# SESSION 7: FROM COMMODITY TO PERFORMANCE

THURSDAY 2.7.2020
6amPST/9amEST/3pmBERLIN/11pmSYDNEY

PLACE: ECSA ZOOM https://zoom.us/j/2022138511

Telegram: https://t.me/joinchat/IivZHxdMBb3PKtNDr5QdVg

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READING: The new Section 5: FROM COMMODITY TO PERFORMANCE

5 SIMPLE EXCHANGE:FROM COMMODITIES TO PERFORMANCES
5.1 Simple commodity exchange
5.2 Simple commodity exchange: a ledger representation
5.3 Implications of simple commodity exchange
5.4 Performances
5.5 Explanation of the performance derivative
5.6 Commodities, performances and stake: the return on performances
**5.6.1 Simple commodity production
**5.6.2 Cumulative commodity production
**5.6.3 The introduction of stake
**5.6.4 Returns to stake
5.6 A Value Theory of Performance
5.7 Implications

Appendix: Performances as stakes on the future . . . and the past

LINK TO THE TEXT: [**THE ECONOMIC SPACE PROTOCOL (ECSA ECONOMIC PAPER)**]
https://docs.google.com/document/d/1TuTnsh50jtB710D5YwEuIxPG-bT1ZkokCLErV0l8Z60/edit

Akseli: Why did we think the need to rewrite this section and start from simple commodity exchange?

Dick: There were a couple of issues. 1.we didnt have explanation of exchange. Writing a simple version of simple form of exchange and gesturing to general form of exchange that is to come in the following sections. Simple exchange is simple, not dynamic.

The other thing was, there was a concern about the nature of performances and getting a return out of performances. This version explains more clearly.

There was a design elaboration of Jorge's ledgers, and organizing them into subsections.

The bottom line question is for me do people think we have enough clarification going here, enough to understand the role tokens play? that would be the ideal if people would say, now I see what is driving that logic.

Section 1

Akseli: We need to characterize the process of exchange because it is not so clear immediately. The first section is about what are the key differences to the neoclassical and Marxist accounts of simple exchange and how it starts. Talking with Collin, they assume market. We simply cannot do it.

The first two sections, we focus on contracts, and we focus on exchange, agent and the network, and the time interval as essentials for our account.

Dick: Time interval is where simple exchange docks with the derivative.

Notions of exchange start with barter, saying start with barter and getting more complex. Analytical simplicity of two people engaging in trade and discovering barter.

Here, in this network, you dont know the other person you are trading with, who is on the other side, so your offer as being accepted works its way around network in which you might not have control over. Tokens bridge time interval and it will eventaully settle.

Even in simple exchange, it still got complexities of netting and settling on a network.

Akseli: That is because of the scalability, and we need to start from there.

Leanne: I want a concrete example.

Colin: I'm with Leanne.I need it to be stupid, I need a stupid example.

Ben: They are trying to get a t not simple exchange but simple exchange with token.

In a simple exchange, simple value is a model of that. It is to contrast with barter.

The gift is the basis of modern antrhopology from Levi Strauss to Boerdiue to David Graeber. Whole issue is qualitative things exchanged from qualitative values which are parts of the social itself. The gift's value is a counter gift seperated by a notion of time interval. These are non monetary exchanges that set the basis of society.
The most classic example is the Kula Ring by Malinowski. Dick is taking that structure of the gift and saying, we will play with that interval of time, obligations and counter obligations, people have whole sets of them as in a portfolio, but these are qualitative exchanges rather than quantitative. That's all in the background, then you get to alianeble exchanges in Marx that are quantitavely determined, simple value containing the fetish. He says that's where everything lies, and you unpack from there the beginning. That's the background Dick was trying to say hey, Hayek doesn't talk about exchange and that's what all the social sciences talk about as the beginning of money.

What happens when you mediate simple exchange with tokens and not money? We will argue that tokens can exert themselves at the very beginning and they do something very different, and make possible a whole set of issues that are not clear in Marx.

What we originally had done was start with Hayek and efficency of information argument, but didnt have a way to attach it to social system as a whole, which is MArx building up.

Dick, do you want to explain a very simple example?

Dick: I wish Jorge were here, he talks about it with far more clarity than I can.

Looking at the bubble, the problem is authenticity, exchanges against liquidty not commodity. It adds complexity too quickly because essentially the simple version of the offer is offer of commodity in exchange for a commodity token.

