SORA v3 — Stage II

The next steps in the journey toward a New Economic Order

SORA

Published in

SORA

7 min readNov 11, 2024

TL;DR

SORA v3 aims to make XOR useful for becoming the foundation for a new world economic order
Stage 1 of the SORA v3 tokenomics involved changing the way builders were funded to receive TBCD no longer directly
Stage 2 of the SORA v3 tokenomics brings mechanisms to build up the Kensetsu ecosystem, especially KUSD
An important feature of SORA v3 Stage II is that Kensetsu USD (KUSD) will now be used to fund BUIDLers in the ecosystem; new VXOR will no longer be created, and it will be phased out of use in the future, with the VXOR buy-back-and-burn migrated to KUSD instead.
KUSD will now have its peg maintained by the full faith and power of the SORA ecosystem; 10% of the reminted amounts of VAL and PSWAP will be used to buy back and burn KUSD, and a treasury of 100 billion TBCD will also be initially created to maintain the peg (10% of the reminted VAL and PSWAP will also be used to buy-back-and-burn TBCD, to reduce the TBCD supply over time)

SORA v3: Part Deux

On our journey to create a New Economic Order for the world, we must adapt to a changing world and constantly prepare to take advantage of every opportunity. Compared to the plethora of muh crypto tokens out there, SORA is the best positioned to achieve the dream of creating a practically usable cryptoeconomic system (as opposed to a speculative vehicle) — an ecosystem that facilitates high growth and rapid human advancement.

Given the current state of the world, like it or not, even cryptoland is dollarized. That means SORA must also provide access to tokens at par with the dollar if we want to increase market share. Fortunately, Kensetsu (SORA’s version of MakerDAO) is a natural way for us to provide this access to our users.

However, given the low liquidity for Kensetsu assets up until now, especially KUSD, there haven’t been any good options for SORA users to access stable USD values. So, to build the SORA economy into one that is useful in daily life, we, as an ecosystem, should work to maintain the peg of at least KUSD so that there is reliable liquidity for a token with dollar value, which is the current world standard (until XOR takes over).

BUIDLing NEO

Creating financial software demands the highest quality code and repeatable processes; otherwise, it cannot be reliably used. Teams that BUIDL in the SORA ecosystem are expected to deliver the best results and have consistently proven themselves. However, professional teams cannot be expected to work for free, nor should they. Because we are still in the BUIDL phase of creating the SORA economic system, we should pay teams that work in the SORA ecosystem in a unit of account that is readily understandable, namely w.r.t. dollars (USD, also known as cuck bucks).

So, as part of the improvements to SORA on our journey to v3, KUSD is now proposed to be used to pay builders. To create the necessary KUSD and have it maintain its peg, it is important to use only hard collateral (not soft cats😿). For now, this means using TBCD as collateral. Even though we will need to mint a lot of TBCD (one hundred billion to be exact) to lock in Kensetsu vaults to mint KUSD, these TBCD won’t actually be converted to XOR, so it won’t affect the XOR token supply. It is just important to have secure collateral in Kensetsu vaults to build confidence in the system.

To maintain the peg of KUSD to cuck bucks, it is proposed that the SORA ecosystem use a TBCD treasury to buy back and burn KUSD whenever it goes below the peg. In the future, when there is more demand for KUSD, and the ecosystem has been built up (which can only be done by maintaining the peg), this TBCD will all be burned through a buy-back-and-burn mechanism (a portion of transaction fees), which will also burn the XOR created (XOR is backed by TBCD, so burning TBCD will also burn XOR — it’s a 2-for-1).

Increasing Output While Deflating XOR

There are two principles of economics to keep in mind when creating an economic system:

the principle of economic growth (ΔMV=ΔPY)
the principle of elasticity

Regarding the first, you need to increase purchasing power for economic expansion. Otherwise, there will be crowding out of uses for existing money. Consider a simple example of a small economy with just three people, each having 2 XOR. In this simple economy, there are only 6 XOR, and if you want to build, let’s say, a bridge that costs 2 XOR to build, then that 2 XOR has to come from among the three people in the economy. So, to build the bridge without expanding the purchasing power in the economy, you need to convince people to give up their XOR, potentially promising some large bonus in the future (security).

However, this can be a costly way to obtain funds if a very large bonus has to be paid to convince people to give up their XOR. So another option is to inject more XOR into the economy to build the bridge but then charge some fees to use the bridge to withdraw and burn that XOR later in the future. In addition to lowering the cost of infrastructure development, this simple example also highlights the principle of how the elasticity of purchasing power can be used to provide for production without crowding out other uses of money in an economy, as the original three people in the example can use their funds for different uses, like investing in opportunities that will generate even more wealth in the economy.

If you are curious about how real-world economies work or want to learn more, register for the upcoming SORA Economic Forum on November 20th or watch recordings from previous editions here.

The Vision for SORA V3

We can build a sustainable and self-reinforcing economy by using buy-back-and-burn mechanisms (a portion of the VAL and PSWAP re-mint to go to burning KUSD, while still keeping VAL and PSWAP strictly deflationary, as well as a portion of the XOR network fees paid with each transaction) to help KUSD maintain its peg, with a large TBCD treasury to cover any gaps, with an additional mechanism to buy-back-and-burn TBCD (10% of the remint of VAL and PSWAP — which captures both the use and volume of activity on the network). Through this process, we can create a powerful vortex that will eventually lead to the burning of a large amount of the XOR supply while still creating conditions for financing new output in the SORA economy. Yes, it’s a long-term play, but creating a new world economy that isn’t based on debt and enslavement will take time and have a never-ending share of sceptics and critics.

In the SORA economy, XOR is the predictable monetary base. VAL and PSWAP are on top of the XOR monetary base, incentivizing validators and liquidity providers. Finally, KUSD is on top of the pyramid, the all-seeing eye of the monetary system, reaching out into the existing dollarized world economy. Transaction fees propagate through the SORA economy, like blood pumping, burning some XOR, swapping through VAL and PSWAP, buying back, and burning TBCD and KUSD. Like a fine tapestry woven to perfection, each layer of the economy is thus encouraged to build value for the SORA economy by contributing their work and ideas so that by working together, the entire SORA ecosystem will flourish.

A stable, native and decentralized USD stablecoin will allow builders and community projects to deploy projects with a stable unit of account. Marketplaces and purchases of goods and services will enable real economic activity in the SORA ecosystem and beyond. By working together, we can accomplish anything we set our minds to.

About SORA

SORA is an innovative, adaptive, non-debt-based monetary framework that facilitates economic stability, particularly for financially vulnerable countries. As a groundbreaking platform, SORA exemplifies the potential of blockchain technology in fostering a more inclusive and stable global financial system. Its integration in projects like the Bokolo Cash CBDC or the Palau Savings Bonds signifies a new era in digital currency, aligning technological advancements to achieve broader economic stability and resilience. Through its unique approach and capabilities, SORA plays a pivotal role in the evolution of global finance, particularly by supporting economies that need innovative and sustainable financial solutions the most.

Connect With Us

SORA 𒀭 community: