Defs. Key Definitions

Jason St George. "Defs. Key Definitions" in Next Generation Stores of Value: Privacy, Proofs, Compute. Version v3.2. /v/3.2/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:

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)

• $\mathrm{fail}(W)$: verification failure rate (fraction of attempts that fail or timeout)

This is the canonical five-field tuple; the cost fields derive from per-run receipts via the published price model of §19: Layer 4: Truth & Work (per-run cost, then percentiles — never recomputed from percentile inputs), and the physical-component tuples published alongside are views of this vector, not competing definitions (Appendix A: Formal Model of Verification Asymmetry & VerifyPrice).

Verifier Hardware Class (Reference Machine)

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

Cost Vector (input view)

The five-field tuple above is what is published and what every SLO reads on. Beneath it sits the input view: per run, the verifier records a cost vector, not a scalar,

from which the canonical tuple is priced: $t_{\mathrm{cpu}}$ and $e_{\mathrm{joules}}$ enter the per-run price model of §19: Layer 4: Truth & Work to yield $c_{\mathrm{est}}$, whose percentiles are $p_{50,c}$ and $p_{95,c}$; wall-clock time percentiles are $p_{50,t}$ and $p_{95,t}$. $m_{\mathrm{peak}}$ and $b_{\mathrm{net}}$ are published, not priced: they appear in the receipt and in the physical-component views, bound the reference machine a verifier must be, and enter no cost percentile. The vector is a view of the canonical tuple’s inputs, not a second definition of VerifyPrice (Appendix A: Formal Model of Verification Asymmetry & VerifyPrice).

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)

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.

Target SLOs (Reference Design)

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

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.

Claim semantics: Implementation-dependent. Work Credits can be designed across a service-contract spectrum:

• Non-redeemable evidence-linked claims: transferable claims referencing historical work. Scarcity may support price, but does not make them money.

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

• Fee/collateral 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, where the tier permits (§19: Layer 4: Truth & Work).

These options are not mutually exclusive; a single network may support multiple redemption paths for different use cases. Work Credits carry no governance weight: the franchise is time-locked base asset only (§22: Layer 6: Governance & Telemetry).

Energy anchoring: Marginal cost of minting one credit is bounded below by the energy and hardware required to produce work that passes verification. The difference from SHA-256 PoW is that this work has an external buyer—which is the point of the design and also its cost, since a buyer can be regulated, subsidized, or coerced in a way that a hash puzzle’s absent buyer cannot (§30: Objections & Responses). 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.

Deliverability bound: Issuance is capped by stress-adjusted DVC for the specified workload and tier, not by gross energy, installed hardware, or benign-state proof throughput.

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: Instrument Hierarchy

The thesis distinguishes five 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.

• FER/FCR: Evidence about energy, infrastructure, resilience, and the edge capacities used to compute DVC.

Capacity and Service Objects (typed claims, not presumed SoV):

• Work Credit / WC-Voucher: Prepaid or transferable access to specified triad capacity under workload, location, hardware, SLA, and delivery terms. May expire. Useful for service procurement and hedging, not presumed savings.

Duration-Bearing Credit:

• Project Notes and Capacity Bonds: Explicit credit claims with maturity, covenants, default states, and loss waterfalls. Proof-audited, but never transferred onto the base asset.

Derivatives and Operating Claims:

• LP/Staking Shares: Positions granting fee, slashing, corridor, or validator exposure. They are not monetary objects.

Conditional Monetary Candidate:

• Base Asset: The native fee and settlement unit. It is evaluated for monetary premium only if DVC, non-bypassability, holder quality, agency, and the remaining chain conditions pass.

Hierarchy rule: Throughout this thesis, “the asset” refers to the base asset unless otherwise specified. Evidence, service claims, duration-bearing credit, and derivatives do not inherit its conditional monetary candidacy.

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 protocol-level master key, regulatory escrow, or “lawful intercept” API. The holder’s own spending-key root is a master key for its own tree and is never disclosed; per-epoch keys and per-note proofs are the units of disclosure (§20: Layer 5: Value & Settlement). 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.

Quick Reference: Political Economy & Physical Capacity

These terms carry 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 (§2: The World Forces New Monetary Primitives): financial repression implemented through collateral rules, capital treatment, stablecoin reserve rules, custody mandates, and institutional balance-sheet incentives.

• Administrative Repression (§4: Threat Model): 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 (§2: The World Forces New Monetary Primitives): 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 (§2: The World Forces New Monetary Primitives, §3: First Principles: What a SoV Must Survive): infrastructure that expands a user’s capacity to act without converting the user into a dossier, dependency object, or platform account.

• Homestead Ratio (§4: Threat Model): 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: Layer 0: Verifiable Machines & Energy): a signed, auditable receipt that extends Facility Energy Receipts with grid, cooling, redundancy, hardware, jurisdiction, and infrastructure-resilience claims.

• Physical VerifyPrice (§19: Layer 4: Truth & Work, Appendix A: Formal Model of Verification Asymmetry & VerifyPrice): the time, cost, and confidence required to verify the physical infrastructure claims behind a unit of verified work.

• Wrapper Dominance Ratio (WDR) (§10: Work Credits: Energy-Anchored Claims): a reported pair — custodial or synthetic exposure share (stock) and wrapper-to-native activity ratio (flow) — never divided into one scalar. A rising WDR indicates the asset may be financializing faster than it is becoming money.

