Appendix G. Glossary of Terms & Notation

Jason St George. "Appendix G. Glossary of Terms & Notation" in Next Generation Stores of Value: Privacy, Proofs, Compute. Version v1.4. /v/1.4/read/appendix/g-glossary/

Appendix G: Glossary of Terms & Notation

Triad: Privacy, Proofs, and Compute — the three cryptographic capacities that can function as monetary primitives.

VerifyPrice(W): A public KPI vector measuring the cost and time to verify workload W.

VerifyReach(N,R): Metrics for network reachability under censorship conditions.

VerifySettle(C): Metrics for settlement success and safety on corridor C.

r(W): Verification overhead ratio — v(W)/p(W), where v is verification cost and p is production cost.

Work Credit (WC-Base): The primary monetary object: a scarce native asset required for fees, staking, collateral, and governance. Minted against verified work under issuance constraints. Distinguished from WC-Vouchers (prepaid capacity hedges, not SoV candidates) and Work Receipts (evidence of past work, not scarce).

Value Capture Lemma: The central bridge argument: demand for triad capacity creates SoV premium for the native asset only if five conditions hold—required fee medium, supply reduction via burns, collateral lockup, issuance discipline, and non-bypassability. See §6.

Bypass Risk: The risk that users consume triad capacity (proofs, privacy, compute) through channels that do not require the native asset—e.g., fiat-denominated cloud services, stablecoin payment to operators. If bypass channels dominate, the SoV thesis fails.

Utility-Token Trap: The pattern where a network provides useful services but the native token fails to capture economic value because operators extract all surplus, users pay in alternative currencies, or governance inflates supply. The thesis’s value-capture conditions are designed to prevent this outcome.

PIDL: Proof Interface Definition Language — the minimal receipt schema for proofs and settlements.

PaL: Proofs-as-a-Library — SDK that compiles claims to proofs.

PRK: Privacy Rails Kit — executes non-custodial, refund-safe settlement over privacy corridors.

FER: Facility Energy Receipt — signed summary of a site’s energy use over a time interval.

PoUW: Proof of Useful Work — consensus mechanism where block rewards are earned by producing verifiable receipts of useful compute.

SLO: Service Level Objective — published targets for system performance and availability.

Bronze/Silver/Gold: SLA tiers for proof and settlement services with different latency, redundancy, and interruptibility characteristics.

MatMul-PoUW: Proof of Useful Work construction based on matrix multiplication verification.

ZK Money: Instruments primarily referencing Privacy + Proofs (shielded settlement capacity, ZK proof capacity).

Attestation Money: Instruments backed by proof capacity and provenance attestations. Formerly ‘Truth Money’ in earlier drafts; renamed to emphasize that proofs verify bounded claims (origin, computation, custody, policy compliance), not semantic truth.

AI Money: Instruments primarily referencing Compute + Proofs (verified FLOPs, inference capacity).

Layer 0: Verifiable Machines & Energy — open hardware and sampled supply chains as base reality.

Layer 1: Reachability — communications and transport resilience.

Layer 2: Distribution & Execution — software supply and runtime.

Layer 3: Identity & Claims — pseudonymous credentials without doxxing.

Layer 4: Truth & Work — proof systems, PoUW, VerifyPrice.

Layer 5: Value & Settlement — privacy rails and non-custodial flow.

Layer 6: Governance & Telemetry — keeping neutrality and resilience measurable.

Market Realization Plane: The external financial machinery — exchanges, custody, ETFs, treasury vehicles, index products, derivatives, dealers, passive mandates, systematic and agentic allocation rules — through which claims on the native monetary object are represented and priced. Orthogonal to the stack, not a layer within it. See §6.5.

Native instrument: A protocol-internal claim (Work Credits, staking or LP positions, corridor claims). Using it exercises fees, burns, or collateral.

