# SESSION 6: FEEDBACK + QUESTIONS ON TOKENS IN THE ECONOMIC SPACE PROTOCOL II

THURSDAY 11.6.2020 10amPST/1pmEST/7pmBERLIN/3amFriSYDNEY

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

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

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FEEDBACK & QUESTIONS SESSION:

We have really appreciated everyone’s feedback on the ECSA Economic paper – both in discussion during our sessions and in written comments. We are already doing some re-drafting in the light of comments – some small changes of emphasis, but also some issues being re-thought and rewritten. Sometimes it has been small comments that have triggered quite big re-thinks!

So in this session we are seeking more feedback on the Economic Paper thus far, is the point getting through, is it missing something, what would make it easier to understand? Also about the session format, has it worked? How could we do it better? Make it more interesting?

Specific questions about the tokens and their functioning would be very appreciated appreciated, as well about the concept of the "performance", but also more general feedback:

Do you have specific questions about the tokens: for example, why three tokens?
Do you see what we are after with the concept of the "performance"?
Do you get the ECSA vision, does it resonate with you?
What parts of the economic paper have surprised and/or pleased you so far?
Which are causing you to think differently?
Which parts have frustrated or annoyed you?
Which parts could be better explained?
Which parts of the analysis do you think have worked/haven’t worked?
Would illustrations be helpful, and if yes, of which processes especially?
Has the session format worked? How could we do it better?

We would highly appreciate if you could put your thoughts in writing - send them via [telegram](https://t.me/joinchat/IivZHxdMBb3PKtNDr5QdVg ) / email ([e-mail]) or just add in the [Feedback & Questions section here](https://hackmd.io/@ECSA/HJ-RJsihL) - and we would like our session on Thursday June 11, to go through the issues raised in your responses.

Thanks!

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READING:

A. Section 6: TOKENS IN THE ECONOMIC SPACE PROTOCOL

6 Tokens in the Economic Space Protocol
6.1 Token types
6.2 Unit of account
6.3 Commodity tokens
6.4 Liquidity tokens
6.5 Stake tokens
6.6 Exchanges between tokens
6.7 Why have 3 different tradable tokens?
6.8 Three circuits of value
6.8.1 The performance circuit: the
circuit of value creation
6.8.2 The collateral circuit: the
circuit of growth
6.8.3 The credit circuit: the circuit
of stability

B. The notes from the last week's session

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

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# [SESSION VIDEO: FEEDBACK & QUESTIONS](https://youtu.be/f-6XwejV-C4)

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# SESSION NOTES
Session 6:

Manuel: difficult to relate the concept, I felt that I couldnt tell them what I was going to tell them because that is approached on 7-8 chapters. Like others, I believe we need to develop an example.

Akseli: Let's start with the questions. Start with the political questions and aims, and then design problems.

First one: There seems to be a heavy emphasis on designing markets / designing the economic system, but little emphasis on the material conditions that constrain design of the economic system, and questions of power - is that so? Why is that?

Dick: It is a difficult question, it is partly because some audiences dont want to see political hand played too early, others want to look at politics upfront. In terms of general political vision, the feedback I've heard is that starting with native internet doesnt quite work in giving politics.

Other thing we need to work on is living in the spread. MOst people get the vision of a different world. But politics has to mean what does it mean to engage with ECSA while living in capitalist economy. How do we express that our politics is not about cult or commune- where once you go in, you cant go out. We need to position ourselves in a way for the people that do not live by design. I think the pape is not sufficiently explicit on that.

Having said that,There are some politics associated with our vision. We dont want to lock in one of those. Living in the spread is a political positon, not just a token position, it deserves development.

Jonathan: My position effectively is effects of racial capitalism come first. I would like to see that ECSA is designed to address historical inequalities of racial capitalism. I see it necessary intervention to complete certain attempts at revolutionary politics, decolonization because without redesigning the protocols of money, you get a re-sumption by particles of capitalism which has been fundamentally on thought for the most part.

So to me that makes a lot of sense of how to set it up. Not everybody agrees with me, but I feel like I would like to get some feedback on that.

Collin: I think it is worth throwing on table. George Floyd was murdered on the attempt of issuing his money.

Akseli: That's the capacity to issue, how does it change? Would it have helped George? and if, how?We do try to address it. In section 2 design principles, there is a lot of politics there. The equal access to the protocols is a key angle of our poltiics. We dont exactly know the political consequences, but we know that there are some significant ones.

Jorge: Money itself as most people relate to as appeals to things that they exchange to is really a user interface. I'm having trouble thinking of the protocols themselves helping Floyd as an individual because I
think that if we succeed in simplifying this protocol to the end-userm it won't be much different from how they are used to use money.

Difference is systemic. It would not show like how in this particular case this how George Floyd would have differed. I think it's more like how societies are mature as a whole is different. Having more access to liquidity, which means no need to counterfeit. So, my mind is going to exploring the systemic and social consequences of system working differently, not so much at the individual level. If we succeed, individuals wont notice much of a difference. For the most part, it is going to be, or has to be very familiar. All these modes of interoperativity in economic have already been internalized. That's where we need to meet them.