But what diagrams say is if we are going to match this, assume no one to one match because you dont know who you are trying to trade, there is going to be a liquidty token, the reciprocal token will give a generalized form, not a
token that is specific to the commodity you have offered. The effect of that though is that it does obscure it a little bit because instead of it just being carrots for a token it becomes carrots get offered to the network, liquidity gets offered in return, and who feeds up if the carrots has to all work its way out across these various ledgers to find out who wants carrots. But who won't necessarily be getting them directly from the person who offers carrots because of course it may not be a sufficient set of matches, so the carrot offer's acceptance has to go through a whole lot of you know a complex netting process.

The problem here is with a very simple act of exchange, carrot to token, cant be expressed in a simple form without being deceptive.

Colin: I need to walk me through, I am a person with a problem, how am I going to solve my problem interacting with this system? I'm unemployed, hungry, I have this stuff and get rid of it. The problem here is that we are correctly dismissing all of these accounts of money that assume money arising out of horizontal exchange. We take this pill saying exchange begins with assymetry, but then we have problem of counterparty. COunterparty is hidden behind this network, why the network is doing that? What is the motivation of network to match my offer and who bears the risk of that?

Leanne: I want to see this thing with carrots. I didn't understand difference between Commodity Y token and Commodity X token.

Colin: One is potato and one is carrot.

Leanne: With potatoes and carrots, dont you need to know the counterparty? Why not put it on your balacne sheet?

Jonathan: That's distributed matching. YOu might have carrots, I have ptoatoes , Collin other. Maybe we don't directly connect with one another but commodities
sort of traveling that circle. You could map, you can amplify that circle so that it's like the entire network and the commodities may match based upon their
equivalents in value to those parties without actually having to pass through
intermediaries because the network sort of does all the math.

Akseli: you can do that without money.

Colin: You all are focues on this clearing. Payment system is not the problem. The problem is, is the system acting as broker or dealer?

A broker is matching supply and demand and not carrying on their own book. Real estate brooker for example.

A dealer is carrying that risk in its own book.

One question is the network carrying this risk? And how does dealer finance their balancing position?

Jonathan: Network is broker. Network accepts your offer if it is matched.

Colin: I'm sitting here with carrot, and I put offer for a carrot. Nothing is going to happen that's going to help me until there is a counterparty.

Dick: Which is why on Jorge's diagrams there is nothing on Ecsa's balance sheets until the offer is accepted.Then the network has found a counterparty.

Leanne: When does the carrot leave the balance sheet.

Dick: it is only an offer. Why is it an asset at day 1 that gets sold. Until it's sold, wallets and offer are only hypothetical. It is only in the balance sheet once there is an exchagne.

Leanne: even if there is an exchange, then it should be subtracted.

Colin: If i eat the carrot, so I have a non performing carrot.

The person who bought my carrot, can get a carrot for someone else? Or is it written down?

Dick: I agree it is important. I have to get back to it.

It has to do with default risk. All we can say here is of course there is going to be, it happens with all exchagne. People will have a ledger based repurtation, so their propensity to. deliver carrots will be known.

Colin: Are the carrots fungible?

Dick: Each individual carrot is fungible. I dont know.

Jonathan: I can't answer this, but Jorge would have said yes. Tokenizing the commodity will depend on having abstract types. Even if you have secure e, then you have delivery risk on the redemption side. What kind of carrot will I get? this is a real question that I think our model hasn't dealt with.

Dick: On the other hand ,performances are all individual. So in the sense
carrots are fungible but we've also gotto be open to the possibility that there
will be some things that just get produced once. And fungibility is not its principal attribute.

there is a small dealer function, the netowrk will spontaneously issue liquidity to facilitate a match. Not a conventional dealer function because there is no return. But for an instant for credit to be issued, there must be balancehet of the network to provide liqudity.

We can do more work in explaining carrots and banalities of very simple exchange processes

Claire: About liquidty function, if the network is only matching offer or accepting trade once th4ey have a counterparty, is the funciton of liqudity just to connect people who don't know each other. I thought liqudity fcuntion was to sustain the time interval between offer and accepting.

Akseli: It is.

Claire: The other impression I was getting there is no time interval because offer accepted only after there is a counterparty.

Dick: We can see it as a duration, it may happen in virutally zero time, but that step to next step requires temproary invention of liquidty.

Jonathan: These are basically quantum matching. So that there might be a moment where there is no match in the network but the network can still complete a transaction if one of the traders is willing to accept liquidity tokens in
place of commodity tokens.

Liquidty tokens are not genral liquidty tokens but assigned to counterparties.

