How to Verify the Internal Coordination Theory of the ORIGIN Protocol

The ORIGIN Protocol's rule set includes four aspects: stake (internal coordination), bonds (price coordination), Treasury (reserves), and minting and issuance (stablecoins).

Staking (internal coordination): (3, 3) This is a win-win situation, where both players stake their LGNS Token. In return for taking them out of circulation, speakers receive a compound reward based on the rate of return. ORIGIN DAO's policy team controls the reward rate. (3, 3) The focus essentially states that internal coordination—general agreement, positive-sum, cooperative behavior—is more economically productive than price coordination—zero-sum, competitive behavior. Internal coordination creates a demand synchronization that absorbs economic value proportional to network effects. Price coordination is also a win-win equilibrium but to a lower degree than internal coordination equilibrium. Internal coordination is a summary of economic demand, and price coordination is a summary of economic supply.

Bonds (price coordination): (1,1) is also a win-win situation, to a lesser extent. Bonds are bonds that buyers pay at a low LGNS token from the protocol at market price. The buyer provides another asset (stablecoin, LP token, etc.) to the protocol treasury in exchange for LGNS tokens. The discount is determined by market forces and bond control variables controlled by the policy team. The bond control variable sets specific bond capacity or target limits for most assets the Treasury hopes to receive within a specified period. As bond sales approach capacity limits, the discount on the bonds is reduced to ensure that the appropriate amount accumulates in the Treasury. Price coordination equilibrium is a summary of economic supply.

Treasury (reserve support): Funds from bond sales go into Treasury reserves. These are the reserve assets that support the value of each LGNS token. The risk-free value (RFV) is the stablecoin amount backing each LGNS token minted and sold through bonds or reward allocations. For every LGNS token it mints into circulation, the Treasury must contain this RFV amount of stablecoins. The market capitalization indicator supported by each token is backed by treasury reserves composed of treasury assets other than stablecoins and, therefore, may have greater volatility.

Minting and issuance (stable currency): The algorithmic non-stable currency LGNS tokens are minted and issued into stable currency A through the Minting and issuance agreement. After the issuance is successful, LGNS is destroyed to achieve economic deflation. At the same time, the stable currency A issued and the treasury reserve 1: Phase 1 anchors to form a base of value support.