☄️ Market & Mechanics
In this post, I discuss the market & mechanics associated with the ☄️ protocol.
This article is also available on Mirror here.
If you’ve been following the past posts, I discussed the motivation & background behind the ☄️ protocol. Typical protocols in this new paradigm tackle the disintermediation of banks & the general banking & finance industry with protocols like Sushiswap & Uniswap that ‘take on’ typical exchanges; Aave & Compound that ‘take on’ lending; Yearn that ‘take on’ investment funds, etc. This has now moved into making a lot of this new liquidity more efficient and less wasteful — away from liquidity mining programs and towards protocol owned/controlled/rented value with the likes of Olympus, Tokemak, Fei, Rari etc. The next stage involves ‘taking on’ the creators’ sectors (i.e. audio & video podcasting; blogging; streaming, etc.) with protocols like Glass, Mirror, Theta, etc. and gaming sectors with P2E games like Axie, Star Atlas & Illuvium; guilds like Yield Guild, Merit Circle; carbon & climate financing like KlimaDAO, Regen, Toucan, EdenDAO, etc. and this is just the start of the disintermediation.
☄️ protocol is attempting to do this but in the space sector using an open-source approach very much similar to software & internet projects that gave us FOSS, internet & email protocols, encryption, etc. The history of the space sector started with war & weapons manufacturing and that culture has virally imbued within a sector that loves the ideals in fictional verses like Star Trek, etc. but fails to deliver. This culture of being siloed & surveilled isn’t condusive when it comes to protecting our planet & environment. In the case of the space environment— our orbits. Let me remind you again, what this culture which started with the “Cold War”, spanning over 70 years is preventing us from solving…👇
Just today, the Russian Federation launched an anti-satellite missle test which created debris that has a strong likelihood of hitting the International Space Station and the Chinese Tiangong Space Station among other satellites we use on a daily basis.
And this is not the first time — the U.S., China, India and Russia (again) have done this in the past.
We’re still trying to agree & work together on the human impacts of climate change — we are far from there. And while we’re trying to work together on that, another problem is brewing as shown 👆— one that will be harder to solve over time. By the time we figure out working together on tackling the effects of climate change, we look to our skies to see a myriad of stars at night — but they won’t be stars, rather satellites and/or space junk.
This is the purpose of the ☄️ Watchtower protocol — to curb such behaviour by creating a new money lego by creating an open-source risk-pricing market.
Markets
If you’ve read the prior post, you would have come across the concept of Conjunction Assessment (CA) and the process associated with CA in three steps: (a) CA event screening; (b) CA risk assessment and; (c) CA mitigation.
The aim of the ☄️ protocol is to be these steps in the form of three separate and coupled foundation money lego markets, starting with CA risk assessment — a globally crowdsourced auctions market to help price risk of spacecraft & junk collisions.
Risk Assessment (RA) Market
The risk assessment market is rather straightforward and consists of a global crowd of data scientists (or) Guardians. Guardians are provided with curated CA event screened data and all they have to do is calculate the Probability of Collision (or) Pc. This is very similar to the platform Kaggle or if you’re more crypto-native, Numerai — but unlike them, would be decentralised & eventually be governed by a Decentralized Automated Organisation (or) DAO. While the concept of a DAO is not new and have come along quite a bit since The DAO as well as the tooling, it’s the most optimal tool to govern a truly global effort, as an ostrumocracy (yeah, I quoted myself something I never thought I’d do 🤦). The ☄️ protocol would have a progressive decentralisation approach, very similar to other projects in this sector. This is not the first attempt to work on environmental and regenerative efforts using crypto-tooling — others include TEC, Klima, Regen, etc. focused on regenerative economics based on Elinor Ostrum’s work, carbon offset markets and regenerative agriculture respectively.
Being experimental in the initial version — the RA Market consists of two roles apart from the protocol smart contracts themselves. An active role which was mentioned above — Guardians and a more passive role for the moment — Watchers. Watchers are organisations involved in SSA (or) Space Situational Awareness. This was mentioned in the prior post. Watchers provide curated data feeds along with their perspective on the Pc score for that particular CA screened event. Not all watchers are involved in calculating Pc, some are just involved in surveiling the skies via radar and cataloging data while some are also involved in risk assessment too. The best way for the laymen to think of Watchers — they are data engineers that sense, aquire, manipulate & curate data for the data scientists/Guardians.
Guardians are given a time period well before the Time of Closest Approach (TCA) to attest whether the Pc is above or below the threshold — normally a conservative 1 in 100,000 (or) 10e-5. Guardians have no obligation to submit their modeling, although that option may be included. Once Guardians are ready to submit their attestations, they are required to attest true or false along with their Pc score estimate.
