 My name is Sepp and I work on the SELO protocol and today I'm going to be talking about the future of value and What I'm gonna start with hold on guys guys guys, I'm sorry to my talk so I Want to start off by talking about painting in the 1800s there was in the mid-1800s. There was a real big Explosion in technology innovation and painting in about 18 in 1841 There was the invention of the paint tube and the paint tube We don't think much about it now But it was a real technology innovation because before the paint tube the technology to hold paint was a pigs bladder And you can imagine that a pigs bladder wasn't very portable There's a reason why you didn't see a lot of people painting outside paint paintings are the outdoors is because people were Pretty confined to their studio where they could hold their paints and mix their paints Another invention around this time was the metal ferrule the ferrule is the piece between the handle and the brush itself and Prior to the metal ferrule people use string or or wire as the ferrule and the problem with this is that it only allowed for Round brushes with the metal ferrule you all of a sudden could have flat brushes And so that in turn allowed for the impasto effect An effect where people put paint heavily on top of the of the brush and very quickly paint And so together these two technologies along with a third technology, which is which was the collapsible easel Let to a style of painting that we now call impressionism And this is both amazing and the story of the world There were these new technological innovations and these techno and for an expressive medium and the technological innovations increased the expressive range of the medium and that allowed Then lots of things but including this these works of unspeakable beauty And this talk is is not about painting. It's about money But I wanted to start with this because money is also an expressive medium It can express its expressive range is very narrow. It can only express one thing which is value But it does a reasonable job at that and as we are now in a place where we're thinking about We're in a place of technological innovation in the technology behind this expressive medium It's useful to think about what are the features of money that would lead to more beauty What are the futures that would lead to a more beautiful world? And I would posit five None of these are new ideas all of these are old ideas, but I believe their ideas whose time has come The first is a universal basic income or universal basic dividend That is tied directly into the money system So that doesn't need to be implemented on top of the money system, but it's native to the money system a Basic income or a basic dividend we see this a lot in nature is like sunlight or rain there a Consistent source of energy that's reasonably evenly distributed in a region and we see In nature in places where there is lots of sunlight and lots of rain we have Biodiversity and bioprosperity And so that's the first feature is a universal basic income or universal basic dividend The second feature is Demeridge and Demeridge is an idea by the economist Sylvia O'Casell who was active in the late 19th and early 20th century and he observed that you know during times of recession People tend to hoard money and that hoarding of money ends up intensifying the recession And so he said well what's what's the path out of this and what he proposed was a small fee on the holding of money He called this negative interest or Demeridge and the way that he implemented it was he had These dollar bills he proposed these dollar bills But in order for the dollar bills to be valid You'd have to affix a stamp each month to the dollar bill and the stamp cost one cent And during the Great Depression there were lots of experiments with Demeridge charge currencies most notably in most notably in Vorgel, Austria, and this is actually the the Vorgel shilling of the Demeridge charge shilling You can see the stamps on the right-hand side When it was issued in Vorgel Vorgel became this oasis of prosperity in the midst of the Great Depression People called it the miracle of Vorgel and you saw these interesting things like people started paying their taxes early Because in a Demeridge charge world it actually makes sense to pay your taxes early So that's the second feature is Demeridge and Demeridge if you think about a UBI as rain Demeridge can be seen as evaporation So it it helps to circulate the energy and avoids stagnation The third feature is an idea by a philosopher I love named Charles Eisenstein Called natural capital back currencies And he basically observed he says you know whatever backs money people tend to make more of Because it's like printing money So when gold back money there was this intense incentive to mine gold And so what Charles said is he said well, why don't we back money with things that we like like pristine forests and clean rivers And I think that's a lovely idea. So that's the third feature is called natural capital back currencies The fourth feature for lack of a better term I'll call an ecology of value And I think the best way I can describe it is to give an analogy to the early days of the internet I remember in the early internet there was this excitement around like whoa like we could use this to put the encyclopedia Britannica online And yes we could and yes that was useful But what it did was it actually borrowed an earlier metaphor where information was an object rather than an ecology We had a monoculture of information and what we thought about was to make that monoculture more efficient But in practice what the internet allowed was a polyculture of information it allowed an ecosystem of information And I can imagine the same thing for value I can imagine that we will have a diversity of local currencies of regional currencies Of national fiat currencies of global reference currencies of utility currencies of store of value currencies medium of exchange currencies All filling niches that it doesn't make sense for the others to fill and creating a polyculture with all of the resilience that that that entails And finally the fifth feature is the creation of money in a manner that's not concomitant with the creation of new debt So right now all money is created through debt and the consequence of that is that there's always more debt than there is money We can never pay off our debts and I'd argue that the beginning of the industrial age that was actually a feature It impels growth it incentivizes growth and growth has been good to us But I think now as we start to reach the carrying capacity of the earth It's not clear to me that growth in mean consumption is the way to solve our problems And it certainly is not clear to me that we should tie the medium of exchange to the incentive for that growth So those are the five features there universal basic income, demerage, natural capital back currencies and ecology of value And creating money in a manner that's not concomitant with the creation of