Colin: Now we are saying that individual agents act as dealers and supply liquidity to network when they elect to accept liqudiry tokens in exchange for their performances.

Here is a transaction, here is a situation where I elect to accept liqudity token, and here is the reason or not accept and reason for that. I want a scenario for these.

Ben: IT has to be clarified exactly who issues a commodity token in these instances, and who issues a liqudity token, and what's the realtionship between them.

Dick: Network will issue liqudity token to bridge that gap, and buyer will issue a commodity token.

Ben: how does that ramify because when you dont issue, you dont enter the system. You enter the system through commodity token first. Lioqudity token is in some sense index of excahngeblity of the whole system. that's why you have to be able to see the relationship with these simple exchanges. In MArx, it was unfolding from barter to general form, and reversal from the total. That a logical necessity of unfolding or temporal nececssity argument. We say in some sense they fold into one another in the v, and that's what people dont see

Jonathan: I want to take one of Collin's seminars. Collin is giving a seminar this week. He doesn't want carrots but Whitney's apples. So my carrots go
to the apples, the apples go to Collin, and Collin cant give a seminar yet so I
get a liquidity token, which when the seminar comes up I can give to him in exchange for the seminar.

Colin: So I issue you liquidity token. I am confused. The liqudity token is named or is it general? Is it index of general success of the system or does that have names for specific?

Jonathan: Liqudity is backed by particular agent on network.

COlin: You dont have a commodity token I owe you for this seminar, you have liquidty token.

Jonathan: When you offer your commodity I can use those liquidity tickets to buy it, but I can also use your liquid tokens with anyone who you peered with. So you've actually issued a form of money which could persist for a time on the network until it's cleared. I could also use your liquidity token with anyone else if you're peered with because they accept your liquidity tokens as well.

Colin: If they are personally marked and also traded at par, why they are personally marked?

Dcik: I dont believe they are personally marked because because they are in the unit of account,

Liqudity token can be issued in two ways, one in response to commoidty not yet produced. Other is the network spontatneously issues liqudity to do a netting process.

In that case credit is. issued nad cleared. Jonathan is talking about someone issuing liqudity and has backing, that backing is by stake which is tied to perforamnce. That's why we can talk about the commodity in the absence of talking about the performance because in this system the commodity is a special case and the performance is the general case. It istransactions around performances that have stake. This is the way you get collaterlizaed liqudity.

Jonathan: Colin's seminar: he got his apple. And so the network issued liquidty tokens and debited his ledger. He got credit because he was able to receive the apple. So liquidity tokens were issued to cover the fact he hasnt commodity token to put on the ledger yet. so here's a debt on his ledger. So when
he puts his commodities on the on the market that will clear.

His creditworthiness requires stake.

Dick: we will trust Colin's credit because of the stake.

colin: I am a person with problem. I have this cool stuff that I'm going to do, but I'm broke and I have to find food. And I gotta read Kant. How is this network gonna solve my problem?

How much stake can I get to sit around my apartment and read Kant for people to to lose faith in me? I promise I'm gonna do this thing people stake me and as a result of that I get stuff. I mean that's that's what's in it for me.

AS a result of people's staking, I get to eat stuff. IT is like kick starter, except you solve the problem of accountability problem. Everybody knows kickstarter sucks.

When does my credit end? In order to do this, I can't just find anybody, I have to find people in network, or find people who will come to network and bring cash.

There are other use cases I can see. Simpler because it doesnt involve imputation of value into future, which makes it harder. Other is I have carrots, and I'm going to sell my carrots, alienate them into network and get this funny money and see what happens. I'm walking by street and they are participating in Economic Space. They say sign up for ECSA with your smartphone. Do I have to stake to get in to network, will network issue me to induce me into getting into network?

Dick: I think in the last case it is easier to pull out dollars nad buy cash. No suggestion is that this network is the best way of performing all acts of ecxchange. In terms of you going to graduate school, what people will stake you on is hard to answer. You will make an offer of stake and people will take it or not. Hopefully it will be successful but it may not be. Our aspiration is people wiill be staking in a diverse way, it wont be people going all way to Colin.

Colin: I am issuing stake. I am equity financing myself. Is it personally marked, or is it negotiable and fungible? Dees it trade at par?

Dick: Staking is your performance, your performance can get up or down in price. In contract you can say there will be delivery of classes, or say selling for revenue. That may be in nature of perforamnes you offer. PRice will depend on to what extent you are achieving what you promised, and how network thinks your offers are useful socially, whether stake invested in you yields return or not.