Jonathan: I'm really surprised recently because conversations I've heard you sort of wax poetic about the shifts when people could control their relationships to one another economically and have financial tools, which would allow for forms of issuance and recognition that are not possible today, and effectively enfranchise people that are disenfranchised by the current economic system. That transformation seems to be long term, but a qualitative one, not only people live life but experience with each other.

In long term, redefinition of protocols like money sos that people as agents equal in the network, I see prison abolition, anti-progress disappering, which all would mean confronting an issue like Floyd impossible.

Jorge: I'm met with challange in the sense that to get this economy run in long term requires a form of economic literacy that is not readily available.

So, in the long term, that's definitely where thigns are going as you describe. In short term, it would not be as simple as someone like Floyd can do this, and everything change. I think the change will be gradual. It is more like ongoing change and tracking this developing of a new eocnomic subjectivity. I always insist on the economic literacy- this is as important as the developing protocols because it is the other side of
interface.

Akseli: that relates to economic media as an angle framework to understand what we are doing. Systemic literacy, economic literacy in the medium is really the key. That's how we started studying Seroc's Park, they actually understood also that they are confronted with a new kind of a medium and they understand this personal computer computation programmable medium. They have to figure out what is it, what can you do with it. They have interesting useful conclusions about it. Literacy for example, teaching young kids to program, for him it was three things: first you teach them to read, then to write, then start creating digenerous, then you have a medium of creation. It is really a cultural question as much as technological.

Jonathan: IT also points to others creativity around basic protocl. Socail media in terms of literacy, my daughter uses punctuation as a martial art. She is not the only one, it is generational capacity. Economic imagination is completely stunted by existing finance capitalism protocls and our access to liquidit through wage. But once liquidity and debt issuancce is done on p2p basis, all this creativity is gonna flourish. I mean people are gonna come up with all these
different ways of actually remaking economy. I mean they're already doing it. I mean mutually all these different cooperatives, people are doing it, but they don't really have a computational substrate which is adequate to platform some of these relationships.

Felix: I think ECSA and white paper is political implicitly. Says that given system is actually super political, and politics in centralized monetary systems are not natural, and there could be other life. ECSA's proposals are political because you could go to differenet directions from there. Just opening up this decisions to the public is a political act. It could be strengthened in text maybe, but it is all there.

Akseli: Let's go to further questions.

Next two ones: How the new economy relates to the world / economy as it is today and how existing inequalities etc might be replicated in the new economy?

Re the claim that tokens ‘engage different exposures of moneyness to the social’ - what is the intention of doing this? Why does this need to be made explicit? It is an interesting intellectual point, but what is its function in relation to the operation of the economy?

Claire: I think it is interesting intellecutal point that AkSeli is engaging different exposures of money to the social But I dont understand why making it explicit is important for the function of systematic. It goes to making three different tokens, but that goes to structure of the token system. It is not clear to me why it is necesssary.

Akseli: For me, it means that this socail, or the different forms of coming together, cooperating, value forms, we can start to make them liquid. We can start to give them moneyness qualities that a moneyness has. That's really at the core of the politics too. Dick, do you remember where that is? (Section 6.7)

Dick: Let me ask, what do you find puzzling, or tell us why you raised this issue.

Claire: Why do we need to seperately identify three different tokens, I am not a money theorist, maybe that's just not landing for me. The idea that there are different social meanings with money, but for example, does that mean that it will prevent the tokens replicating some of the problematic functions of money as it exists now?

Dick: I know this is something that Collin should be speaking. But essentially, the reduction of the monetary social to a singular monetary measurement seems unncesary. It is possible to frame different moneys in different roles without the need to push them towards single unit of commensuration. If you have this option, why wouldnt you want to keep them, have differnt accounts of social without pushing them to a single point.

I think one of the critiques of profit and as an index
is not just that profit usually has an extractive logic, but the profit requires a singularity of measure, and that has real social consequences that we can avoid, we would like to avoid. By multiple tokens we are to some significant degree avoiding that, that channeling of everything into a single measure.

Collin: Can we calrify what's problematic about money?
There is various tradiitions about why money is bad. I found these less convincign. Like Jonathan. I'm very much concerned with theorizing finance and race. Problem with moeny is that black people pay higher interest rates.

Jonathan: to understand the existing money as organization for current inequality. How does it work? when you ask that, then you have to go to the protocl layers, systems of abstraction. People used to think like value abstraction on one side and race abstraction in a whole other set of categories, but there's a lot of work to bring those two things together
in really important ways, and looking social difference as one of the ways in which liquidity premiums are assessed effectively. You live in the global south, zipcode, things that change liqudity premium.

To push the political dimension of money.. Which is that it comes out of recognition of derivative structure of all social form. BEcause its impopssiblity of isolating it from market forces, which means that any kind of consolidation of resources is a position on the market. These are all sort of
substitutable choices in a Foucoult's sense, which creates some constellations of relation, which then have some kind of
relationship to the market in general.

The things is hat we dont really have control saturated on that, in the way accredited creditors can. They can bundle and parse our data, trade our relationshoip, but we dont have access to these tools. Democratizing access of those tools and changing the financial imagination, you actually empower people who are effectively disenfrenchised.