new debt Those of you here will probably recognize that a lot of the technologies that the crypto community has been building addresses some of these So for example block rewards are a way to create new money without creating new debt Tokens are a technology by which we can create an ecology of value Smart contracts will allow for demerage although for demerage to really work we also want stability of value And the UBI natural capital back currencies are the hardest because the technologies that we're building are the most nascent They are technologies around identity and stability So what I want to do today is I want to just take a little dive into the idea of natural capital back currencies And propose the sketches of an implementation for it I'm interested in the proposal and the sketch but I'm more interested in the kind of thinking that it'll provoke So let's start with a stable value coin a decentralized crypto back stable value coin So the stable value coin has a reserve of other coins and it's over collateralized It also has transaction fees and mining rewards go to the reserve Variable so that based on the reserve ratio so that we can mitigate volatility But kind of at base we can think about it as an over collateralized crypto backed coin The key insight here is that the more the demand for the stable coin The more algorithmic purchases of the reserve assets so the because it's fully back So the greater the demand for the stable coin the greater the demand for the reserve assets And so that gives us a lot of flexibility when we think about Making that that makes it interesting when we think about reserve asset composition So I mean right now there's not a lot of assets that we could imagine putting into the reserve But over time there will be you could imagine tokenization of real assets You can imagine tokenization of commodities that get put in the reserve You can also imagine that over time people will start tokenizing pristine forests And so then if we if the community through governance says something like 10% of the reserve is allocated to Tokenized forest land what it does is it gives an immediate demand for tokenized forest And as the monetized realm and the stable coin grows so does the demand for natural capital It's lovely So the only challenge is that well how do we know that this tokenized forest land is actually for real One way we could do it is we could have somebody like the World Wildlife Fund sign Sign the coin basically a testing saying this is legitimately a tokenized forest But what what if we don't know enough about the World Wildlife Fund or what if it's local NGO or local municipality What we really need is we need a trust score for the attester And so I'll talk a little bit about I gave a talk on a protocol that I worked on several years ago called Eigen Trust Earlier this week and I'll give like the two slides summary of it of it in this context So we take that attester and we say okay We want to find some way to trust how much should we trust that attester and now you wait to say well how many people know that attester and trust that attester And so we can just sum over all the people who trust that attester The problem is that that attester could create a thousand symbols and those thousand symbols could all say that they trust this attester And so what we'll do is we'll just make a little tweak on it where we will say you know we're going to sum all of the people who trust the attester But wait their trust by their global trust scores And then and so what you do what we do is we define a recursive algorithm in which somebody's trust is defined by a global trust scores Defined by how many people trust them weighted by their global trust scores Which is in turn defined by how many people trust them weighted by their global trust scores and so on and so forth There's a ton of there's a ton of detail in the paper on how to address adversarial collect collectives or how to do this in a decentralized way But I'm going to be I'm not going to talk about it in this talk mostly what I wanted to do in this talk is briefly introduce three high level ideas from narrow to broad The first high level idea is that I think as a community we can have a really big impact on the environment through the introduction of things like natural capital back currencies And even more specifically in the idea of having stable coins with forest reserves of forest forest tokens in the reserve The second the second idea that I wanted to bring up is there are a lot of things that we want to both incentivize and reward through through certain protocols that are not done through machines And because they're not done through machines they're difficult to have cryptographic proofs around For example we may want to incentivize and reward planting trees or putting solar panels on your roof Or even more basically we may want to incentivize and reward being a person And while these are very difficult to do through cryptographic proofs I can trust weighted attestations are a great initial step forward in thinking about how to evaluate claims that can't be done through cryptographic proofs And then the third and this comes very much at the beginning of the talk is that I think as we're in this space of rapid innovation around this expressive medium I think beauty is really important like I think if we can envision in detail a more beautiful world It'll help to guide the kinds of technologies that we build So I want to conclude with a story this is the story of a city in Brazil called Curitiba And in the early 90s they had a really thoughtful mayor and the mayor noticed well he had observed that basically in the favelas around Curitiba The roads were too narrow for the garbage trucks and so garbage was collecting in the favelas and spilling over into the river So what he did was amazing it was fascinating he started a program in which there was also an underutilized bus service So he started a program in which people were given bus tokens in exchange for garbage And so what happened was people started collecting garbage getting bus tokens and using them to go downtown to find work And what happened next was even more amazing at a certain point those tokens started circulating in the favelas as currency And that currency ended up being making it possible for people to collect more garbage than they needed bus tokens And so what we had is we had this token that was really a stable value token backed by public transportation Earned into existence through environmental remediation and it gave dignity and meaningful work and environmental remediation to a community that needed it I could imagine thousands of these So that's this is the kind of story that I think I'd love for us as a community to enable Just to finish up as I said I work on the SELO protocol in the SELO community we're thinking about problems like this all the time So if you're interested in these kinds of problems we'd love to have you join us you can follow us at SELOHQ or SELO.org Thank you very much