Defs. Key Definitions

Jason St George. "Defs. Key Definitions" in Next Generation Stores of Value: Privacy, Proofs, Compute. Version v1.3. /v/1.3/read/front-matter/key-definitions/

Key Definitions

Before proceeding, we establish precise definitions for the core constructs that recur throughout this thesis. These are not metaphors; they are operationally specified primitives.

Definition: VerifyPrice(W) — Specification Stub

For a canonical workload $W$, VerifyPrice is the public KPI vector:

$\text{VerifyPrice}(W) \equiv (p_{50,t}(W), p_{95,t}(W), p_{50,c}(W), p_{95,c}(W), \text{fail}(W))$

Where:

• $p_{50,t}(W)$, $p_{95,t}(W)$: median and 95th-percentile verification time (seconds)
• $p_{50,c}(W)$, $p_{95,c}(W)$: median and 95th-percentile verification cost (see cost vector below)
• $\text{fail}(W)$: verification failure rate (fraction of attempts that fail or timeout)

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Verifier Hardware Class (Reference Machine)

Tier	CPU	RAM	Storage	Network	Use Case
Laptop (baseline)	4-core x86-64, 2.5GHz	16 GB	SSD	100 Mbps	Default reference; any user should be able to verify
Mobile	ARM, 2GHz	4 GB	Flash	20 Mbps	Lightweight verification for wallets
Datacenter	16-core, 3GHz	64 GB	NVMe	1 Gbps	High-throughput verification nodes

All published VerifyPrice metrics specify which tier they target. The baseline is Laptop; mobile and datacenter metrics are supplementary.

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Cost Vector

Verification cost is expressed as a vector, not a scalar:

$c(W) = (t_{\text{cpu}}, m_{\text{peak}}, b_{\text{net}}, e_{\text{joules}}, c_{\text{est}})$

Component	Unit	Description
$t_{\text{cpu}}$	CPU-seconds	Total CPU time consumed
$m_{\text{peak}}$	MB	Peak memory usage
$b_{\text{net}}$	KB	Bytes transferred (witness, proof, state)
$e_{\text{joules}}$	J	Energy consumed (estimated from CPU/GPU utilization)
$c_{\text{est}}$	USD	Estimated fiat cost at current cloud/energy rates

The scalar $p_{50,c}$ and $p_{95,c}$ typically report $c_{\text{est}}$, but full vectors are available in telemetry for detailed analysis.

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Adversarial Conditions

VerifyPrice assumes realistic, mildly adversarial network conditions:

• Network RTT: 200ms (global average)
• Packet loss: 10% (degraded conditions)
• Witness size: Worst-case for the workload class (prevents gaming via cherry-picked inputs)
• DoS hardening: Verifier must handle malformed proofs gracefully (no crash, bounded resource use)

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Measurement Harness

• Reproducible benchmark suite: Open-source, deterministic test vectors for each canonical workload.
• Signed results: Verifiers publish measurements signed by their attestation key.
• Aggregation: Observatory collects results from diverse verifiers (geo, ASN, hardware) and publishes p50/p95 with confidence intervals.
• Auditable: Raw measurements are archived; anyone can reproduce and challenge published metrics.

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Target SLOs (Reference Design)

Workload Class	$p_{95,t}$	$p_{95,c}$	fail	Notes
ZK proof (SNARK)	≤ 5s	≤ $0.01	≤ 0.1%	Standard recursive/aggregated proofs
MatMul-PoUW	≤ 10s	≤ $0.05	≤ 0.1%	Large matrix verification
Provenance proof	≤ 2s	≤ $0.005	≤ 0.1%	Media/document attestation
Corridor settlement	≤ 30s	≤ $0.10	≤ 0.5%	Includes finality confirmation

These are targets, not guarantees. Actual SLOs are published per workload and adjusted as technology improves.

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Why this matters: VerifyPrice is the hinge that determines whether proofs and verified compute behave as commodities (publicly checkable) or as platform IOUs (trust someone’s claim). If $r(W) = v(W)/p(W) \ll 1$, verification is cheap relative to production and markets can form; if $r(W) \to 1$, we’re back to “trust the prover.”