That Makes this moneyness thing a political space of intervention.

Akseli: That's kind of what we in introduction try to say. What counts as liquidity- value, who decides them is political, and if we can change them, awesome, even trying is worth it.

Dick: it's certainly not a critique of moneyness per se of progressive movements can invoke the Commons and peer-to-peer relationships without changing what the dominant form of money. So, I think inequality issue is one issue that certain people control money, and current money is therefore expression of politcal power. It is just not about one money, it is having multiple monies. That multiplicity is important to avoid reductionism of the social into a single measure.

Akseli: That's a good promt. I will ask a direct question then from Jorge. So what is a token in our system really?

Jorge: That's an improtant question because it often gets confused with how Bitcoin works. Tokens in our system is a contract. It is a relationshop between two agents. Liqudity token is for instance like IOU, similar but not same, me owes so much to other, where so much can be a unit of account or something else. IT is liability on one party and asset for counterparty.

In our system, tokens are in social relationship, and there is no one party privilged to define what token is. Everyone has. EVen in USD when you see it, it will very clearly reveal itself as a contract with the banking system. WE take it granted becasue we dont think of engaging in contract with this banking structure, but it is what that is. Contract reveals money as what it is, as contracts.

Akseli: Follow up question, then what is token issuance? When we talk about issuance we understand different things with Collin.

Jorge: So, I'm myself questioning if it is the right term. There is an operation, and there is a verb that refers to issuance .It is basically an act of exchagning liabilites and assets. There is no thing as I isuse something and now it is other. All issuance is a trade. What is interesting about these particular kind of cotnracts is they never unilaterally enter. They are agreed upon and exchanged. And the mecahanism by which these contracts are exchanged, they are mediated by offers. Exahgne liability for obligation, someone else also makes an offer. So people offer on one side, I want this asset in exchange for this liability, this liability in exchange for this obligation, and someone else also
makes an offer that may have the opposite position, and there's some matching algorithm, this is how markets work and how exchanges work, that says hey there's a match from this to that. This is the core mechanism by which people trade or exchange rights and liabilities, and that is the the level of abstraction from which we can sympathize money, liquidity, options, any sort of contract that has that structure.

Dikc: Just to clarify, issuance is different from offer.

JOrge: Issuance is the realziation of offer. Offer is the potential, description of what could happen if accepted. Issuance is the operation the stakes change, relation created after offer is matched.

We often talk about offers and acceptances, but what is interesting about markets and excahgne protocol is that offers accept each other. So the act of offering and accepting this is
simultaneously two sides of the same coin, depending on where you are right, so that's what the match does. Two offers accept each other. So, they request something and accept each other when they match. Matching encodes both, and it reveals that everything is a trade, including issuance.

Akseli: leanne is asking that are you calling bids offers?

Jorge: No. Offer is a genral sort of grammar. When I buy, sell, bid, I change the nature of what is being asked. Asked is what I am looking for, bid is the offering. Even though meaning of dictionaries make bid and offer seem similar. Technically, the implementation like in an exchange an offering is expression
of a potential exchange. Both bid and ask are important.

Leanne: In some dictionaries, offers are the ask.

Jorge: The conept offer with bid and ask is actually the preferred term that is utiilized by ontoology of exchange. When one encodes exhcange, distributed excahngoe protocl is modeled on exchange that is not central but on network.

Leanne: I'm pretty surein some exchange protocol textbooks they use offer as ask.

JOrge: I acutally dont know if that means. As long as we agree, it is enough.

Ben: I dont even know what a contract is. This is the exchange we are having right now. Dick and I started this. We cant define a contract. You have to be clear what you mean by them, but you dont have too much legal apparatus about them- bid ask already includes spread. It is not symmetrical. Some of them are very important for our notion of social derivateive. IT really comes with the play of interval .We are all trying to figure this out. But, the idea that somehow you have exchange that is matched accroos all these exchanges, and that's the starting point.

It's not the simple form of value, I mean this is what D.ick was saying. It is really the whole totality of matching,clearing and netting that puts the whole system, any single exchagne is an index of the whole system. What you are creating by these protocols is a different kind of a social imaginary moving in continous time.

That's actually is something pretty amazing, and it is also something that you could invest in. It is a structure for, Jonathna's point, the distribution of innovation. Anyway, Dick and I have been opening up this conversation just a couple days ago, we dont have anything to report on yet.

Akseli: Then one more follow up question. What is liquidity? In the sense that we are using it.

Jorge: Is the capacity of one thing to be converted into something else with minimal friction. You could masure liquidity by how long does it take offer to be matched, what is the capcity embedded in one kind of asset being transformed into another asset, which is implied in the offer. That is the definition of liquidty, something that can be measured.

Collin: I think that there is a conflation between two distcint things. One is liquidty, the other thing is negotiability. Liqudity is the ability to turn commodity into money, or vice versa. Negotiatbility is to turn one money into another money. I'm going to think more about this, but I think there is something there.