Colin: Suppose I am doing good and my stake is going up. Does that mean if I bring new investors to network, my inital investors gaining return as I'm rising, and I'm pitching to investors who never heard of ECSA, and say you want a piece of this? If my stake is going up, when I bring investors to network, they get more stake per dollar? How does my appreciating stake increase my value proposition to new investors?

Dick: The network couldn't stop you to issuing a new stake. Couldnt stop you disappearing either. It has certain parallels wiht the way we understand liquidty. I like the way this got written into section 5 , there will be performances combined to produce new performances, eventually manifesting itself as commodity to be sold or in which network says we value this via the ECSA perfroamcne token. Network saying we like the shit Colin puts out, we will value it, reputations of performance getting acknowledged, network will issue commodity token. The formal requirement of that token is it gets distributed down to stakeholders that put input into creating the commodity output.

Dick: You can issue multiple equities. But they will be differnt equities. Smart contract embeded in saying network recognizes and then token will be issued.

Thought that drove this design was social investment bonds. There is no stake, but a measure of performance metric that triggers a pay out. Colin's objective to set up alternative grad school. In the deal, Colin nominates the ways in which succes of college will be acknowledged. People might say I'm not staking that for this that reason. Negotiation of that contract. Once achievements start recording, numbers of attendance, reputation, then network can automatically trigger/ release new issuance of commodity token. Why would you want to do that? Throughout econmy, the level of output and the issuance of tokens stays
directly at par, so output goes up new tokens get issued. the question is who owns those tokens. Hierarchy of performances say tokens are owned by the staking relationships that go down the performance hierarchy.

Jonathan: If that's a commodity token as a result of perforanmnce, in what way is it redeemable? It is like receipt rather than commodity token.

Colin:I thought commodity token was issued before the thing is produced. Now it is like receipt.

Dick: Acceptance of commodity token triggers issuance.

Colin: Acceptance one thing, but delivery is another thing. Are we talking about acceptance or delivery? Interesting to me was commodity token is issued in acceptance, hence eneables production. Production takes place after acceptance and before delivery. There is offer there's acceptance there's production there's delivery.

Dick: I understand the point about time interval between acceptance and delivery. But this might not be the case all the time.

Collin: If we are talking about antrhopolgical critique of pol econ is the error with surplus. In reality you only produce a surplus if you know there's gonna be a market to dispose of it. Nobody wants to produce a surplus if there's no market.

Reality is offer comes first, then production happens. This is why farmers buy futures.

Dick: We have to think about that.

Akseli: This exploded so quickly into the next steps, and next chapter, I was thinkin if we couldslow down to what is happening here.

Dick: We still havent gotten right is the really simple banal issues that we are not explaining well. Timing issue.

Jonathan: logically feasible to do offer matching the way you and JOrge described. What I dont see accounted for is risk and counterparty default, how is it shared?

At a level of managing exchange that doesnt require money, it seems that protocol can deliver. In terms of all the other contingencies that process ignores, I dont see that the process answers my questions. The issue of commodity token being created after performances, then being distributed as a receipt and not to be sold.

Dick: I dont see it as a receipt. In Marxian value theory, value of output is retrospectively validated.It comes off the production line but it doesn't actually have value until it actually finally solves the use value.If it sits in the warehouse it is zero. Value can in that sense only be retrorspcectively attributed. we're assuming that the stuff that rolls off the end of the production line is of good quality in demand you know that there we will be a market port. So here what we're saying is that the commodity token doesn't get issued as a receipt. It's that eventually the network and it doesn't require invoking the ECSA performance token as the networks overall validation
of what's deemed valuable.

Once something is valuable by network, such as COllins program, network is saying hey there is output here and producing commodity token in recognition of that output. Time of that recognition doesnt seem to me a problem if it is a different form of commodity token than that issued by exchange of agents.

Jonathan: If the output is now on offer on the network, and there's a commodity token for that output. Colin has studied Kant- all polt econ, did all particualr works to offer seminar. He has done all the other preparatory work which was part of the micro performances which allowed to produce particular commodity. The commodity token is for seminar that could be traded in the network which people buy to attend that seminar?

Dick: If I said to you you have to buy commodity token to attend the seminar, so we saved the seminar is a
commodity and it's sold and would say that makes complete sense. But what if Collins says I'm offering these seminars for free because it's a the social good is being presented in my seminars, and the network says yeah we'll be recognize that is value creation even though it's not being sold for a price. But there has to be some specification by the network of what performance triggers what recognition on the network is required to perform the equivalent role of price in sale.

