- XOR is designed specifically for use as a currency in any country because it allows governments to make funding proposals, and mint XOR for productive economic activities via a democratic process
- XOR has predictable price dynamics, making it perfect to power the economic structures of the metaverse while being versatile enough to accommodate cross-functionality
- XOR can be scaled up to serve as an InterPlanetary Economic System (IPES)
XOR, the Gateway to Many Worlds ⛩
As you may have noticed, SORA recently changed its primary tagline from “One World. One Economy.” to Many Worlds. One Economy. As catchy as that sounds, you may be wondering, what does that change entail?
This article aims to explain in three main sections why SORA has changed from focusing on only one world to many worlds, and how it can maintain its one economic posture throughout. As we have published before, SORA aims to be a New Economic Order. This has the potential to scale not only to serve the current cryptosphere and countries alike but also extend into other digital worlds, such as the Metaverse. Far into the future, when humankind breaks through to become a multi-planetary species, SORA can scale with the economy, while still maintaining decentralization as its main characteristic.
Pushing the Boundaries of What DeFi Can Accomplish on Earth
Currencies in most parts of the world are by their nature centralized. Fiat money is issued by central banks and, as opposed to popular belief, it has neither intrinsic value nor functional utility. After Richard Nixon decoupled the US dollar from gold reserves in 1971, fiat money became the predominant system of global currency, but even throughout history, precious-metal-backed currencies always incorporated some form of elasticity in the form of credit. Therefore, whatever value currencies have is a function of the trust in a centralized entity, such as the government, central bank, or other parties involved in the issuance and settlement.
In this system, banks, which in almost all instances are owned by private shareholders, introduce new currency into an economy through lending. When done by many small banks in local communities, the system works, well, but when the system is overly centralized and the decisions about the allocation of new currency in an economy happen without democratic oversight, the economy can suffer depending on the whims and objectives of centralized planners (an in-depth explanation of this by Richard Werner can be found here).
Beyond Bitcoin and El Salvador
With the implementation of Bitcoin as legal tender in El Salvador, there has been some controversy surrounding the practicalities of this decree. For starters, Bitcoin will join the economy of El Salvador as a foreign currency, outside the control of the democratic processes of El Salvador, not as a local currency. This means that the economic structure of El Salvador does not stand to benefit directly from the addition of Bitcoin as legal tender, partly because of its price volatility and no correlation with the economic needs of the country. Additionally, as a consequence of the General Quantity Theory of Money, without the creation of new purchasing power, there can be no increase in GDP transactions (unless there is a change in the velocity of money, which is hard to attenuate in large, mature economies), meaning there can be no significant economic growth using Bitcoin as legal tender.
It is undeniable that the acceptance of Bitcoin is a step in the right direction from the perspective of human freedom. However, although the government claims that it will help with financial inclusion and reduce the costs of services such as money transfers, there appears to be very little benefit in this implementation for the improvement of the economy of El Salvador, as Bitcoin is both expensive to transact and too slow for everyday life.
On the other hand, El Salvador could stand to benefit significantly from the implementation of XOR as its currency, using the SORA economic system to democratically create new purchasing power to finance the creation of new goods and services. Additionally, the forward-guided nature of the XOR price works to curb the price uncertainty and avoid scenarios such as the Bitcoin price dip that was experienced on the day that El Salvador officially implemented Bitcoin as legal tender. Thanks to the SORA Token Bonding Curve, the implementation of XOR could avoid such scenarios, as well as the technical difficulties of using BTC, related to slow block times and high fees. While a transaction on XOR costs cents and takes up to 6 seconds to complete (3s on average), transacting on Bitcoin costs several dollars and takes often much longer than 15 minutes to be confirmed.
For nation states, XOR brings with it all the benefits of a supranational monetary system, but with none of the disadvantages, such as inflexibility or hyperinflation.
Other additional benefits that a XOR-based economy brings to the table include a government’s ability to make proposals to the SORA Parliament to allocate XOR to create new goods and services in the SORA ecosystem, in accordance with the SORA economic model, which is impossible to do with Bitcoin and would be the defining factor when using such currencies at a nation-state level. For nation-states, XOR brings with it all the benefits of a supranational monetary system, but with none of the disadvantages, such as inflexibility or hyperinflation.
Finally, the global citizens, who are the most affected when it comes to financial catastrophes of any kind, will have their voices heard as part of the decision-making process when it comes to the creation and allocation of money. This will allow countries to avoid socially harmful proposals that would dilute the purchasing power of their currencies. The article on the SORA Parliament is a great source of information regarding how citizens will have greater say in the creation of new purchasing power, through a truly democratic process.