Dick:: for practical purposes, our conception of liqudity is smoothing of the ledger. We are not looking for macroeconomic notions of crisis avodiace, they may be the corrolary. IT is just can we get netting,celaring settling of ledger achieved even though there are no direct matches- every offer doesnt have acceptance directly. Can we indirectly facilitate these without loss of value?

Leanne: Some poeple describe liqudity, what is the most liquid is zero transaction cost. Where you have transaction cost building up, you are going to illuqid. Those costs can be search cost, anything that is inconvenient. That's one, then there is another saying liquidty as pornography. You know it when you see it, but it is hard to describe.

Akseli: What you mean by “recurring event” - why it has to be more than one event, in which you perform good or bad?

jorge: As concevied by the protocols, because protocls are unforgiving in clear defintiions. The event is anything that can be registered by the system. Anyhting that can be articulated in the code. BAsically anything that can happen in space and time that is recorded by the system and that enters the system is an event. Akseli saying a word is an event. Anything that happens in space and time that we can detect and we have programming words to express.

How does event relate to performance is that events have a grammar. You can express when this and this and that and that, this event. So there is a logical compostion towards event. Need to express a sequence.

Performance is when this and this happens, then that, then that happens, then a person is riding a bicycle. Because there is a sequential compostion to describe. Both lgocial and sequential compositon are necessatry components to express activity. If we want to value activity, an agent's activity, prerformance, we need to have both.

Akseli: Collin just posted the glossary terms.

Jorge: Settlement is a function of money. Settlement protocol= money.

Akseli: We have been talking with Jonathan, he is mentioning wiki, suggested that we should be working there. To put the definitions would be a great place.

We do have a from protocol perspective, list of word descriptions. List from the chat:
Liquidity
Negotiability
Contract
Spread
Derivativ
Bid
Ask
Offer
Accept
Token
Exchange
Denomination
Matching
Clearing
Index
Protocol
Event
Performance
Commodity
Record
Recourse
Stake
Collateral
Risk

With LEanne, we were talking about what is this realationship to mutual credit systems. Is it mutual credit systems even though we dont mention it? It is technically, but with a twist. What is the twist?

Dick: Few things to say. We are talking about mutual credit. But, this will apply not to mutual credit, we have some that we like, some that we dont like. One of the problems of communicating in this document is it's always good if you can make reference to something that we're like so long as the reader doesn't get
the sense that you're more like this- and then you want the reader to believe you here to not send people down in the wrong direction.

So, is there mutual issuance of credit? Yes, there is. Is there mutual issuance of debt? No, ther isnt. So what we mean by credit is different from how usually credit works. IT isnt about giving someone alone but enabling liqudity. Role of credit is facilitating offers and acceptances and netting and clearing. It isnt intedned to give people stream of funds to use by own discretion. That's the category we hold by stake. Object of this economy is not by moeny lending but mutual investing. Difference is important.The importance of its link to credit and liqudity is we are always saying that issuance of credit must always be backed by collateral. Collateral is found in definition of stake. You could use anyhting as collateral, but to buiold mutuality across the network and multi-dimensional mutuality was important to talk to stake. You can't frame credit in our system without saying the
emphasis is not on monetary debt but on mutual stake.

And the improtance of that is that stake is a long term shared commitment to a commong goal. Credit is just giving someone a line of funding that opens up the issue of what do I owe you in return. That's not the way of credit we are looking to build.

Leanne: When I asked that question, I was thinking in the local currency sense. There, they dont have interest rates, and they have a basis of reciprocity. So, you are supposed to clear your accounts on average over the long run. But you can always, if you dont have access, if you need to spend before you earn, then you can do so. So, where is the difference with that?

Jorge: So, theree is not much differnce functionally in the capcaity to spend before you have and accruing credit. Differences are more funcitonal. What defines the amount of credit that you get acces to, for instance, and how is that implemented?

Funnliy enough, this is how I entered this space. 20
years ago I was commissioned to build one of these systems and it was centralizing system and that blew my mind.

Then, I spent the rest of the upcoming years how to implement this protocol in a decentralized way. In mutual credit systems, there is a central agent that under their discretion issues a credit line. Technically, they are not celaring with each other, they clear with the central account. Everytime someone goes negative, it is registered in central account. Whe someone deposits, it is also registered in central account. You go postiive if only someone lese goes negative.

Problem is, many brokers give themselves a special kind of credit account, and they are not subject to clearing , and they are not transparent. That is the problem, there is nn o central privilaged agent in our system, in our every agent has the same capacity. The same way you go positive in your account, I go negative in my account.

Leanne: IF you look at Thomas Grecco's Beyond MOney website, wehre he has this potential contract for mutual credit system. He is kinda Hayekian free market guy, and he explicitly rules out that there is some central agent that has more power than anyone else. HE is also bolstered by the fact tha Sardec has been so succesful. The sardinian local curency.

He is very clear that everyone should have same access, although the limit is by collateral. His limit is potential sales, your credit is a friction of potential sales.

IT seems to me, if you take that by mutual credit, which for some people is the best protocol, it sounds very similar.
Except the fact that it is on centarlzied ledger ,and yours is decentralized ledger, and I think even decentralized pricing system.

