soon as possible supersedes the agenda of storing it. Participant’s not only collaboratively build wealth through mutually staking and validating their performances but also get to define what counts as wealth. -
A new economic gameplay
The protocol incentivizes network participants to align their value productions with each other and assemble them to increase their value. They financially recognize that they are part of the same network by facilitating their transaction through mutual credit, as they are invested in each other to gain access to the network’s surplus. Participants simultaneously seek their benefit and that of those they transact with, and therefore the network as a whole. The protocol is essentially an economic network financial collaboration protocol. -
A new governance type
Each act of valuation from a participant is a new form of decision-making. Unlike voting, which seeks to define a collective making a decision on what to perform, an economic space is itself a decision seeking a collective to support it. Moreover, valuing performances follows market dynamics. It does not require creating a higher-powered agent like a board that coalesces preferences into discrete events and chooses a majority over a minority. Instead, it accounts for and integrates all opinions, preferences, and agendas by empowering participants as much as they empower others. The protocol is essentially a distributed general economic intellect. -
A new economic medium
In the protocol, all agents have the same economic capacities: everyone has the capacity to issue stake, clear credit, make offers, or create new economic spaces. The protocol creates functional equality that enables a more even economic playing field. At the same time, this symmetry elevates the communication dimension of the economic network, enabling information to flow equally and bidirectionally among its participants without being mediated by privileged parties. In this way, the network effectively engages in a many-to-many dialogue and negotiation about what is valuable. -
A new economic innovation platform
The protocol is a platform for economic innovation. It enables participants to create and participate in their own networks, define and share their own performances, establish their own currencies, and build their own spaces of exchnage. It allows them to shape the network’s financial architecture by determining how credit gets cleared, how stake tokens get issued or redeemed, what kinds of offers can be made, how much risk they want to take when making investments etc. In this way, it provides an open framework for creating new markets and businesses that exist outside traditional financial systems but are still empowered by the same underlying technologies of programmable money, financial instruments and smart contracts. -
A new economic interoperability premium
Like money and markets, the protocol is a Layer One economic protocol that allows agents and their performances to coordinate and organize into higher-order networks. Interoperability makes possible the collaboration required to create collective performances and outputs. In this way, participants may unlock additional returns by articulating the collective surplus values that arise from economic space interconnectedness. Furthermore, through this protocol, users may design economic relationships that create and capture the latent wealth that otherwise would be inaccessible – participants can unlock new network outputs by operating within a unified economic system where multiple economic spaces interoperate collaboratively. -
A new economic language
The protocol is a shared language to understand and articulate networked economic values and relationships. It enables its members to negotiate new economic relationships that describe how they may create, measure, and distribute the value generated from their interactions. Furthermore, this language allows users to articulate new network value forms (i.e., network derivatives) predicated on mutually beneficial economic relationship parameters in a unified economic network.
E. THE ECONOMIC SPACE PROTOCOL CAPTURES THE NETWORK PREMIUM
We want our participants to understand economy as a network, where value is created not only by individual agents, but by their relationships and organization. The economic space protocol is primarily an economic collaboration and interoperability protocol. An economic intellect. It enables the assemblage of economic spaces, and their performances, to not only capture the value of each individual economic space, but the value created by their relationships and thus of the network as a whole. This assemblage requires collaboration, and thus a protocol that not only makes it possible, but also rewards the participants for doing so. As a result the protocol allows users both to capture the value within each individual economic space, and also unlock additional value from collective network effects arising from multiple interconnected economic spaces. We call that the network premium: the premium that emerges only by the virtue of being networked and interoperable.
When participants can utilize, and furthermore, collectively define the basic layers of economic infrastructure across economic spaces, they can increase their collaboration potential, and thus their collective value creation potential, exponentially. The Economic Space Protocol creates an expressive medium for economic organization - a shared language with which participants can not only understand their current economic relationships but also recognize forms of value that go unrecognized under capitalist modes of calculation, and design new networks in full complexity and harness immense collective value from them.
This is what we mean by programming a network, and by capturing its value. To be able to program the economic relationship, is to be able to program the network. The Economic Space Protocol provides the means by which new economic relationships can capture the new value they create together.
2. WHAT IS GOING TO HAPPEN NEXT?
A. THE ECONOMIC WHITE PAPER IS READY FOR RELEASE
We’ve now finalized the ECSA economic paper “Protocols for Postcapitalist Economic-Organizational Expression” - it will be published as a book by a highly respected Minor Compositions publishing house (Target date: May 2023; commercial distribution: November 2023).
The economic paper outlines the grammar (a set of protocols) for creating economic networks which we believe will be for Web3 what social networks were for Web2, and the shared key word networks, were for Web1.
It especially shows how new, more intangible and abstract, value forms can be encoded and how mutual stakeholding can act as a new economic networking primitive. It furthermore positions ECSA into the history of economic thinking (in relation to Marx, Keynes, Hayek, Schumpeter, Sraffa). We think it is a serious contribution towards moving economics into the information age and starting to think of programmable political economies. It answers the question: what comes after DeFi? What comes after NFTs and DAOs? What is that new thing that the native properties of the emerging p2p networking technologies actually make possible? And our answer is: economic media - expressing and creating new kinds of economic relationships and accessing the premium of being networked and interoperable.
The premise of the economic paper, and of the ECSA project, is that a new understanding of the economy is required to unlock the full potential of distributed computation and an informationally mediated society. It means understanding the economy as a network - a group of agents interacting according to certain shared understandings of the relations that make the network and its state - and opening its interaction protocols as a design and expression space for everyone.
