3. Governance Protocols of Proof-of-Value
As mentioned earlier, within DAism's Proof-of-Value (PoV), there are seven major governance protocols：
Smart Commons' Hardcore Protocol
Decentralized Minting Protocol
Protocol of Decentralized Autonomous Foundation
Protocol of Valuation Token's Supply
Protocol of Unit Token
Protocol of Decentralized Exchange
Protocol of Universal Payment
Smart Commons' Hardcore Protocol
This protocol defines the basic information for a Smart Common such as its ID, name in English, logo image(in SVG format, recommended file size less than 6k), description(it can be a slogan), date of establishment, team members(in ETH address, anonymous), version, contract address of dApp, proprietary valuation token's name, abbreviation, and sign, etc.
When setting up a smart common, the creator has the option to manually add some addresses to the smart common as its initial members.
This protocol also includes an important rule for the upgrade of smart commons: its dApp must be reliable, which means its dApp can not be modified by anyone once deployed. If you know what Smart Contract Composability is, you definitely know how important this rule is. Technically, Proxy Pattern is a suicide way for almost any smart common. If you find there's a bug in your dApp, fix it and deploy it as a new dApp to Ethereum and then, go back to DAism to mint it as a new version of your smart common. So, Data Separation might be the best strategy for your dApps' development, and Contract Migration might be workable as well. Read this article if you need some help to understand dApp upgrade.
Decentralized Minting Protocol
Minting is a type of interaction between contracts and is the most fundamental action between smart contracts. DAism adopts a minimalist decentralized authentication method for creating smart commons. The creation of a smart common begins with a Minting request from a smart contract at a specific contract address, and is unrelated to any other "popular" DID solutions. The Minting protocol can prove which smart contract a smart common originates from, and this smart contract can let everyone know its function or purpose. The mechanism is very simple and absolutely authentic and reliable. This is the only way to create a smart common, and it can also serve as the genesis evidence of the smart common, resolving the issue of the association between the true information about the smart contract that the intelligent entity and its issued tokens and products (such as DApps) are based on.
At the same time, there's a sub-protocol in this protocol, which is a Smart Commons Protocol, meaning that the Minting operation announces that a dApp (a combination of certain smart contracts) has become a Public Good. We then call this dApp as a Smart Common, which is under the governance of DAism.
SC0 v0.1
Minting a Smart Common with a dApp under this protocol signifies that the dApp accepts this agreement as its exclusive protocol and acknowledges the anonymity of its owners or developers or managers. Due to this anonymity, no one can prove ownership of any rights, nor can anyone prove the assumption of any responsibilities.
Under the governance of DAism
No Copyright Anonymity implies that the developed dApp entirely contributes to the public domain, becoming part of Smart Commons. Apart from being able to enjoy rewards brought by Proof-of-Value, it completely relinquishes all other rights, including all associated and adjacent rights.
No Liability Anonymity means that no one in this world makes any warranties about a dApp and its exclusive valuation tokens, no one assumes any joint liability. When using or calling the dApp, or investing in the smart common's exclusive valuation tokens, no one may imply endorsement by the smart common or anyone related to the smart common.
Protocol of Decentralized Autonomous Fund
The Proof-of-Value (PoV) consensus of DAism provides rewards for every valuable smart common. Each smart common also has a minimalist decentralized autonomous fund (DAF), which can adjust the distribution of rewards. This includes determining the respective percentage allocated to each account.
Protocol of Valuation Token's Supply
Any smart common can issue its exclusive valuation token. The primary function of valuation token is to engage investors in the assessment of the value of dApps and provide incentives for the consensus proof-of-value.
This protocol defines valuation token's name, symbol, logo, supply, price, etc.
This protocol is one of the key protocols of the IADD network. Every smart common that issues a valuation token follows the rules below:
Token Standard adopted: EIP-3712 (developed by DAism's core team).
All the supply should be directly issued to the liquidity of IADD network. The smart common that issues its valuation token has no reserves. This is a specially designed rule that prevents the smart common from colluding with "whales" to manipulate the market. Therefore, this protocol fundamentally revolutionizes the longstanding irrational token market supply in the blockchain markets.
Uniform issuance: Total supply of 1,000,000,000 tokens, with an issuance price of 0.000000000000000000 vita.
Protocol of Unit Token
The purpose of this protocol is to establish a Price Unit System!
The unit token(or uToken) is a native token forged through Ether(ETH). In DAism's IADD Network (Decentralized Valuation, Decentralized Exchange and Decentralized Payment 3-in-1 network), it utilizes a constant product formula to price all valuation tokens.