Jroge: Judgement of creditworhiness is not done by one agent. It is up to every agent willing to take risk. The particaular aspect that you are speaking of is the same. We cannot use that term, because it is a loaded term.

I think there is more differeneces than similarities. Still, we can say this is similar to mutual credit system in these particular dimensions.

Leanne: I think there is a lot of people in that field that would be very into ECSA if they knew that this is like mutual credit but therte are these differences.

Akseli: Let's write that out.

Then there was two follow up questions.

Is it bills of exchange, but fancier?

Collin, what are bills of exchange?

Collin: A bill of exchange is a promise to payment for payment that is issued on corresponding partner at another geographic location. What happens is the bill gets issued is issued in AMsterdam and is payable in London. Four parties in exchange- the basic point is that bills of exchagne are negotiable because they are promises to pay at certain time and place. But whoever receives the bill doesn't have to go there, they can negotiate the bill by getting someone to accept it. They need counterparty to sign their name. That's how you evaluate it. They trade on discount. The face-nominal value of bill of exchagne is not the price that is going to trade when exchanged- it is discounted. This is what the Bank of England did, its earliest monetary policy was to discount bills in order to prevent credit crisis.

You are all about focusing on this issuance thing. My point to you, because it may not be the most important, the more important is if you can get people to accept other's issuance. I think you should focus more on the commodity token. It is actually the most interesting, the rest of is sort of like yes you can do it.

But commodity is the most exciting part, it is essentially a kickstarter. The problem with kickstartert is there is no evaluation. You say you're gonna do the stuff and maybe you do or don't, and a lot of Kickstarter projects fail.
Commodity token is not selling the commodity, is selling the commodity in the future. You can use selling the commodity token in order to fund the production of what you're doing. So you can raise capital without doing venture fundings.

Ben: I was just hoping that Dick and Jorge would actually give us an example , and explain the realtionship between a commodity token and liqudity token. I think that's the key to the whole model .I actually tried to understand not these things as contracts, but as contingent claims, which have contractual aspect to them. There are whole bunch of issues to them, we saw in MArx's failure to solve thsese problems in his money dialectic. I think we try to use distributed protocols to create a differnet way of dealing with that problem. I would like to know how they actually work, so that I can unfold the problem.

I've been waiting this for about a month now. I think we are getting closer, but it is this audience that it comes down to a basic way of thinking about money and exchagne as information. Money and info in HAyek side, it is money and exchange on MArx side. We are trying to solve these two aspects. So, if you could being to make that work, I aslo think that it will also deal with this problem of time.This issue of the interval, because of course all derivative claims have temporal interval.

Collin: With the bill of exchagne, the usury laws in the Catholic church, it is generaly thought to be all finances. In fact, the main goal of church was to prevent what they call dry exchange. How the Bills of exchange are set up is if you pretend like there is a time and space interval, when actually there isn't. So
actually you're both in the same city writing contracts to each other you, but you pretend like it's a legitimate bill of exchange , which has to have the interval, you can create money. And so it's essentially, as long as there is this interval, then the bill of exchange system doesn't actually create money. It's a pure netting system, but what happens is that you can actually use dry exchange in order to create new money by pretending that there's an interval where there isn't. And what happened with the bill of
exchange system is that the the Genoese and the Spanish came the Spanish ,Hapsburg teamed up in order to hack the bill of exchange system in order to fund the the Spanish Empire, and this is what
created the financial crisis of the 1570s.

If there is no interval, what you are doing is creating money that is inflationary. If there is the interval, then it doesn't.

Dick: What I do wanna say is feedback we are getting, much of it seems to centre on this issue. It is funny, I thought as we were debeloping this, the commodity token and commodity exhcange would be relatively starightforward.

But what happened is what makes our depictions of commodity exchagne different is what sets up the whole economy system of ours.

So this specific issue about commodity token and system of exchagne, is where most of the concerns need to be addressed, that is the time interval, the explaining in simple terms of the logic of offers and aceptances, that this is where fiat enters the economic space protocol because fiat comes in as a commodity, that while we're talking about a token system all the time at every and every link in the chain fiat is also a presence inside this system, but it doesn't come in as money. It comes in as a commodity to be exchanged against other asset.

So, all the way through the system there are exchange rates and spreads. And we have been silent on that issue. That gets us back to unit of account. All I want to say is that this suprised me intially. and now I see that this is the big axis in the explanation. It needs adressing, and I feel confident that we can express it clearly.

Jorge: From a programmer perspective, commodity token assuming as anything, what is interesting about it is it can be anything even a future event performance. A lot of tokens we are using emphasize performances. A token is a promise to deliver soemething else. It has expiration date, an underlying, that which is going to be delivered. Very much in the sense of commodity markets. It is just a generalization that applies to anything, like massage, gadget at amazon. What is improtant is that the commodity tracks the delivering. And, given that delivery tarcking is programmable, we can add a lot of nuances there. You can track like whether the item is returened, whether it is deliveree to adress, token is not only the received receipt but also a subtracting device that allows us to trac k the life cycle. If it is a performance, it means there is a lot information to be gathered from its life cycle. Also advocated of circular economy proposing, tracking life cycle of commodities.