This is where the issue of reputation and ackonlwedgemnt gets in. Once it is deemed public value, it is the equivalent of being sold. This flows back to producers of inputs into the output. This is not sold, it is a performance that is validated. It triggers a sale or a
commodity token but then owes its way back down to the providers of the input, in the first instance Colin.

Jonathan: I support Colin's project because of this and that. I don't want to go to them but I want other people to go to them. So I stake his performance and it succeeds and this is awesome and I get a commodity token in recognition of my stake.

What do I do with that commodity token?

Dick: you can use it to trade.

colin: doesn't it reperesent that something already happened?

Dick: It is an extent of value of the network.

the ntwork that produced the output and he's not yet recognized by a token.

Colin: You gotta take it to the bank somehow. In Jonathan's scenario, he gets increased ability to expand creditworthiness of others. If he stakes. me and it succeeds, the network knows the kinds of things that Jonathan stakes tend to succeed, so we should give more credence to his ode of confidence and in the form of staking.

Ultimately, what's the point of that, is it just a fun game? Will the platform enable people to make a living, being day traders in stake? I'm going to vote yes or no, and I will get paid for that.

Claire: We are not deciding what the network assesses to be valuable. WE are providing a framework through which-

Collin: That's gonna depend on what he gets as a reward in staking something successful.

Claire: I was trying to clarify what that commodity token does. The commodity token that Jonathan gets for staking and Colin's project being succesful. My understanding was that Jonathan uses hat commodity otken token to participate in the economy. So is that what you're saying Colin that that creates a potential
incentive for people to become traders, to become like professional stake traders?

Colin: In another group we were talking about, I've been doing this hussling in internet. I have people who like this that follow me. My friend Stephane, a grad school drop out, a business guy with a foot in academic world, spending time in Facebook talking to academics. The petson Jonathan was describing, these people literally exist, they pay me. Is Stephane going to sit there curating young academics and get rewarded for that activity?

Dick: It is not a form of patronage but for return or value created.

COlin: He doesnt have patronage relationship with me but has a stake traded on network.

Dick: In DEfi we see all these markets emerging where people issue stakes, people making livings out of buying and selling stake.

Jonathan: I just going back to this question of them the
commodity token being issued as a result of performances .I mean until I saw this I think your assemblage
of performances and the way that's described is really brilliant and I mean I feel like that's a very accurate sort of schemization of the way in which performances might assemble, two or more performances come on commodities can be combined in a network mode in order to create larger performances which then fall under a
single umbrella and serve basically as you know one unit of something. What I'm not clear is the way in which that is rewarded by the network. Because token as described so far it seems like it's more of a collectible rather than something that has more money like and a function. But this is how I'd imagined it before I thought the performance will be rewarded with
performance tokens which were then the thing that was available to trade on the token markets. Which is sort of like is an interface to the outside of an economy which would then allow sort of an inflow of wealth into the system rewarding all participants in the perfromances, interface in capital markets, and indicate the vitality of the platform oerall. So the performance tokens actually the issuance would signify to the larger market that there is a vital process taking place on the ECSA platform. And Bitcoin mining and being successful
right, the way in which the network demonstrated its own coherence its own productivity in its own world.

Dick: I dont know what a perforamnce token is in that sense that makes it differnt from a commodity token.

Jonathan: They are interfaces for exchange on the network. The way I'm talking about a performance token
now is it becomes the bridge token. Basically, the token eexternal to the network can trade on token markets.

Dick: I think that conflation we have is, what you are saying is not fully covered by what I'm about to say. We are playing the ECSA performance token which are the networks's evaluation of all things, of which Colin's contribution will be part, which will articulate with the outside capital market which will be that that which monitors the overall performance of the whole network, whole economy.

At this stage, we are talking about how does the network, given that is going to acknowledge Colin's contribution as creation of output, which in the convential economy be acknowledged by sale and price, and that money gives you thing to buy other things in the economy, here we say commodity token is expression of Colin's output,Colin has created something validated as a commodity, it might have ongoing life as performance, but what is being ackonlwedged is not its performamnce but its commoditiness.Its tick the box of any use value.

Performance is input into the output. When that gets acknolwedged as a buyer by a commodity token, it is the equivalent bit of being acknowledged by price.

The question is what an you do with commodity token?

Leanne: Do participants need to get commodity token to cancel out their position?

Dick: That would sort of be like entry tickets, that
eventually these entry tickets will be retrospectively issued that by which you could buy your way in retrospectively. No that's not the intention.