This is a core innovation of DAism.
uToken is forged through ETH, meaning the pricing token has a unique issuance mechanism. uToken can be understood as a variant of ETH, deriving its value from Ethereum. uToken is also a core element of the IADD Network. The composition of trading pairs are uToken and valuation tokens of smart commons.
uToken is a highly unique token. It is defined by DAism as a price prototype, where 1 uToken is equal to 1 vita. Similar to the unit of mass in the well-known International System of Units, DAism has a set of price units for calculating the prices of valuation tokens, with vita serving as the fundamental unit of token prices.
In DAism every token is priced based on the algorithm CPMM (constant product market maker, or constant product formula) and is priced with a base unit "vita".
Vita is the base unit of any valuation token's price. uToken serves as the price prototype in IADD Network. Its price is denominated in vita, which means that whenever there is a valuation token exchange or payment, the pricing is consistently denominated in vita as the fundamental unit. For payments within tokenomics, the prices of all products and services are also quoted in vita. For instance: 1 ISM = 0.01 vita
The price of a product: 0.5 vita/kg
The price for a service: 200 vita/hr
uToken is a groundbreaking pricing token in DAism's unique price system(Unit of Price). It significantly reduces the complexity of valuation token applications and aligns seamlessly with the requirements of decentralized markets and universal payment(settlement).
Why is an Ether(ETH) variant necessary?
ETH has missed the opportunity to serve as a price prototype, as its value has been overshadowed by the legal tender of the United States. Everytime when the market turn to bear, some miners have to quit just because ETH's price dropped dramatically. When the market goes bear, there're always some miners compelled to exit due to the substantial and sudden drop in the price of ETH.
The issuance strategy employed by ETH is not conducive to rapid market expansion, which often requires a substantial increase in number within a short timeframe.
Ether (ETH) stands as the native cryptocurrency of the Ethereum blockchain, distinct from tokens issued by smart contracts. This means it doesn't adhere to ERC-20 or any other token standards and must typically be minted into WETH, an ERC-20 token, before used by a dApp. To address this, the optimal strategy for creating a variant is through forging.
In the tokenomics of DAism, as a price prototype, uToken's price is solid. This makes it an ideal token for investment settlements or daily payments, similar to the everyday use of fiat currency.
Unlike some other tokens, uToken cannot be arbitrarily issued; it requires a tangible value source. Additionally, its issuance must follow a decentralized approach to maintain its integrity.
Unit of Price
In Protocol of Unit Token, the basic unit of price is vita, and the prototype of vita is uToken, which means that the price of a uToken is defined as 1 vita. The issuance mechanism of uToken is named as ETH Forge. and uToken's precision is 18 bits, which means that attovita (10^-18vita) is the smallest denomination of price.
Name: Unit Token
Abbr: UTO
Sign:
Basic Unit: vita
1 vita = 100 cent
Units:
Motivation
First, let's review the related points from some protocols:
All valuation tokens of each smart common are entirely issued to the IADD Network. What sets this approach apart from the commonly initial coin offering is that the development team is not responsible for the issuance of valuation tokens, and they do not receive any allocation of valuation tokens. This eliminates the possibility of dApp development teams exploiting valuation tokens to manipulate the market!
With all valuation tokens of each smart common issued to the IADD Network, the prices of all kind of valuation tokens can genuinely reflect the market's real value assessment.
The International System of Units (French: Système International d'Unités, abbreviated as SI) is the most widely adopted standard system of measurement globally. For example, in 1793, the definition of weight (later changed to mass) was based on the weight of pure water at its freezing point with a volume of one cubic decimeter. It can be seen that the unit of weight is defined by a reference object (standard). With the introduction of the mass standard and its base unit, the weight (mass) of all things can be calculated through algorithms of a scale. uToken serves as the pricing prototype and vita is the basic unit of price.
The IADD Network adopts the algorithm of Uniswap (Constant Product Formula), but it calculates the prices of valuation tokens using uToken instead of ETH.
ETH Forging Protocol: This is a sub-protocol. Through the destruction of ETH, the unit of account token is issued, making it a variant of ETH. The unit of account token is not generated out of thin air but is issued through the transfer of ETH value. This is a decentralized forging model, as users have the autonomy to decide when and how much forging to undertake.
The initiation of the DAism forging contract signifies the first instance where Ethereum's homogeneous tokens have their independent decentralized pricing mechanism. It also heralds the end of an era where centralized exchanges dominate and exploit tokenomics.
Another crucial application area for uToken is decentralized settlement. As the prices of all other tokens fluctuate and cannot be stably held by consumers for everyday spending or investment exits, uToken, with its constant price (1 uToken ≡ 1 VITA), qualifies as the universal payment token (or settlement token) within the DAism's tokenomics.