Please read this short (5 min) medium piece first “What is cryptoeconomy - a macroview”.
It is like a quick intro to the Economic Paper.
The piece ends up saying that money is a technology, and through the emerging p2p networking technologies we are getting in our hands the power to create similar interoperability protocols as money has been. This is empowering us to collectively define what a value and an asset can fundamentally be.
The Economic Paper outlines (1) how a collective definition and expression of a value functions and can be achieved using the new cryptographically enabled networking technologies and (2) how this situates in the history of economic and political thinking. We think the Economic Paper is a major contribution in pushing economics into the information era and in opening it to politics. We show how money and finance can be very concretely reappropriated and how the power of money becomes, in the hands of the multitude, an instrument of freedom.
See here the Foreword, Ch1 & Ch2 of the Protocols for Postcapitalist Expression. Agency, Finance and Sociality in the New Economic Space (New York: Minor Compositions, forthcoming 2023)
B. WE'VE ORGANIZED INTO A NETWORK AND STARTED ONBOARDING NEW MEMBERS
We’ve launched the ECSA Economic Network as our mode of organization, governed by the ECSA token: Network nodes with specific working tasks have formed a network through economic “connecting”, using mutual stakeholding (stake swap) as the network-forming primitive. We have started onboarding new team members to the nodes.
The founding nodes of the network are Manifold (Development node); ECSA Labs (Living laboratory for collaborative finance); and next to be added is Lakes of Wada (Fundraising and Market making node). If you are interested, please don't hesitate to get in touch.
C. THE PROTOCOL SPECIFICATION IS READY, THE NETWORK PROGRAMMING MODEL PARTLY ALREADY TESTED
In Q4 2022 we launched a new development node, Manifold, for the development of the Economic Space Protocol. Its specific task is to detail the multi-layered protocol specification with 5 layers that build on top of each other: A programmable network protocol (a distributed VM), a distributed accounting & asset protocol, a distributed exchange protocol, a distributed credit protocol and a distributed stake protocol.
The first layer, a programmable network model (a distributed virtual machine), is functional and already passing most specification tests. There are prototypes of the Accounting layer that are still subject to reiteration.
Source code is available at Manifold’s source code repository. As the Manifold team is now scaling, development will accelerate to complete the rest of the layers.
See here a Video Explainer (23min): Economic Space Protocol as a formal grammar i.e. as layers of concrete networking protocols (and their current development situation).
The Virtual Economic Network Protocol Stack
D. THE ECSA TOKEN IS LIVE, THE NEXT STEP MAKING THE MARKET
The ECSA token is live. See more news from the ECSA Berlin Office.
We have started distributing the ECSA token to our early investors and contributors. The Token Landing Page is opening soon (Target date: May 2023).
The next step is deploying the staking contract and the ECSA DEX. After that we will start making the market for the token by first carrying out a multistaking from the Treasury with our close collaborators and strategic partners. The whitelist opens in August 2023 and is open to all ECSA Network members (TBC).
The second step is opening the market for the ECSA token through the ECSA DEX (custom liquidity pool). Target date Q1/2024.
The ECSA token is the organizational and communicative interface of the ECSA project: On the one hand, it gives the holder a stake in the ECSA project i.e. an exposure to the network performance and the ability to benefit from the token appreciation. On the other hand, it gives the token holder economic space agency: the right (the capability) to participate in the network generation, governance, agenda and value setting, and sharing in the premium of being networked (the value of being networked and interoperable). It opens a two-way communication pipeline: the holder can affect the network; and the network can affect the holder by sharing "dividends" (network outputs) to the holder.
For example, the ECSA-book-pdf received by every token holder, is a first such "dividend" to the ECSA-token holders. It is a literal product of the network. Yet the book does not need to first turn into 3rd party issued money, but it can side-step the market and the need to be "bought&sold", and just flow directly to the token holders. The ECSA-token is a token with an organizational capability or network capability built into it; it is generative of economic relationship, of postcapitalist economic network. It is a new kind of token.
As an interface, the ECSA token is designed to both bridge and mediate. Its issuance model shields economic spaces from capital market volatility and its narrow valuation convention: the token acts as a boundary protecting the values and development inside the network.
Financially, the ECSA token indexes the performance of the network and captures its network value (network premium). Beyond individual economic spaces, it refers to the network as a whole: not only the value produced by economic spaces, but also the value created between and within them, i.e. by them forming an interconnected network (the network/interoperability premium).
The token is also constitutional to the network: its core function is to maintain liquidity and stability during the bootstrap phase. Its purpose is, on the one hand, to concretely establish an economic network (a distributed economic alliance) among network participants using mutual stakeholding as the network primitive and, on the other hand, to bootstrap the network liquidity. Through it, holders participate also in the network’s governance.
Finally, the ECSA token price in USD indexes its value ascribed by the capital markets. The reverse exchange rate indexes the inverse: the USD price in ECSA Units indexes the value of capital markets ascribed by the network. The more self-sufficient the network becomes, the less it must value the capital markets relative to itself. Our wager is that it will decrease the value of USD in the network and correspondingly increase the value of the ECSA token in the capital markets.
E. LIVING LABORATORY FOR COLLABORATIVE FINANCE
Target date for launch Q4/2023.
3. MORE INFORMATION
ECSA Newsletter
ECSA Telegram
ECSA Discord (opening in May)
ECSA Token Whitelist (opening in May).