Jonathan: Lets go back to carrots. Commodity token for carrot would be redeemable for a carrot. Now we have a performance that's taking place and there's a commodity token which is distributed back to all the performers, what's that redeemable for?

Colin:It just sits there and records the total number of carrots that have been eaten in human history.

Dick: It doesn't . Carrots have already been valued, but your output hasnt been valued. You've been creating perforamnces that network hasnt yet acknowledged. Eventually, in this story, network acknowledges it.

Jonathan: If i hold a commodity token for carrot, it is redeemable, if I hold a token for a set of perforamcnes, what do I do with it? Who wants it to be tradable for redemption?

Dick: I dont see that but I have to think about that.

ben: I think Dick is saying that Commoidity token now indicates exchangebility, Colin's token can be exhagned for carrots, but how do you determine the amount commodity tokens you get by Colin's performannce. YOu say these seminars are exchangeble by thearher perforamnce. How many commodity tokens do you get? what is the commensurability of it? This is a new thing, so it hasn't been valued, the first determination, it's going to have a quantity,will it get how much pounds of carrots?

Dick: that to me depends on the contract Collin has signed with his stakers.

The part where I'm getting stuck in responses is that until a commodity token is issued, Colin is not seen to be produced anything that has a value.

They are doing perforamnces.

Jonathan: he doesnt care how he is seen, he cares about how that might transact. Exchangebility, pure recognition is meaningless, what is meaningful is that recognition trasnsitioning into exchange. Other tokens have liqudity because they are tokens for redeemable objects or things that have use values. In this case this is a token after the fact which is something
already happened so it would be redeemable for what, share of the memory of that thing ?

The use value is not future looking.

Dick: Colin's output has not been paid. Colin is doing everything on stake. There are obligations that come with that stake that Colin has to pay back.

Jonathan: this commodity token is not going to do it. No one is going to but something, a ticket for performance that has already happened.

Colin: The only reason I would need this thing
is if I promise to give a seminar and didn't do it now I have to cover my class. I have tickets for Jonathan's seminar that he gave 10 years ago.

Leanne: Colin's workshop, didn't they have to issue liqudity to close that out?

Dick: I think I used liquidity, I sold a seminar on credit.

Dick: They have to close their position I agree. It will work its way around the network, that's where the ledger balances.

Leanne: Then that gives value to the commodity token,to
close out that position.

Dick: That's what I thought.

Leanne: Then if Jonathan keeps it stuck on his wall then the other ones that are circulating will increase in value and can be used to close out.

Dick: Yes, because they're attached to a particular performance that if some people stick them in the drawer and choose not to use them the outlets will increase in value as a means to pay up. I think that's right.

Leanne: My understanding is that people have to attend Collin's conference by issuing IOUs, and have to close them out by buying back a commodity token, and that cancels IOU, or? I am getting lost between tokens and how they get cancel out. Whether a commodity token can trade a liquidity token or whether you have to buy back your liquidity token... There is an issuance and destruction. And that what gives the value.

Dick: I think that's right.

Colin : They have to be valued in the act of destruction, of liqudiation. In what exchange are they liquidated. If they are created in the beginning?

Leanne: Collin's students have to buy them back.

Colin: Problem is my students are short in this seminar, how long will they finance that short positon? Do they buy back them back from me, or I take them, I alienate them on the market and now my students have to go on the market in order to get them?

The students had o be short a seminar somehow and then
when they gets the commodity token they annihilate.

Leanne: Aeen't they long seminar because they got your seminar?

Colin: They short it because they got it but didn't pay for it, so they owe it.

Leanne: Or they are long seminar because they gave you IOU.

Colin: That makes it short. They consumed it they're not holding it.

Leanne: YOur students have to get that token from the marketplace, from Jonathan. IT is going to cost them.

Jonathan: that is the way of compelting the circuit, people short a token that will be required to purchase that seminar. And then they have to repurchase by whatever offer matching system we describe, to sort of cancel out accounts.

I need to think about that more.

Leanne: Do they short token? I thought they were issuing a liquidity token, not shorting a commodity token.

Colin: then how do you value against the other?

Leanne: They should be par for that person. So if they instead of shorting the commodity token, they issued a liquidity token and then they have to liquidate, close that out by then buying the commodity token that was issued later.

Jonathan: So Colin has to buy the rest of the token.

Colin: If I have to buy back that means I short my own success.

Jonathan: You took a lot of money to get there.

