TLDR summary: making polluters pay is the simplest, most obvious way to ensure healthy economy within the BaseX ecosystem. There are multiple historical examples of corporations being forced to repair the damage. With the increasing awareness of climate change and shady business practices this can become the fundamental driving force towards mitigating climate change.
Current status: go to market, partnerships, onboarding = genuine challenge.
To prove that economy works in practice = not attainable at the moment.
In the meantile, let's write an article describing economic assumptions. It will become content marketing piece educating about the space, so clearly let's do it :)
Radical change is possible
One of the original assumptions is that radical change is possible, it all starts from the belief. We genuinely believe that BaseX is so much better than existing system to the point where some forward-thinking country will simply adopt it as a standard. Countries are slow to move though, it takes the legislative process. It will not happen overnight and probably the first country will be a small one, but that's clearly an objective that will indicate "we've made it".
Meaning of the name: BaseX. It's inspirational. Solid base with eXponential potential. "X" can stand for any number of metrics.
In fact we are not married to any particular metric. Initially: SDG (sustainable development goals). Then: EBF (ecological benefits framework). Then: best of both worlds, we can use both and discover interesting interdependencies in data.
Polluters pay
Fundamental assumption: polluters are responsible for negative value.
Here are some high profile examples
BP and the Department of Justice agreed to a record-setting $4.525Â billion in fines and other payments.[23][24][25]Â As of 2018, cleanup costs, charges and penalties had cost the company more than $65Â billion.[26][27]
In September 2014, a United States District Court judge ruled that BP was primarily responsible for the oil spill because of its gross negligence and reckless conduct.[28]Â In April 2016, BP agreed to pay $20.8Â billion in fines, the largest environmental damage settlement in United States history.[29]
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https://en.wikipedia.org/wiki/Hinkley_groundwater_contamination (related movie "Erin Brockovich” with Julia Roberts)
Currently it takes time to reach compensation settlement in environmental cases like this. With public pressure, independent journalism and platform like BaseX with regular people reporting on the polluters = with increased awareness it can happen much faster and for larger amount of cases, not just the high profile ones.
The polluters compensating for damage is essential in providing the buy pressure for positive value generated. Otherwise there would be only supply side (various organisations creating positive value) but no-one around to purchase it.
What else provides value for PVT - positive value token?
(tangent: we are looking for a better name, one of the option is GIFT: generated impact functional token)
Compensating for pollution seems like the most obvious use case.
Another option: philanthropic donors who want to support organisations doing something good.
Another option: flex and virtue signalling, sometime buying PVT and displaying it as badge of honour.
Another option: businesses signalling green credentials and accepting PVT and offering discount to those who accumulated it and want to use it.
BaseX carbon credit standard
Current system: prohibitively complicated, expensive, not scalable.
Objective: we need loads of people (farmers around the world) to do reasonably good job, as opposed to high barrier of entry and sending samples to the lab, especially in countries without same day Amazon delivery.
Technology makes it possible, the timing is excellent:
Dispute resolution
Who decides what is truth, what is real? (so-called “oracle problem”)
Currently: Kleros jurors
Potentially: Web of Trust and attestations
Post on Gitcoin governance forum with the conceptual description: https://gov.gitcoin.co/t/the-impact-web-of-trust-could-change-everything/17635
ETH Denver hackathon implementation:
Not married to Kleros. In fact it is non-obvious how to explain to the non-technical, not-crypto-Web3-native audience. On the other hand, explaining Web of Trust, attestations and reputation system is not straightforward either.
Another option for dispute resolution and assessment is an independent 3rd party. Personally it is not my first preference but if the market decides that is a way to go = so be it. It might be easier to explain, it seems more familiar, „just trust these guys” but it is not aligned with „don’t trust verify” principles of blockchain industry.
More info
Check the website / wiki / pitchdeck / whitepaper.
I really wish there was more evidence that economy can work. But the assumptions seem robust and with more data the parameters can be fine-tuned. There is entire section on the wiki dedicated towards tokenomics and keeping it healthy, without flooding the market with large number of tokens.
Next steps
The team what delivered EBF Network of Trust in incredibly strong.
And the success from hackathon is receiving attention:
Thinking about combining the best approaches and joining forces, in fact we created a Telegram chat and we actively discuss the next steps (building in public and transparent communication). That’s why this blog post, to explain some economic assumptions and probably the single most important principle: polluters pay. EBF has “benefits” in the name but it can be expanded to accomodate negative value and create a buy pressure for generated impact.
Think in terms “negative benefits” aka “externalities” and accounting for the full cost of the producs, goods, services. Such approach will tap into free market forces.
This is a great 5 minutes summary video:
Easy to explain.
Easy to understand.
Makes intuitive sense.
The reason why it doesn’t exist yet: how to measure it in a reliable way. Convergence of exponential technologies makes it possible to have solid chance of solving this problem. And even if the solution is not always 100% accurate, even a partially valid solution is a step in the right directions that offers data towards finetuning.
Deciding on the metrics.
Decicing on the dispute resolution.
Deciding on the governance.
And in the meanwhile leading the initiative by building prototypes, proof of concepts, talking with real users and gathering more data.