Quick Reference: Physical Sovereignty & Substrate

These terms make the physical layer falsifiable and name the closed-stack competitor. Full treatments appear at the cited locations.

• Energy & Physical Interdiction (§4: Threat Model): adversary class using curtailment, rationing, tariff discrimination, interconnection denial, and load prioritization to raise verification cost without prohibiting cryptography.

• Sovereign Optionality ($\mathcal{O}_s$) (§14: Layer 0: Verifiable Machines & Energy): capacity-weighted index from Facility Capacity Receipt fields; feeds risk haircuts and Red Line 13.

• Disruption-Adjusted VerifyPrice (§14: Layer 0: Verifiable Machines & Energy): probability-weighted verification cost across physical disruption states; resilience is subordinate to constitutional VerifyPrice SLOs.

• Red Line 13: Energy Sovereignty Failure (§27: Risk Analysis & Failure Modes): verification affordability becomes a sovereign policy variable; monitors upstream of Red Line 1.

• Closed vs. open sovereign stack (§29: The Closed Sovereign Stack): convergent trust-minimization applied to matter; inverted locus of sovereignty (state vs. participant).

• Real-Resource VerifyPrice SLO vs. Physical VerifyPrice (Appendix A: Formal Model of Verification Asymmetry & VerifyPrice, glossary): the constitutional cost band on verifying receipts in real resources on reference hardware (Red Line 1) vs. the cost to audit FCR infrastructure claims (Red Line 10). Earlier versions used one name for both.

Quick Reference: Market Realization & Price Formation

This is the 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: The Triad and the Monetary Candidate): native instruments include the base asset, Work Credits, evidence artifacts, project credit, staking, LP, and corridor claims. Touching the protocol does not make an instrument monetary. External financial wrappers (spot ETFs, ETPs, treasury companies, custodial balances, futures, options, swaps, leveraged ETPs) do not touch it. Unqualified “wrapper” means the latter.

• Value capture vs. price capture (§10: Work Credits: Energy-Anchored Claims): 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 (§10: Work Credits: Energy-Anchored Claims): 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: Extended Telemetry, Appendix A: Formal Model of Verification Asymmetry & VerifyPrice): the fourth verification family, measuring the external financial representation and price-transmission state of the native monetary object.

• Flow elasticity ($\varepsilon$) (Appendix H: Formal Model of Market Realization, Wrapper Flows, and Price Capture): 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 ($\kappa$) (Appendix H: Formal Model of Market Realization, Wrapper Flows, and Price Capture): $L(L-1) + \varepsilon L^2$, the coefficient converting an underlying return into a wrapper’s return-coupled exposure demand. Defined for every $L$; the rebalancing term $L(L-1)$ is positive for long ($L > 1$) and inverse ($L < 0$) daily-reset products alike, and vanishes at $L = 1$, where $\kappa = \varepsilon$.

• Wrapper Recycling Ratio (WRR) (Appendix H: Formal Model of Market Realization, Wrapper Flows, and Price Capture): $-\varepsilon L/(L-1)$; equal to 1 when holder flows exactly offset gross rebalancing, below 1 when the wrapper amplifies, above 1 when it is countercyclical. Domain $L \notin \{0, 1\}$, inverse products included: for unlevered wrappers ($L = 1$) the denominator vanishes, the wrapper has no rebalancing trade to recycle, and the published object is $\varepsilon$ itself with the label “unlevered” (Appendix H: Formal Model of Market Realization, Wrapper Flows, and Price Capture).

• Return-coupled vs. return-decoupled flow (Appendix H: Formal Model of Market Realization, Wrapper Flows, and Price Capture): return-coupled flow responds to the return and shapes volatility and persistence; return-decoupled flow arrives independent of it and shapes destination and level. The decomposition is exhaustive and exclusive: the $\varepsilon$-component belongs to the coupled side (inside $\kappa$), the intercept $\alpha$ to the decoupled side, and the residual is published unabsorbed (Appendix H: Formal Model of Market Realization, Wrapper Flows, and Price Capture).

• Wrapper–Native Growth Gap (WNG) (§23: Extended Telemetry): $\Delta \ln E^{\text{wrapper}} - \Delta \ln U^{\text{native}}$, computed on unit-denominated quantities over a trailing four-quarter window (revaluation stripped); persistently positive means financial exposure is outgrowing monetary use.

• Compositional adversary (§4: Threat Model): 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: Extended Telemetry): whether successive investor cohorts in a wrapper preserved capital, as distinct from whether the product preserved AUM.

• Policy Concentration Ratio (§23: Extended Telemetry): the share of net asset demand governed by the largest common rebalancing templates, treasury algorithms, or agent policies.

• Automatic vs. marginal buyer (§2: The World Forces New Monetary Primitives): formula demand versus residual price-setting demand; quantity of bids is not quality of risk absorption.

• Duration of the claim vs. duration of the project (§2: The World Forces New Monetary Primitives): a repression-resistant store of value must not be a coupon; civilization still needs a duration warehouse. Not a layer.

• Buyer-quality checklist (§23: Extended Telemetry, Appendix H: Formal Model of Market Realization, Wrapper Flows, and Price Capture): persistence, horizon, liability match, loss-bearing capacity, countercyclicality—fields, not a scalar.

New here? Start with the one-minute version.

Tip: hover a heading to reveal its permalink symbol for copying.