While thinking about how to tokenize documents or even the rationalization of the NFT, it's important to remember that none of these concepts are new.
The NFT platform allows innovative assignment and storage of all kinds of new concepts. So let’s explore a few real-world NFT applications with nothing to do with right-click-savings.
These use cases go beyond the storage of art and into areas of implementing non-digital concepts and enforcing their property rights on the internet. Many networks could implement these systems — many forms of these projects already exist.
So while some are calling this a revolution, in reality, it’s just the next step of our social-economic system. No one ever claimed the gold standard was perfect — it became more rational as it became more comprehensive.
By the year 2021, when you buy a piece of gold, you’re not buying the gold itself. You are publicly signaling your commitment to the value of the gold.
The same is true for any NFT, regardless of the underlying fractional asset. It’s a leap of faith that we expect others to value it later. The question always urges, ‘it’s not backed by anything at all’ — except for the policy.
But we should not underestimate the importance of the core advantages of secure international securities
And neither should we undermine the rational and secure policy of smart contracts.
From the start, we realized we needed this standard to automate the operation of the gold. Looking back 100 years, we find references to the important advantages of commodity reserves:
- effective international acceptance — removes the need to submit policy decisions to international authority
- automatic economic policy — provides predictable monetary value easing use for all parties
- secure fractional mechanism — protects changes in supply, either through value or in an agreed upon a system of practical application.
It is the same story on different scales.
Social honor concept examples
There are use cases in the wild.
A credit tokenization system
There are many practical ways a credit system can play out. But by far the most long-lasting example we can pull from the field of real-world DeFi based organizations is a Bio-based “Value Chains” for growing and sustaining Bio-economy system.
We can implement a system in a way that rewards participants for measuring and monitoring the environmental impact of certain economic activity. Imagine a system where there is a platform to trade “Carbon Tokens” to smart contracts or public wallets.
One thing to understand about the use of cryptocurrencies, if they enable the existence of peer-to-peer liquidity pools.
These pools serve as a look-up system for public keys that can be used for a variety of purposes.
This is just how a group of shareholders or an ecosystem of businesses might pool together money and vote the use of public funds and treasuries for various trusts.
We have many examples of “DAOs” (decentralized autonomous organizations) and other “LPs” (liquidity pools) on the blockchain, but when you put these smart contracts and tokenize the reserve into a tangible currency model, you see a pattern of trust that emerges: Generators, Consumers, and Validities.
This now gives us the following set of actors that take part in a bio-economic reserve system:
- Carbon Credit Generators — wind farms, solar operations, and other carbon neutral energy actors.
- Carbon Credit Consumers — carbon emitters, polluters, oil companies, soda bottle distributors, and such.
- Carbon Credit Validities — network “nodes” with incentive to parameterize, appropriate, or verify project’s truth and otherwise take part in additional regulatory activities.
If you can imagine this playbook: generators create the underlying reserve token, consumers purchase them through bond sales, and when validations prove that a consumer has appropriately used the carbon credit, consumers can exchange an NFT (in return of carbon dioxide mitigated or removed).
The economic policy and smart contracts can mint and destroy these NFTs to help ensure everyone works in favor of the goals of protocol, not the players.
The energy consumers could also use NFTs by offering them as stake as needed for various regulatory requirements, traded for other currencies through automated market makers, or stored in value. Attractive bonding policies can be made so that stake and yield compounds through a systematic rebase. This is a built in treasury policy designed to compound APY, which in trust earns investors and stakeholders additional return for simply holding the stake in the protocol.
This sort of thing isn’t just a dream coming from some white paper (Go Pokes), it’s also the primary policy behind Klima DAO.
Let’s get fractional: A data model for intellectual properties
Jpegs and mp3s are just the beginning.
We’re seeing non-digital assets become licensed on blockchain and we can now prove that those things are what they are (and who they belong to).
Think about owning a tomato seed. You plant this seed and then hook up to sensors and optimize the soil/water/air quality/temp and such to get that seed of tomato to grow, all the while storing all those analytics to some database. Farmers already try to do this. In the past, they’re using interchangeable labels that can barely prove themselves to the supply chain, let alone the consumers. NFTs help fix this. Because when you use blockchains and you mint NFTs from this data, the difference maker is that you now have an unbiased and automatic 3rd party that can’t mingle with underling policy.
In NFT land, the farmer can put all this data they collect into a database chain (i.e., public or private distributed ledger). Then you sell that tomato seed as an NFT, where another farmer can look up your proof-of-work, and also grow their same seed using the data from the original tomato. All while using the NFT data to ensure the crop grows and sells as specified by the license.
And just like we saw in the carbon credit system, larger farm operations could run validatory repositories that make attractive rewards for proving this work and the original farmer gets a verified cut of the sales from that distributor.
As a farm boy from Nebraska, to me, that sounds incredible. And not only is it not incredible, it’s already happening. We have projects that help solve distribution like FutureFarm — which sounds like just another food based DeFi Tool, is in reality a full transparent directed acyclic graph of all the required regulatory input in the process from getting the grass to a glass of milk. Got data?
Protect rights of workers through public collective bargaining and consensus
Our society needs unions more than ever. We have a rich history of collectives, co-ops and unions that have always been realized and then subsequently proven wrong or ineffective through processes of manual consensus and antiquated ledgers. But the underlying need exists in society. And I believe we need to accept the NFT to help solve these problems through mechanisms of:
- Fair and open composite bargaining for employee welfare and job security.
- Market driven concessionary dealings to help negotiate wages in return for job placement.
- Non-violent integrative bargaining for mutually resolving disputes and documenting beneficial agreements between interested disputants.
- Open government of distributive negotiation for allocation of fixed resources, such as liquidity funds, software licenses, patents, and other assets distributed between parties.
- Unbiased and inclusive productivity capacity planning for workforce management and corporate team milestones and analytics.
We have no choice but to use the tools we have today. It may not be a perfect solution, but it’s time to drop the implication that machines need to manage 100% of the DAO. Or that it should be fully autonomous. There’s a hybrid approach that rarely gets discussed and it’s time to look at how we can use this model to apply to the current worker’s rights violations epidemic happening across the world today. DAOs are just collectives and it helps to think of it as a cooperative.
On the whole, in the right direction
The difficulties of coordination without this globally accepted standard are impossible to do fairly.
Otherwise, self-coordination policy decisions will end up sacrificing some amount of interest and, without standards, end up hurting individuals, as well as limiting forms of arbitration.
Economic leaders developed the gold standard, hoping the policy itself would become more rational. And as we’ve seen, it has become much more comprehensive.
Just like Bitcoin was an abstraction and evolution of the gold standard to digital currency, we now have seen another expansion in our breadth of internationally accepted “gold standards”.
Which many now argue technologists have abstracted these standards to another breakthrough by providing access to a store of value that we could never reach before: trust-less, non-digital property rights on a global scale.