Claire: How students pay for this seminar, talknig about commodity and liqudity tokens, I thought you exchagne commodity token for liqudity token at some point.

Colin: This is the same question we were asking. I thougt commodity tokens were produced in the beginning, now I see they are produced at the end.

Claire: I thin I'm understanding that.

IT makes sense to me that when offer of carrot is recognized by network, it is same process recognizing the value of seminar. That's the point where the exchange gets realized.

Jonathan: Exept in the first case, that recognition is advalroization has its counterparty even though mediated by the network. In this issuance of seminar token, who is the buyer of that?

Leanne: The stakeholders are receivers of commodity token.

Jonathan: Party yes, but not counterparty.

Claire: Is the analogy, I am going to produce some carrots? The problem is we are getting stuck in this process of production.

Akseli: I have been collecting some of the questions, for the next time, what would make the most sense. Questions were very good, next time how about if we try to provide this example?

Leanne is asking about a detailed balance sheet.

Colin: Make model with three good economy, one person farming, one person selling carrots, one person giving seminars.

Dick: Hard to do at this stage.

Akseli: We also need to get every part of the paper drafted.

Dick: It is going to be stability and volatility. And then the ECSA token.

Akseli: That plays well with it. LEt's put that into agenda of making that example.

Jonathan: WE need to follow up with how performance is recognized and valued. Simple exchange can be managed with liqudity issuance, offer matching, getting quantum swaps.

akseli: When you see what's happening with Compoun and the interest in de-fi, decentralized exchanges, they have shown hhow that works.

We are opening what can be used as collateral. WE are saying that we can script these performance scores that can be collateralized.

You were saying that what's not clear to you?

Jonathan: We are offering the possibility of collateralizing new asset classes. The way in which the
recognition of performances that have been completed creates value for its stakeholders.

Dick: This is a real struggle for all of us , trying to get the intuitions to work clearly and systematically. I sitll beleive in my gut, what we've been talking about issuance of token in time of recognition works. LEanne's offer is fabulous.

All of us need to keep thinking.

At the moment, we are running a blend of intuition of logic, which is under stress, it has its explanatory limitations.

Ben: RElationship between commodity token and liqudity token, that is really crucial to this argument and distributed network is supposed to allow a seamless interface between them. I don't think anyone is clear about them. As you pointed out, Jorge starts with liquidity token and ends up with the commodity token at the very bottom of the diagram.

But in fact, most of us would expect the oppposite presentaiton, as you said Dick, tryingt o turn it on its head. The classic stuff in gift-countergift antropholocial issue, were part of a whole system held by some qualitative value- status, mana. The question
was what was that relationship between an individual exchange and the total system. We're trying to achieve
that by a match matching all right all the offers get matched at the same time and and netting and clearing.

I have always thought that if you could generate a quantitative socail derivative out of qualitative gift countergift, by giving interval and giving delivery date. I dont' see that clarity yet between commodity and liqudity token.

Dcik: WE will see this isseue of credit issuance and clearing.

Ben: A couple of examples, but then staking is going to feed back into the system. What happens with that commodity token you are supposed to be issued when you are staking, is it redeemable for anything?

Akseli: For the next week, let's try to put that example together. Leanne, let's try to play out that account sheet.

Leanne: I can send something and everyone can participate.

Jonathan: I would say htis. Now that everyone is getting more familiar with ECSA project, you might also think about your own version of the way economy could best be expressed. IS there a way you want it to be narrated. COlin emphasizing user point of view, we might think about liqudity or stake. What you think would be needed to be accounted for your point of view.

Zoom Chat:

From Leanne Ussher : I still don’t understand it.

From Economic Space Agency : @leanne _what_ do you not understand?

From Colin Drumm : I don’t understand what “the network” is. what does it mean that “the network” accepted my offer?

From Leanne Ussher : Even starting at the balance sheets. I think If we start there it might help me, but happy to wait.

From Colin Drumm : or sorry the network “matched” my offer. Why did the network do that?

From Leanne Ussher : I think the balance sheet should have real assets as well as your tokens.

From Jonathan Beller : I thing “the network” is the surface of the interface. What happens behind it is out of any agents control. That’s too simple, but basically it, I think

From Colin Drumm : i get that I guess but is “the network” bearing risk when it does these things? Why or why not? If it bears risk, it can’t just be an interface it has to be an actor

From Jonathan Beller : yes. Presumably the risk is to be distributed across the network in which everyone is a stakeholder. But that’s what I don’t get. How that risk is distributed

From Leanne Ussher : but surely adding carrots would simplify.

