Defs. Key Definitions

Jason St George. "Defs. Key Definitions" in Next Generation Stores of Value: Privacy, Proofs, Compute. Version v3.5. /v/3.5/read/front-matter/key-definitions/

Key Definitions

The core constructs that recur throughout this thesis are defined precisely here, before they are used. 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 $r(W) \to 1$, the market is back to “trust the prover.”

Definition: Work Credits

A Work Credit is a typed, prepaid claim on reserved future service — privacy settlement, proof generation, or verified compute — owed by a specified provider or provider pool. Its issuance requires an admissible capacity commitment and an atomic reservation against outstanding obligations. Verified fulfillment extinguishes the claim and produces a receipt. The receipt is evidence of fulfillment and creates no further service obligation.

Lifecycle:

1. Commit. A named provider or constituted pool commits capacity for workload $W$ at tier $T$ over a stated delivery window, with Facility Energy Receipts and Facility Capacity Receipts behind it.

2. Sell and reserve, atomically. The sale and the reservation are one step: no valid sold claim exists without its capacity reserved against every outstanding claim competing for the same capacity.

3. Deliver and verify. Delivery passes the registry acceptance criterion, with VerifyPrice($W$,$T$) and the other SLOs within bounds.

4. Extinguish and receipt. Verified delivery retires the claim and issues the Work Receipt.

Cancellation, expiry, default, and refund follow the terms written in the claim. A failed delivery becomes neither an open-ended promise nor a claim on the base asset.

Uses: a credit can be redeemed for its service, transferred, or pledged as collateral where its tier permits (§19: Layer 4: Truth & Work). Two neighbours are not Work Credits: a transferable record of historical work is a Work Receipt, which is evidence and not a claim, and advance proceeds that finance capacity not yet built are project finance, named and treated separately (§2: The World Forces New Monetary Primitives). Work Credits carry no governance weight: the franchise is time-locked base asset only (§22: Layer 6: Governance & Telemetry).

Energy anchoring: A credit cannot be sold without an admissible capacity commitment, and it cannot be extinguished without delivering work that passes verification, so the cost of honoring one is bounded below by the energy and hardware that work requires. 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.), the credits reserved on it are flagged.

Deliverability bound: Outstanding claims are capped by stress-adjusted DVC for the specified workload and tier over the delivery horizon, not by gross energy, installed hardware, or benign-state proof throughput. DVC supports the reservation limit; it does not guarantee performance.

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 sales halt until SLOs recover. Outstanding credits remain claims on their obligors under their stated terms and 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) (§10b: Why Hold the Base Asset?): 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).

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 (§10b: Why Hold the Base Asset?): 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 (§10b: Why Hold the Base Asset?): 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.

• Delegation hop, trust perimeter, Cross-Perimeter Share (§5b: The Delegation Economy: Who Buys Verification): a task specification crossing a principal–agent boundary; the set of processes a party can sanction outside the protocol; and the fraction of hops that cross such a perimeter, which is the demand variable for portable receipts and is not yet computable.

• Standing and standing inversion (§5b: The Delegation Economy: Who Buys Verification, §4: Threat Model): the locus of ownership, consent, liability, and revocation over an acting process; and the failure in which agents satisfy every measured holder condition while human title over them stops binding.

• Principal Map, HRS, NPCR (§23: Extended Telemetry): an overlay classifying native demand and holders by ultimate principal; the human-revocable share of agent-controlled native balances; and policy concentration computed over native positions.

• 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.

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