Definition: Work Credits

A Work Credit is an energy-anchored claim on a standardized unit of triad work (privacy settlement, proof generation, or verified compute) that has been produced and attested under public SLOs.

Issuance: Credits are minted only when:

1. A valid proof of workload $W$ at tier $T$ is accepted by the network.
2. Telemetry confirms VerifyPrice(W,T) and other SLOs (latency, failure rate, decentralization) are within bounds.

Redemption semantics: Implementation-dependent. Work Credits can be designed across a spectrum:

• Non-redeemable but scarce: pure SoV instruments where credits represent historical work (like BTC tied to historical hashes). Value derives from scarcity and demand, not redemption rights.

• Redeemable vouchers: credits burnable for future proofs, compute, or settlement capacity. Provides direct utility claim.

• Fee/collateral/governance medium: credits required for network operations:

  • Fee prepayment: credit burns in lieu of per-call fees.
  • Collateral: credit staked as skin-in-the-game for provers, routers, and LPs.
  • Governance weight: credit-weighted voting in telemetry disputes and parameter changes.

These options are not mutually exclusive; a single network may support multiple redemption paths for different use cases.

Energy anchoring: Marginal cost of minting one credit is bounded below by energy and hardware required to pass verification. Unlike SHA-256 PoW, the work is useful. Each credit references a Facility Energy Receipt (FER) chain; if the referenced plant drifts out of profile (PUE > 1.5, carbon intensity > threshold, etc.), downstream credits are flagged.

Non-debt property: Work Credits do not promise fixed coupons or redemption in fiat terms. Value floats with demand for triad capacity.

Failure mode: If VerifyPrice regresses materially, new issuance halts until SLOs recover. Existing credits remain valid but may trade at a discount, reflecting the network’s degraded utility.

Definition: Monetary Object Hierarchy

The thesis distinguishes three categories of objects:

Evidence Objects (not scarce, not money):

• PIDL Receipt: Proof that a specific interaction occurred. Copyable, verifiable, not scarce.
• Work Receipt: Proof that a unit of work was completed. Evidence of past work; confers no future rights.

Capacity Objects (limited supply, not primary SoV):

• WC-Voucher: Prepaid access to future triad capacity at SLA-guaranteed rates. May expire. Useful for hedging, not for long-term savings.

Monetary Objects (scarce, SoV candidates):

• Base Token / WC-Base: The native unit required for fees, staking, collateral, and governance. This is the thesis’s primary store-of-value candidate.
• LP/Staking Shares: Derivative positions that grant fee exposure. Secondary SoV instruments.

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Hierarchy rule: Throughout this thesis, “the asset” refers to the base token unless otherwise specified. Work Receipts are evidence; WC-Vouchers are capacity hedges; the base token is the monetary object whose store-of-value properties are under examination.

Definition: Lawful Privacy

Lawful privacy is the design principle: default privacy with optional, user-controlled disclosure.

Concretely:

• Default state: Transactions, identities, and flows are encrypted and unlinkable without explicit consent.
• Disclosure mechanisms: Viewing keys, auditable receipts, and selective-disclosure proofs allow holders to prove specific facts (e.g., “I paid X to Y for purpose Z”) without exposing the full transaction graph.
• No backdoors: The protocol has no master keys, regulatory escrow, or “lawful intercept” APIs. Disclosure is always at the holder’s discretion.

Why “lawful”: The term signals that privacy is compatible with compliance when the holder chooses to disclose, without requiring surveillance infrastructure. Regulated entities can satisfy audits via viewing keys; the protocol itself remains neutral.

Coercion boundary: Lawful privacy is a technical guarantee. It cannot prevent social or legal coercion to disclose viewing keys. What it guarantees is that (1) non-custodial routes exist, (2) disclosure cannot be forced at the protocol level, and (3) coercion surface is minimized by keeping data encrypted by default.

v1.2 Quick Reference: Political-Economy and Physical-Capacity Definitions

The v1.2 update extends the thesis’s political-economy and physical-capacity vocabulary. Full treatments appear at the cited locations; short forms are collected here for quick reference.

