Modular Protocol

While the overarching framework of the protocol — value-preserving coin inflation supported by an on-chain reputation system — are essential for the protocol to work, other components may be interchangeable. To encourage active research and development of the protocol — and avoid unnecessary fragmentation of the ecosystem — we are proposing a modular design for the protocol, where various implementations can operate simultaneously.

In this design the Project Posting and Coin Issuance mechanisms are fixed, but the estimation and validation mechanisms work as a module that can be “swapped.” Each module would then have an associated correction coefficient (relative to the baseline of the current proposed design), based on the accuracy of the impact scores it produces (determined through an ecosystem-wide validation process).

This design would allow simultaneous live testing of different configurations, parameters, and strategies for the estimation and validation module, and promote continuous improvement of the protocol.

The mechanisms and strategies proposed in this paper are therefore just one possible implementation of the protocol. They are presented to showcase how a systematic approach to resolving conflicting incentives among participants in the ecosystem can be implemented. Other strategies — or similar strategies with different parameters — can be implemented to achieve similar results.