The example of El Salvador is only the beginning of how XOR can be a game-changer in world economics, but XOR’s revolutionary uses don’t stop there; there are more worlds to explore…
Enter the Metaverse
The term Metaverse has become a buzzword surrounding many aspects of digital life. Virtual worlds, virtual reality, virtual spaces, virtual insanity, games, and even new platforms for creating and sharing user-generated content are all considered one form or another of the metaverse. All these components are connected in one form or another and these connections form, what we can consider, the interconnected metaverse (there is a great and elaborate explanation on the topic here).
The Pegasus World Kit, a collaboration between JP GAMES, JCB, and SORAMITSU, which uses Epic Games’ Unreal Engine, is a great example of such a platform.
By combining the Pegasus World Kit with other virtual services, it is possible to implement a metaverse platform that is capable of extending its functionality to everyday life by integrating other services. A good example of this is Sky Whale, a virtual leviathan product of the collaboration of the Japanese ANA airline and Pegasus World Kit. It is described as “an interactive virtual platform that will bring the joy of travel and unique online shopping opportunities to audiences worldwide.”
With Unreal Engine providing the visual experience for this metaverse, the question remains, what will be the means of payment for Pegasus World Kit-enabled applications? This is where XOR comes to play.
The SORA community recently approved a loan to JP GAMES, which will enable XOR to become the token that will power purchases within the Pegasus World Kit multiverse. This means that there will be a self-custodial wallet implemented within the Pegasus World Kit that eventually will be interconnected with all the subsequent metaverses that make use of the kit.
XOR is an open-source and fully decentralised token, answering the metaverse’s need for interoperability and data portability.
The use case for XOR in the Pegasus World Kit is quite straightforward — use XOR to make purchases within the metaverse to enable shopping functionality. However, there are more use cases where having a self-custodial wallet can benefit users. Games such as MMORPGs built on the platform could use NFT-based items on the SORA network to provide continuity across games in the metaverse. As these items would be stored in a user’s wallet, they have full control and freedom of what they buy, sell, trade, and use, across a large variety of games and virtual environments (here is a great resource to read about payments in the metaverse).
The SORA community is committed to developing decentralised governance structures based on classical and exploratory democratic principles (such as multi-body sortition), as well as economic/tokenomic models and incentives that balance the interests of a range of economic actors without the need for political intervention (such as the fully automated token bonding curve).
The SORA community also spans disciplines and skillsets, allowing us to build platforms and interfaces that make complex economic functions, like farming and staking, accessible to everyday users. Within the Pegasus World Kit project, we will take a leap from building seamless platforms for economic interaction to contributing to a platform hosting a much broader range of interactions and experiences.
The Sky Is Not the Limit
In the future, humans will be an interplanetary species, spreading throughout our solar system and beyond. With the scientific breakthroughs happening in space transport, this is an inevitability.
The currency of the interplanetary future human race needs to have predictable price dynamics to enable selling goods, either digital or physical, and the tokenomics of XOR allow for this predictability, making it the ideal token to power commerce across the Universe. XOR is computationally efficient enough to enable concurrent real-time peer-to-peer interactions between potentially billions of traders, farmers, token creators, and other users.
As long as there is a need for an economy and allocation of capital, using XOR as a currency across planets in the near future is merely a question of adoption.
There is no limit to where the SORA citizens or members of the SORA Parliament can go. An interplanetary parliament is realistic thanks to the scalability of the SORA network and the decentralized and massively parallel nature of the SORA Parliament. As long as there is a need for an economy and allocation of capital, using XOR as a currency across planets in the near future is merely a question of adoption.
About SORA, Polkaswap, and Fearless Wallet
SORA is a new economic system aimed at creating a supranational multiverse economic system with built-in tools for decentralized finance (DeFi). The SORA network implements a new way of parachain architecture on Polkadot and Kusama network, with the capability to bridge external blockchains (like Ethereum) to the Polkadot ecosystem.
One of the DeFi applications that will run on the SORA network is Polkaswap, a noncustodial liquidity aggregating, cross-chain AMM DEX designed uniquely for the Polkadot ecosystem with boundless liquidity through its one-of-a-kind Aggregate Liquidity Technology (ALT).
Fearless Wallet is a mobile wallet designed for the decentralized future on the Kusama and Polkadot ecosystem, with support for iOS and Android platforms. An awesome user experience, fast performance, and secure storage for your accounts. Fearless Wallet will integrate Polkaswap for easy, decentralized swaps of assets.