From Colin Drumm : I’m team carrot

From Leanne Ussher : I don’t see how it could confuse it
From Leanne Ussher : I agree. If you relate to the real world goods, services or intangibles
From Leanne Ussher : These seem to be critical
From Leanne Ussher : I’m OK with the network
From Leanne Ussher : (or I’m not worried yet about the network as I’m still trying to get past the absence of carrots)

From Claire : is that just default risk?

From Colin Drumm : yes

From Roberto : -I suppose there is a dealer function in the sense that network participants have a stake in the network’s trust, and in the potential of scalability (of a potential roundtrip exchange, for instance).

From Colin Drumm : But my question is whether the person who got defaulted on eats the risk or whether the network does

From Leanne Ussher : so only trade for standardized goods.

From Jonathan Beller : I think it is the person holding the token that can no longer be redeemed.

From Leanne Ussher : yes please

From Roberto : Right, the function of market makers other than p2p.

From Colin Drumm : if liquidity is sustaining the time interval then the network is a dealer!
From Colin Drumm : And it is bearing risk!
From Colin Drumm : the network has balance sheet risk that needs to be financed

From Leanne Ussher : So its backed by colin’s what?

From Claire : no accumulation?

From Colin Drumm : Just my credit I think

From Leanne Ussher : must be your reputation on producing marketable products
From Leanne Ussher : I don’t understand why the debts are negative on the balance sheet
From Leanne Ussher : unless the liability is being extinguished.
From Leanne Ussher : “A complementary currency"

From Colin Drumm : i think the negative signs shouldn’t be there

From Leanne Ussher : me too

From Eric Drasin : what happens when your stakeholders decide to short you?
From Eric Drasin : why is this a good idea?

From Leanne Ussher : so there is a smart contract that is “objective” that values the service
From Leanne Ussher : predetermined performance metric
From Leanne Ussher : what if it turns out to be “wrong”
From Leanne Ussher : you could put real contingent assets, or promises - ‘off balance’ sheet. So on the books.

From Eric Drasin : sorry, stupid question: when you use the word performance, you’re saying someone does what they say they’re going to do? they produce the product they promise? or is this something more complex?

From Leanne Ussher : this is what i understand

From Eric Drasin : what if someone bets against colin’s performance and decides it’s more profitable to kill him?

From Leanne Ussher : sold at what price. is that predetermined

From Colin Drumm : Sometimes I do make enemies

From Eric Drasin : the commodity token transcends the thing it initially represented?

From Leanne Ussher : Do you need the token to attend the class?

From Eric Drasin : all doggs go to heaven
From Eric Drasin : sort of like a hermetic notion of value
From Eric Drasin : all value becomes value on the network
From Eric Drasin : independent of its original source
From Eric Drasin : isn’t that what a non fungible token is?
From Eric Drasin : if you’re using an eric 721 they’re all interchangeable
From Eric Drasin : on a marketplace

From Leanne Ussher : but why does that token have value?
From Eric Drasin : *erc
From Eric Drasin : hype
From Eric Drasin : lol

From Leanne Ussher : Is it demanded by those who attended the workshops, and need to close out their account?

From Economic Space Agency : proposal farming => https://medium.com/axialabs/move-over-yield-farming-proposal-farming-has-arrived-d4942fd91c2

From Leanne Ussher : How is the commodity token valued?

From Colin Drumm : i understand less now than I did two weeks ago, I thought the commodity token was a ticket

From Eric Drasin : but look at crypto kitties
From Eric Drasin : trading cards can still have a secondary market

From Colin Drumm : Of course collectible EXIST but they aren’t a foundation for a new form of economy

From Eric Drasin : hahahahahahah
From Eric Drasin : crypto

From Leanne Ussher : It comes down to the value of the commodity token
From Leanne Ussher : it might be worth zero.
From Leanne Ussher : price and quantity

From Jonathan Beller : yes, but if the “recognition” was a platform token that could be sold on the market as a share of ECSA, we have a different scenario

From Colin Drumm : The only way it makes sense to me that commodity tokens are good for if they ARENT tickets is that if I collect them I have the power to generate more liquidity

From Jonathan Beller : right

From Leanne Ussher : I could set up a google sheet of accounts with the three agents.
From Leanne Ussher : https://docs.google.com/spreadsheets/d/1sMdKo-Sfp9BLLqLrZMmtU_O-YA2fe0TVmPZ1Y8kT-_c/edit#gid=0
From Leanne Ussher : I can work on this sheet