The concept of Resolve tokens, “Resolves” was introduced in the Cyber Republic’s last weekly update. Resolves are released from a smart contract. They fund the development of the ecosystem. The best feature of Resolves are their fair distribution; this makes them the perfect tool for voting. Since they carry inherent value from their ability to collect fees in the core contract, staking Resolves is meaningful so that participants can be rewarded. For example; staking in a sidechain to receive transaction fees, or staking votes in a project management DAO to receive a percentage of the product’s success.
When considering the idea of simply staking Resolves back into the contract, something didn’t feel quite right to me. There’s no reason to not stake the Resolves if any extension of the ecosystem could just do that for you. This means that every Resolve would be staked and eventually the dividend rewards would be too small to be significant. There needed to be a mechanism that incentivized Resolves to be staked elsewhere. The only feasible way was a burning process associated with Resolves, only possible if the core contract is the only system doing the burning.
Burning Resolves on transactions would only encourage mediating services to manage Resolve balances rather than transfer them, so there needs to be a way to dissolve tokens within the contract over time.
At first I thought there needed to be some complex math associated with keeping track of when Resolves were staked and when new ones were imported. Trying to address “time” with a variable was the mistake. First, it introduces a new arbitrary configuration into the smart contract. Hard coded configurations have a hard time adapting to an ever changing market. Using Resolves to vote on dissolve time has incentive issues and programmatic ones.
Time is still a very important variable though, because Resolves over time needed to go through a life cycle so that new holders have a reasonable chance of making gains against Resolves that were staked prior to them. So the solution was simple: When dividends are withdrawn from the contract, the percentage of ELA that is withdrawn is the percent of Resolves that need to be burned. From this emerges the gradual burning of tokens within the contract. It’s possible that someone could hold their resolves in the contract forever, but you’d never be able to withdraw any ELA. On a large scale, the token dissolve rate would line up with the overall health of the economy.
Without the above solution, pursuing development didn’t feel right. A fee is necessary to protect the minting of Resolves but other equations for dynamic fees are not appropriate for how the ecosystem would evolve and a hard coded fee, as stated before, is an arbitrary configuration that can’t adapt to market needs.
With this solution, code can start being written for a miniature test economy. Extensions of this economy needed to make sense. A project management DAO contract is relatively simple, but not simple enough to code in a week without assuring all bases are covered.
Using Resolves to stake or purchase advertising real-estate would require greater adoption. Using Resolves as the token for staking a sidechain would also be too heavy of an endeavor to pursue. So what is the base requirement for an extension that makes sense?
We’ve come back to our original point.
Theoretically, Resolves are well distributed among participants. This makes them perfect for voting. So whatever we come up with has to leverage the opportunity of this interest-derived democracy. But people need something to vote on, something of value and something that could survive the hype cycle. For our test environment, non-fungible items (not quite tokens) for games would allow any game service to access the abilities of an item from the blockchain and incentivize using its Resolve-based stats. Resolves could be used to crowdsource 2D & 3D models for the same item, different versions of the item, or any infinite amount of data gamers would want to associate with an object. These item tokens could also be stored in an NFT for further composable token capabilities.
This platform would be simple. Collectively, users could define item types, contracts to determine how an item is minted, attribute types and a list of attributes associated with an item type. Most of the time a majority vote would dictate if an item or attribute type is available or exists at all. A majority vote could also control the minting contract for the item token.
The value of attributes may need to be determined by weighted votes or a majority vote. The data structure can be a true or false boolean value, a value within a numeric range, a string of characters, or a pointer to a contract that stores more complex definitions.
This application would solidify the exchange of fairly created and crowd-sourced content across different gaming platforms.
The Economic & Philosophical Conjecture
If this idea works, why does it? Hypothetically, it takes the place of fractional reserve banking licensed by the federal reserve. The job of the federal reserve is to keep the currency stable and facilitate economic growth. That means fiat currency is backed purely by the strategic management of resources from the top down; the banks, governments, corporations, the influential, and finally the rest of us.
The banks’ primary business model is to secure loans that have a strong guarantee of being paid back and that financial instrument is what Resolve tokens ultimately rival. Resolves are a tokenized form of license responsible for the strategy of economic growth. This property emerges from the inherit value that they collect fees and that they are distributed fairly to the majority of participants. The evaluation of Resolves isn’t simply based on fees from the exchange of bonds; they can be staked into sidechains and other extensions of the ecosystem. The staking incentive is secured by the inherent whale resistance and distribution of the circulating supply. Resolves will have a growing number of ways to generate new wealth.
There are very apparent hierarchies that have evolved in nature and society. These structures are the double edge sword of all scopes of life. They have the potential to oppress, but also organize. Pyramid schemes are horrible, but the reality is we’ve been living inside them for thousands of years. Resolves granularize these “pyramid hierarchies” and places the power within the hands of the masses.