The demand for blockchain payments is growing as tokenomics develops. Since we cannot currently calculate the future size of this demand for a specific period, there is a need for a universally used payment token with theoretically unlimited issuance. Moreover, it also needs to be supplemented by liquidity pools that can be adjusted in both directions according to demand.
This is a solution aimed at completely dismantling the interference and disruption caused by centralized exchanges in decentralized markets. It is also a solution for tokenomics settlement.
Mechanism of ETH FORGING
This section requires you to understand Uniswap's constant product formula(automated market maker algorithm) in advance. Please refer to the following information for details.
Hayden Adams. 2018：https://hackmd.io/@477aQ9OrQTCbVR3fq1Qzxg/HJ9jLsfTz?type=view.
And the discussion initiated by vitalik Buterin: Improving front running resistance of x*y=k market makers
This protocol will adopt the ETH forging model, issuing uToken with the current USD price of ETH as a reference. Its issuance mechanism is quite unique:
Forging Initialization Upon protocol activation (i.e., when the contract is enabled), the algorithm initializes based on the defined price for each uToken, specifically 1 vita, and the historical highest price of ETH (currently $4870 USD). This means that 1 ETH can forge 4870 uTokens based on the current price record.
Algorithm( Imporved Constant Product) provides forging rewards
Initialization of K Value:
We will use the total ETH burned as of November 30, 2022, under EIP-1559, as the initialized total ETH. I observed 2,750,240 ETH burned (https://etherchain.org/burn) on November 30, 2022, at 00:00 Hong Kong time, with a value of $3,320,364,758 USD, representing the global user's loss, we assume that these ETH have entered the forging pool.
Simultaneously, we will use the product of these two meaningful data points as the K value for the early bird reward algorithm: K = (2750240 *3320364758)= 9,131,799,972,041,920 ≈ $9.1318e+15
Rewards Formula X * Y = $9.1318e+15
Forge Base In the second year following the innovation of the highest ETH price (assuming it is V2, with the previous highest price being V1), the number of uTokens that can be forged with 1 ETH is adjusted to the value of this new highest price (i.e., V2). All historical forgers will receive forging compensation equal to (V2 - V1). When the forged ETH reaches 60% of its total amount, the exchange base will no longer increase. Or when the ETH price reaches $487,000, the exchange base (487,000) will no longer increase. This is a price fuse mechanism with the external market.
Protocol of Decentralized Exchange
This protocol governs the exchange of valuation tokens.
Still employs Bancor's innovative Automated Market Maker (AMM) The price discovery mechanism is similar to Bancor Network. The IADD Network serves as DAism's universal decentralized exchange and payment network, consisting of uToken as the price prototype (pricing token), smart common-specific valuation tokens, constant product formula, and smart contracts.
Through the collaborative Protocol of Valuation Token Supply, smart contracts autonomously manage liquidity pools algorithmically, eliminating the need for human involvement.
When any valuation token is exchanged on the IADD Network, a transaction fee (0.2%) is rewarded as a bonus to the respective smart common's developers.
Protocol of Universal Payment
This protocol works closely with the Protocol of Decentralized Autonomous Fund, Protocol of Unit Token, and Protocol of Decentralized Exchange.
Vita is the fundamental unit of price in DAism's consensus. All prices for products and services are quoted in vita.
When realizing investment, or purchasing products or services, automatic conversion of different tokens is facilitated through the IADD Network. And uToken serves perfectly as the settlement token for investment and merchants. Rewards for smart commons' developers are settled by UTO.
Governance-Related Technical Discoveries
EIP-2569: A Standard for Saving Images Onchain
Our proposed standard for saving images onchain has great significance
In order to better implement Token of Honor, we proposed an Ethereum standard EIP-2569(Saving and Displaying Image Onchain for Universal Tokens)
This standard paves the way for exploring more possibilities of saving images onchain.
Token of Honor
Token of Honor serves as a record and recognition tool, serving as a crucial incentive for smart common's development.
Its applications are extensive, including:
Honor medals, commemorative tokens, badges, certificates, etc., in the blockchain domain.
Collectible in-game items with intrinsic value—Honor Tokens are entirely stored on-chain, including images.
Here is a simple Token of Honor exchange that we have developed:
Here are 2 demos on Ropsten test network：
UI Standard & Protocols
To facilitate the development of third-party dApps for the DAism application layer, we plan to provide UI standards as well. Contributions from third parties are also welcome.
Currently, confirmed third-party protocols in use include the Monkey King Protocol and ActivityPub.
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