I think that by having that abstraction,the commodity token where that ocucres, becomes a desing space. What does it reprsent, how it is tracked, what information does it capture.

It can represent the future things too.

Dick: I love it if everyone wrote in about what you think a commodity token needs to say. I see people saying they understand logic of ECSA, but there are holes in there and there .Commodity token seems to be one of the holes. What do you imagine it has to be in order for you to get form one point of anlaysis to the next? What do you think it needs to be, not that we in response will change the way it is, but it will impact how we communicate it. So many issues converge on commodity token and simple act of exchange, so feedback would be valuable.

Collin: it makes more obvious why I want to participate in this syetme rather nthan why I want to hold this money that cant buy me money. IF you start with commodiity otken, you can say look it is kickstarter, you dont have to be consumer but an investor. You dont have to consume it, you can invest. The value of the project flows, and it is mediated by the market. I can sell these commodity tokens for dollars. I bought this commodity token,I dont have to hold it to maturity, but there is markets means you solved the kickstarter problem. Then that is immediately interfaeble with the dollar system.

Akseli: I think that's a really good point. We are replacing the Silicon valley startup model. That you have to have this centralized company, find funding, and we replace that model with new way of starting things. We turn it into not only a coin but an enitre economic space, where you can design how relations work there.

That is what acutally is opening up here.

Ben: Is it just an index of a deliverable?

Collin: yes

ben: Therefore it can be exchanged. IT can be bought and sold. Because it has both an informational, and it gives you rights to that deliverable.

Collin: It also maybe helps, the question wiht liquaditing stake and getting dollar, but commodity tokens sold into dollars solves the problem. Even if everybody dont participate in the system, they reperesnt the deliverable so they can be converted into dollarx.

Jorge: What I noted about the creative aspect, which led to run, it wasnt obvious what initaites creation of credit is the transaction for a commodity. When it is clear, that it
is the commodities that to bring forward the necessity of either clear or create credit, it becomes more obivous that credit there just serves the temproal gap of exchange of the commodity. So, having more to the advocaton of putting commodity there.

Another thing, informational commodities. That is another aspect that further validates what is currently not valued. Performance represent in environemnt, care, things that we care about. We havent talked much about that.

Dick: Except, what we want to say is the conventional notion of commodity, the commoiry that we get out of Marx is always a physical commodity, which is historically specific. Its pshyicality means it has direct expression in the abstract labor time.

When you frame information, and things with where the value is difficult to connect to value of labor time in this creation because returns of scale are massive, then we've got to
think about commodities that are themselves bundles of yet to be
specified information, or information of yet to be specified meaning because that meaning only comes into being as a performance. That's when it becomes a commodity in the system, when a bundle of information becomes expressible as a performance.
So, We gota be open to that framing of commodity, which is differnt from standard notions of commodity of exchange.

Akseli: Time is about to be up. There is really interesting questions that Felix was raising about performance and relations of stake.

One key conlcusion of the feedback is that illustrations and examples are a must. We need to get them there.

BEn: Jorge said something interesting about perforamnces because commodity exchange you have with CMC in MARx. You hand it to a mediator that is self liquidating. Each time interavl is discreet. With this protocol, you can track their history, create a story out of them, a narration. That's where information commodity comes, it comes out of unfolding of the commodity in time. That is something not caputqaed by Marx's analaysis beacause of CMC, that nature of mediation.

Performances are interseting, in order to understand it you need a history. Kickstarter is precisely narratives that attract people, but we dont have a way of investing in these peoples in a way.

Schiller's new book is about how economics are narratives of histories. You have to create a narrative history more and more because it gives retrospective meaning, it gives this kind of
retrospective performativity.

Dick: BEcause time is coming to an end, there is an issue that Akseli raised. That turns to stake. A few poeple mentioned puzzlement about why would you acquire a stake, what to gain from that. My take: the return to stake is all on the growth side, the return to stake is value of stake grows and other people want to acquire. It doesnt give you lifelong dividend in the stream, as long as it rises in value and plateaus , there are other stakes that are rising. We want new performances to be emerging, not old performances to rule. If you are an investor looking for profit, you would be looking around newly emergent perfromances to see what is emergent. There is no dividend coming out of holding a stake. There is simply writing the valuation of stake as it emerges socially into prevalence.

I would say, it is not just because it is hard to contrive an income stream on a stake but also it is positively undesirable. People cant sitback by holding succesful stakes early on. That doesn't work anymore. Some poeple would say this is just about guessing what you think is valuable, there is element in it, but we are talking about social mechnaisms of market preferences expressed through stake buying and selling. WE are actually capturing the formation of what does matter, which is different from stock trader saying hey I think this will be valued by others so I will buy this. This is actually specifying what the underlying is specifying, what the value metrics are, not just noting positions on speculative bubbles.

Ben: I hate to keep on going back to the same point. It kinda rethinks of relative surplus value, is technological innovation, dynamic of capitalism. The absolute surplus value is not. IF you think that you move from abstarct labor time to information with a qualitative dimension, you kind of redoing the parameters of relative surplus value, which is by introducing information component, you put Hayek into MARx. I am just saying that there is osmething very peculiar about the trajectory you are going. IT is very intreguing that you not treat investment as a store of wealth. You say that's not the way that game is played.That is of course assumed to be the motivation that you would accumualte surplus value.