External financial wrapper: A conventional market product written on the asset (spot ETF, ETP, treasury company, custodial balance, future, option, swap, leveraged or inverse ETP). Holding it exercises nothing. Unqualified “wrapper” means this.

Value capture vs. price capture: Value capture routes native demand through the monetary object via fees, burns, and collateral. Price capture is demand for exposure to the asset’s price, which can occur with no protocol use at all. Neither implies the other. See §6.

VerifyFlow: The fourth verification family: telemetry for the external financial representation and price-transmission state of the native asset. See §23.1.1.

Flow elasticity (ε): The responsiveness of a wrapper’s shares outstanding to changes in its value per share. ε ≈ 0 means holders sit still; ε ≈ −1 means they trim to a constant dollar position. Measured, not structural. See Appendix H.

Net mechanical gain (κ): L(L−1) + εL², the coefficient converting an underlying return into a wrapper’s total return-coupled exposure demand. See Appendix H.

Wrapper Recycling Ratio (WRR): −εL/(L−1). Equal to 1 when holder flows fully offset gross rebalancing; below 1 the wrapper amplifies; above 1 it is countercyclical. See Appendix H.

Return-coupled vs. return-decoupled flow: Return-coupled flow (Q^RC) responds to the return itself and shapes volatility and persistence. Return-decoupled flow (Q^RD) arrives largely independent of the day’s return and shapes destination and level. See Appendix H.

Wrapper–Native Growth Gap (WNG): Δln(wrapper exposure) − Δln(native use). Persistently positive means financial exposure is outgrowing monetary use.

Capital Survival Ratio (CSR): Whether successive investor cohorts in a wrapper preserved capital, as distinct from whether the product preserved AUM. See §23.1.1.

Policy Concentration Ratio: The share of net asset demand governed by the largest common rebalancing templates, treasury algorithms, or agent policies. Ownership can be decentralized while behavior is not.

Compositional adversary: A failure mode with no malicious actor: locally rational agents whose incompatible operating rules combine into concentration, procyclicality, recursive leverage, and uninformative prices. See §4.2.

Sovereign Optionality (O_s): A capacity-weighted index of the number of independent physical pathways by which verified work can continue under disruption, net of exposure to external coercion. Computed entirely from Facility Capacity Receipt fields. See §14.9.

Closed Sovereign Stack: A vertically integrated, state-administered system of energy, industry, compute, payments, identity, and surveillance that minimizes external dependency while concentrating sovereignty in the state rather than the user. The structural mirror of the open sovereign stack. See §29.

Open Sovereign Stack: The thesis’s normative target: a stack where privacy, proof, compute, settlement, and governance infrastructure reduce dependence on both centralized platforms and sovereign permission, with sovereignty residing in the participant. See §29.

Disruption-Adjusted VerifyPrice: The probability-weighted cost of verification across physical disruption states, rather than the observed cost under benign conditions. Used to evaluate the true cost of a resilient vs. brittle proving fleet. See §14.10.

Energy Interdiction: Adversary class using curtailment, rationing, tariff discrimination, interconnection denial, load prioritization, and cooling/water constraints to raise verification cost without prohibiting cryptography. Distinct from administrative repression in that there is no order to comply with. See §4.6.

Red Line 13 (Energy Sovereignty Failure): Verification affordability becomes a sovereign policy variable. Triggers when network O_s falls below threshold for ≥2 quarters or capacity concentrates in curtailment-regime jurisdictions. Monitors upstream of Red Line 1. See §27.

Physical VerifyPrice (two senses): (1) The constitutional real-resource verification SLO on reference hardware, exogenous to token price — Red Line 1 depends on this. (2) The cost of auditing the physical infrastructure claims behind a proof (FCR audit cost) — Red Line 10 depends on this. Both are labeled “Physical VerifyPrice” in the text; context determines which. See §19.7.4, Glossary note.

FCR: Facility Capacity Receipt — extends FER data with infrastructure resilience, grid, cooling, jurisdictional, and hardware-diversity metrics. See §14.5.1.

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