How these Mechanisms Create an Economic Flywheel

It is an idealized prototype of an economic flywheel mechanism, intended to be pedagogical rather than precise in detail. It visually illustrates how the protocol self-regulates and aligns the incentives of the three main parties - markets /bonds, Staker, and the ORIGIN Policy Team. The model shows how implementations can generalize the economic forces of supply and demand to match or offset runaway resonances in the market.

● Supply Increases→ Price Decreases

● Price Decrease→ Low Premium

● Low Premium → Price Increase (as Price Returns to Standard Multiple of RFV )

● Price Increases → More Bonds/Sold

● More Bonds/Sell → Higher APY

● Higher APY → More Demand/Staking(3, 3) ·

● More Demand/Stake → Price Increases

Why is this Economic Flywheel a Virtuous Cycle?

Decentralized Finance ( DeFi) Economics is:

How does value creation in decentralized finance start?

Where does it come from?

What constitutes economic productivity in decentralized finance?

What economic benefits does decentralized finance produce?

The essential issue is:

a.) How do we break the cycle of capital flows in DeFi?

b.) How do you connect DeFi to the broader financial system?

c.) How do we clarify the source of economic value in DeFi?

Only by answering these questions can decentralized finance become more than a vestigial art form. It is elevated to the status of legal, economic production activity.

The Reserve Asset Treasury Model or "Protocol Owned Liquidity" model initiated by ORIGIN provides the first answers to these questions through risk-free or intrinsic value familiar from traditional finance. However, it takes different forms in decentralized finance.

The primary value basis for creating a flywheel is internal coordination, which can be summarized as:

● Because internal coordination (staking) has significant returns;

● Then price coordination (bonds) will gain significant returns;

● Then treasury assets (income) will increase significantly;

● This ensures that internal coordination will reap significant rewards.

This virtuous cycle relies on internal coordination as the basis for economic productivity in the specific digital economy.

The third element beyond supply and demand - internal coordination (generalization of demand) - allows ORIGIN to exercise policy leverage and control the composition of the Treasury to offset the runaway irrational reflexivity of market forces. It gives investor confidence that LGNS staking will continue to be a profitable financial strategy. This third element paradoxically breaks the vicious cycle and lays the foundation for a virtuous cycle and substantive reflection (rather than irrational reflection) that benefits the market. Through internal coordination, ORIGIN can self-regulate and autonomous market conditions for itself and the entire ecosystem of interdependent, interoperable protocols.

To have an adequate theory of economic productivity in the digital economy, we must understand what is internal

Coordination ( 3, 3) has a good description and explanation, just like economic productivity. And well explained

explains why it is more important than price coordination (1, 1).

The ORIGIN economic flywheel model is a set of sophisticated automatic adjustment mechanisms designed to balance supply and demand and suppress uncontrolled market fluctuations. It regulates through steps that increased supply causes prices to fall, low prices stimulate increased demand, and then prices rise. When prices return to baseline levels, bond sales increase, further increasing annualized yields (APY) and attracting more demand and stakes. This cycle continues to strengthen itself, and through the synergy of bonds, stakes, Treasury, and deflationary assets, the balance of token supply and demand, price stability, and the security of treasury assets is achieved. Our model is like a balanced weight in the hand, which can fine-tune the economic activities of the entire agreement to ensure balance and controllability.