Dick: If that's the game you want to play, you can play. The way you reveal wealth is if you sell your stake.

Ben: You have to go outside the system. I have to think about that.

Akseli: which specific things would be beneficial to illustrate. Balance sheets would be important. We already started adding them.

Ben has been asking also how does starting with commodity token play up. That would also be a beneficial example.

BEn: that is going off Collin's comment. You start with the commodity token, and all is manifestation and how it works is, as it builds up the system, then you go to liquidity and stake tokens, unfolding.

In matching, you have a very radical alternative to Marx, and surplus value. That would be immediatly apparent. That would aslo make people Marxist inclned to see what a distributed protocol's capabilities could be. It allows matching, creating the totality. Exchange is the instance of a larger totality of interchangable exchanges. That's also how you get a unit of account, because if you have quantitative determinations of the things that
exchange, you can find a virtual numeraire.

Dick: FElix is drawing my depiction of returns on stake to bounding curves in common stack. Make sure we come back to that in the early session.

Akseli: Two things, I was hoping that people weere expresing how we run this.
IF there would be suggestions about how to run it better?

We would like to have a two week break in order to incorporate some of this stuff in, then have three sessions starting on July 2.

Dick: There is the need for rewriting the earlier sections. I do want to say that the way we need rethink and rewrite will have repercussions for what comes next.

End of session

**Zoom Chat:**

From Economic Space Agency : https://hackmd.io/brQHz3AyTnC8TXJV7BjToA?both

From Jorge : I think you might have quite a bit to say about this Jonathan, so feel free to jump in.

From Leanne Ussher : I like the way you just phrased it Akseli. There is very little spoken about the conditions and I think a discussion on scarcity might be useful.
From Leanne Ussher : Show how we are no longer in a world where scarcity is dominant
From Leanne Ussher : So Design and architecture is more important.
From Leanne Ussher : What does living in the spread mean?

From Manuel Flores-Arguelles : Also important: having the paper allude to the role that private banks have in credit creation (i.e. credit creation theory of banking) effectively producing the majority of the money supply, would also help persuade readers of the viability of people creating their own credit (under the appropriate protocol-mediated rules & regulations).

From Dick Bryan : sorry Re living in the spread . in both capitalism and the new economic space concurrently

From Economic Space Agency : here is the summary of the questions/feedback i am going to follow:
From Economic Space Agency : 1 general politics and aims and design principles (from easy to hard core: would a capacity to issuance have helped George Floyd? How?)
2 what is a "token", what is "issuance", what is "liquidity"?
3 is this mutual credit system, is this like bills of exchange?
4 is this balance sheets
5 how is staking and performing relatedB) IDEAS ABOUT ILLUSTRATIONS
C) DEVELOPING SESSION FORMAT => ECONOMIC MEDIA
D) NEXT SESSIONS
-two week break
-2.7. Volatility & stability
-9.7. ECSA index/token & governance
-16.7. Big put

From Oliviero Di Lanzo : I think that nobody else than ourself knows better about our material constraints and how they affect us. If ECSA is talking about a design space doesn’t mean that ECSA designs this space. It means to empower communities to design the space around the constraints they know best. This is very effective in working between Capitalism and Postcapitalism.

From Leanne Ussher : Isn’t there a limit to the amount of liquidity one can issue. Are there not boundary conditions that become constraining.
From Leanne Ussher : ?

From Jorge : There must be. Can you voice this Leanne?

From Leanne Ussher : These boundary conditions can still create inequalities.

From felix : of course

From Leanne Ussher : I feel like having 3 separate tokens is like instituting capital controls, and separating markets.

From Colin Drumm : yes.

From felix : roughly speaking, the more collateral you own the more liquidity will be issued to you as far as I understand it

From Jorge : Where the preferred collateral form is, stake on others.

From Leanne Ussher : To avoid the law of one price, and then be dominated by one market.
From Leanne Ussher : It would seem that under a periphery-center analysis, remove capital controls means that capital is sucked into the center, and the fringes are abandoned. So stopping this from happening by setting up separate markets is a way to avoid this, and avoid centralization of power and wealth.
From Leanne Ussher : I would say issuance is the writing of the contract. Writing the IOU.
From Leanne Ussher : This IOU is then sold in exchange for something else.

From Colin Drumm : It all comes back to the mundell trilemma! You can have only 2 of 1) free flow of capital 2) price stability 3) independent fiscal policy. The current regime falls on the horn of giving up (3).

From Leanne Ussher : Jorge, are you also calling “bids” “offers”
From Leanne Ussher : are these not different.

From Colin Drumm : he’s using “offer” and “accept” to say what I would call “making” or “taking” a price
From Colin Drumm : I think

From Jonathan Beller : sorry everyone, I have to run here. Really wish I could here the rest but will watch the recording. Hope we can crack the code!