• Balance-Sheet Repression (§3.1.1): financial repression implemented through collateral rules, capital treatment, stablecoin reserve rules, custody mandates, and institutional balance-sheet incentives.
• Administrative Repression (§3.5): the conversion of formally optional financial, identity, compute, and settlement rails into practically mandatory rails through custody defaults, compliance rules, app-store control, tax treatment, institutional mandates, benefit systems, and platform terms of service.
• Participation Line (§3.4): the household or organizational threshold below which a person or firm lacks the redundancy to act freely across time—to fail, retry, transact, move, learn, refuse coercive terms, or survive shocks.
• Agency-Preserving Infrastructure (§3.4, §3): infrastructure that expands a user’s capacity to act without converting the user into a dossier, dependency object, or platform account.
• Homestead Ratio (§4): the share of verified compute, proof generation, and AI-service capacity supplied by open-admission, non-hyperscaler, geographically diverse, independently verifiable operators.
• Facility Capacity Receipt (FCR) (§14.5.1): a signed, auditable receipt that extends Facility Energy Receipts with grid, cooling, redundancy, hardware, jurisdiction, and infrastructure-resilience claims.
• Physical VerifyPrice (§19.7.4): the time, cost, and confidence required to verify the physical infrastructure claims behind a unit of verified work.
• Wrapper Dominance Ratio (WDR) (§6.4): the ratio of custodial or synthetic economic exposure to protocol-native usage. A rising WDR indicates the asset may be financializing faster than it is becoming money.

v1.2 Quick Reference: Market-Realization Definitions

The v1.2 update also adds a market-structure vocabulary for reasoning about price without confusing it with adoption. Full treatments appear at the cited locations.

• Native instrument vs. external financial wrapper (§6.1): native instruments (Work Credits, staking, LP, corridor claims) touch the protocol and exercise fees, burns, or collateral. External financial wrappers (spot ETFs, ETPs, treasury companies, custodial balances, futures, options, swaps, leveraged ETPs) do not. Unqualified “wrapper” means the latter.
• Value capture vs. price capture (§6, Market-Price Non-Equivalence): value capture routes native demand through the monetary object; price capture is demand for exposure to the asset’s price and can occur with no protocol use. Neither implies the other, in either direction.
• Market Realization Plane (§6.5): the external financial machinery through which claims on the native asset are represented, financed, allocated, and priced. Orthogonal to the seven-layer stack — a plane around it, never a Layer 7.
• VerifyFlow (§23.1.1): the fourth verification family, measuring the external financial representation and price-transmission state of the native monetary object.
• Flow elasticity (ε) (Appendix H): the responsiveness of a wrapper’s shares outstanding to changes in its value per share; the observable signature of holder operating rules. Measured, not structural.
• Net mechanical gain (κ) (Appendix H): $L(L-1) + \varepsilon L^2$, the coefficient converting an underlying return into a wrapper’s return-coupled exposure demand.
• Wrapper Recycling Ratio (WRR) (Appendix H): $-\varepsilon L/(L-1)$; equal to 1 when holder flows exactly offset gross rebalancing, below 1 when the wrapper amplifies, above 1 when it is countercyclical.
• Return-coupled vs. return-decoupled flow (Appendix H): return-coupled flow responds to the return and shapes volatility and persistence; return-decoupled flow arrives independent of it and shapes destination and level.
• Wrapper–Native Growth Gap (WNG) (§23.1.1): $\Delta \ln E^{\text{wrapper}} - \Delta \ln U^{\text{native}}$; persistently positive means financial exposure is outgrowing monetary use.
• Compositional adversary (§4.2): a failure mode with no malicious actor, in which locally rational operating rules combine into concentration, procyclicality, recursive leverage, and uninformative prices.
• Capital Survival Ratio (CSR) (§23.1.1): whether successive investor cohorts in a wrapper preserved capital, as distinct from whether the product preserved AUM.
• Policy Concentration Ratio (§23.1.1): the share of net asset demand governed by the largest common rebalancing templates, treasury algorithms, or agent policies.

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