An estimator is used to determine the overall Guardians’ attestation & Pc score. This is compared to that handed in by the Watcher(s) as a comparision to finally determine a Pc score and attestation to the owner/operator of the satellite that can perform a risk mitigation maneuver (RMM). As the platform & process matures, this step of Pc comparison with the Watchers’ Pc perspectives will be phased out. This finalised score can be used in a composite score to price risk, in near real-time, for potential use cases such as insurance being one of them and debris markets’ financing similar to the carbon offsetting & climate financing sector we have today (creating hyper-liquid markets).
Mechanics
While modeling the mechanisms is currently in an evolving process, there are three broad requirements for the ☄️ protocol itself:
- The protocol’s main purpose shall be to ensure sustainability of the space environment — ensuring an equilibrium is maintained.
- The protocol shall achieve the above requirement by being open/transparent with the option of privacy for those that require it, permissionless and decentralised.
- The protocol shall be highly available 24/7/365.
Distributed Frontend Mechanism
This mechanism exists to fulfill the second & third requirement to ensure access to the auctions market are always open and highly available by ensuring the distributed nature of the frontend of the ☄️ protocol itself. While decentralisation is normally referred to the security of the protocol, distributing the frontend ensures diversification for a multi-chain future for the inclusion of future chains with higher Nakamoto coefficients.
This mechanism will be detailed in a more specific post but as a brief, Frontends (FEs) are incentivised by acquiring a portion of the emissions of the governance token. FEs can sell these token (if they require) at a slight premium to ☄️ protocol DAO treasury. This creates an incentive for anyone to host a frontend. On the other side of the equation, anyone can buy the governance token by bonding to a token liquidty pool pair and selling that bond to the DAO treasury to acquire governance tokens at a slight discount. The roles associated with both sides here would be for those that are either crypto-native and/or savvy enough to host a frontend. This mechanism ensures economic security of the protocol via its FEs.
RA Market Mechanisms
Currently, there are two mechanisms & four actions associated within the RA Market. The mechanism design work here is nightly and will most likely change after this post.
Risk Pricing Mechanism
The basic premise of this mechanism is to help attest whether a Pc score is above or below the threshold of 1 in 100,000 (or) 10e-5. Guardians are required to attest to this while having their governance tokens staked (see next mechanism). This ensures skin-in-the-game behaviour as those that fail will relinquish their tokens to the DAO treasury that will subsequently be burned. Those that succeed will increase their personal stake in the governance token giving them more utility within the DAO. There are two actions a Guardian can take here in the configuration space:
- Attest True: Attest to whether the Pc threshold is greater than 10e-5.
- Attest False: Attest to whether the Pc threshold is lesser than 10e-5.
There are issues of probability dilution when calculating Pc where for example, a false attestation can actually be true. To counter this phenonmenon, Watchers provide their Pc score and attestation (as mentioned above) as a form of comparison to ensure reliability.
Staking Mechanism
As mentioned above this mechanism ensures Guardians can perform bond and burn actions to their tokens and claim, respectively. While they are bonded, they are competing to attest a true or false of the Pc threshold score and submitting their private beliefs on the Pc score. On completion of the competition (well before TCA) and after the settlement phase, they can burn-to-unstake and claim their winnings or lose and have the opportunity to compete again on another CA screened event. There are two actions a Guardian can take here in the configuration space:
- Bond-to-Stake: Bond their governance tokens to the staking contract.
- Burn-to-Unstake: Burn to receive their governance tokens and automatically claim any extra tokens if they win that round.
RA Market States
To provide a basic understanding of the system-level states for the market where system here is referred to the Risk Assessment (RA)Market. The system currently consists of four states namely:
- Zero State: This is a time invariant state where Guardians register, get educated if necessary on Pc calculation, etc. This can happen at any time irrespective of when a competition is being run.
- Init State: This is where Guardians await for a CA screened event, its data and initial parameters are set for the competition such a prize pool, competition time period, etc.
- Execution State: Once the CA screened event trigger changes to true, the competition commences and Guardians have to attest and submit Pc scores within the alloted time period. On submission, they are required to bond their stake which will be locked until the settlement state, attest and submit a file showing their Pc score estimation.
- Settlement State: This is the final state where Guardians are allowed to unstake with or without their winnings. Once this state is complete, this CA screened event is closed.
There is a Dispute Resolution State in between the Execution & Settlement States that will be included as Dispute Resolution is a large (~80%) of Space Law and I’m not a space lawyer. So, if you are a space lawyer or looking to become one, focused on dispute resolution, drop into the spacing guild discord and we can chat more.
Anyways this is where it ends for now, if you are keen to contribute to this FOSS project, get in touch via Twitter or drop into the Discord.
If you’d like to be involved in building this out or have more questions, get in touch. Best way is either via twitter or discord.