From Leanne Ussher : Some economists define liquidity as “zero transaction cost”
From Leanne Ussher : like the most liquid thing is zero transaction cost. search costs, bid-ask spread, time, etc

From Colin Drumm : yes. Well, I think more generally, liquidity is the reciprocal of the bid ask spread in some asset

From Leanne Ussher : yes
From Leanne Ussher : Is this at all taken from REA Accounting? Or do they just have similar roots.
From Colin Drumm : Liquidity
Negotiability
Contract
Spread
Derivative
Bid
Ask
Offer
Accept
Token
Exchange
Denomination
Matching
Clearing
Index
Protocol
Event
Performance
Commodity
Record
Recourse
Stake
Collateral
Risk

From Jorge : Settlement

From Colin Drumm : Evaluation
Float

From Jorge : Agent
From Jorge : Network

From Economic Space Agency : Agency

From Jorge : meet.google.com/zox-jgsq-ufa
From Jorge : Disregard last message
From Jorge : “Space” << add term.

From Colin Drumm : Centralized
Distributed
Account
Broker
Privilege
Capacity
Asset
Liability

From Jorge : Right
From Jorge : Credit
From Jorge : Debit
From Jorge : Stake

From Leanne Ussher : This was Hyman Minsky’s quote: “Everyone can create money; the problem is to get it accepted“.

From Colin Drumm : exactly

From Leanne Ussher : Isn’t the bill of exchange dependent on the trusted third parties.

From Colin Drumm : yes
From Colin Drumm : Correspondent banker networks
From Colin Drumm : that’s why they have to be countersigned

From Leanne Ussher : Without the third parties you can’t print money.

From Colin Drumm : Yep you need the network to exist to make it work

From Leanne Ussher : But here, there should still be idiosyncratic risk, of the issuer.

From Colin Drumm : bills of exchange do bear idiosyncratic risk
From Colin Drumm : That’s why they are discounted based on the reputation of the chain of signatories

From Jorge : What does it mean: “idiosyncratic risk”

From Leanne Ussher : I don’t know if there is mutual clearing or bilateral clearing.
From Leanne Ussher : counterparty risk

From Colin Drumm : idiosyncratic risk = risk deriving from the specific identity of the counterparty
From Colin Drumm : yeah

From Leanne Ussher : peculiar to the collateral of the issuer.

From Jorge : ah

From Leanne Ussher : bills of exchange remove this collateral risk

From Colin Drumm : This is the book to read:
From Colin Drumm : Boyer-Xambeau, Marie Thèrése, Ghislain Deleplace, and Lucien Gillard. Private Money and Public Currencies: The Sixteenth Century Challenge. Translated by Azizeh Azodi. Armonk: M.E. Sharpe, 1994.

Jorge : PDF?

From Economic Space Agency : yeah loading up

From Leanne Ussher : does every commodity token have a risk premium

From Economic Space Agency : re kickstarter:

From Leanne Ussher : based on the individual’s performance and likelihood of default

From Economic Space Agency : We will replace the Silicon-Valley-VC-Startup model of “starting-up” with a new democratic economic media (creation of economic space). Fundamentally our wager is that this will also bring the users to the media, because it is economically better for them (it is a better “economic space”). So instead of launching a start-up with a product and having to “make money”, we introduce a new design pattern for “starting up”. The launching one’s own token (ICO-model) was already pointing toward this direction, and hence its huge popularity, but it was still clumsy and heavy as you basically had to develop your whole stack for it (it had other problems too; but it was an important signal of what drives people)

From Leanne Ussher : So commodity tokens are speculative assets

From Economic Space Agency : Instead: we introduce a new medium, a platform, where these kinds of “economic apps” can be developed (expanding from a mere “coin” to a “space” of coming together, of opening joint opportunities, of sharing the risks and rewards of that). It is a new medium for a distributed way to produce value, to organize, to share risks which obsolites the “VC-start-up model” which always requires the centralized agent that controls and extracts all the value.

From Economic Space Agency : Economic media is a platform for launching the next generation collective starting-ups (collective projects with a purpose, networks with consequences) which we call economic applications (economic networks, economic spaces). It is like launching the Silicon Valley favorite “risk generating practice” but without the central agent, the central owners and controllers, i.e., as a distributed network where the risks and returns are distributed to all participants according to their performances. We aim to replace the “start-up” as the funding and governance mechanism and thus the Silicon Valley value extraction machinery (misclassify, exploit, underpay - private agents seeking private gain) and implements “starting-up” in a reconfigured way.

From Economic Space Agency : still want to quickly go through:
From Economic Space Agency : B) IDEAS ABOUT ILLUSTRATIONS
C) DEVELOPING SESSION FORMAT => ECONOMIC MEDIA
D) NEXT SESSIONS
-two week break
-2.7. Volatility & stability
-9.7. ECSA index/token & governance
-16.7. Big put

From felix : my mike is dead. will write:
this persepective on staking is really clsoe to the Commons stack's use of Bonding curves as issuers of memetic derivatives

From Leanne Ussher : sounds good

From felix : but if the Price of a stake is purely determined by market.. why would anyone buy into well-Performing stake at all? where would Price increases come from?

From Leanne Ussher : It is an exciting project