Value Control
Last updated
Last updated
In Inverse Economics, two key types of value are emphasized: time and productivity.
Time refers to the duration an individual has held their store of value (saving time), reflecting their contribution to stabilizing the economy's value.
Productivity is measured through tax payments. As more tax is collected, the token supply decreases, which in turn increases increasing the intrinsic value of each remaining token.
The image below illustrates that each unit of store contains a certain quantity of these values.
When money (as a store of value) is traded, the underlying values are exchanged between hands. Some stores may hold more value than others—like a $10 bill containing more value than a $5 bill. While denominations help in transferring and utilizing values, they don't offer complete control over values. At Owy, this limitation is addressed, allowing for more optimal control over values.
With smart contracts, value extraction becomes feasible, opening up various use case possibilities. For simplicity and ease of integration, these values are extracted and tokenized as ERC-20.
Once the main token's values are extracted, the token can still be used or traded as usual, but it no longer retains the economic benefits or privileges associated with those values. The value of these extracted components can be assessed separately from the main token, as their worth is tied to the specific economic privileges they offer. For instance, these values might provide a 10% tax discount on transfers of the main token, but after extraction, transactions may incur the full tax rate.
This can be achieved while preserving the fungibility of the main token, ensuring the system remains easy to build upon. The design allows these values to be priced and arbitraged in trading, leveraging the valuable economic privileges they represent. This, in turn, enables the economy to scale to a new level.
Congratulations! You've now grasped the principles underlying this project. It's time to see these concepts in action with Owy. Let’s dive into the implementation with a closer look at its Tokenomics.
