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Governed by applications

Pacio takes the trustful part of the real world and transfers it to the system. The economy uses two layers of trust:

  • Governance is executed by the parties that have the greatest interest in a functioning network.
  • The system allows direct money transfers between parties that trust each other. Example: a fan donates to her favourite YouTuber.

With this system, we can support trustful relations.
With Bitcoin and other blockchains, protection from attacks is created through the fact that attacks are very expensive and that those who could perform attacks most easily have a financial incentive not to do so. However, this makes the whole system expensive, whereas the Pacio objective is low cost with superior performance. Thus, Pacio takes the “expensive” variable out of the game and replaces it with indirect incentives for users to take care of the system, combined with penalties up to exclusion for anyone who acts maliciously.

It is Pacio’s assumption that economic enterprises which have a stake in the economy via deployed apps will have the greatest interest in such a system since stability, security and longevity are among the best features they can offer to attract and retain customers.

Thus, in the TENDER economy, the governing body consists of application developers or entrepreneurs who participate in the economy, one nominated entity per app, with a finite number of members at a time. As numbers grow, a delegation system will keep the economy manageable. If the interested number of eligible developers is higher than the available positions, members could rotate by poll.

The result: This approach of governance by application developers creates stability, which is in the interest of all participants of the network. This is better than in fiat economies where “stability” is controlled by central banks which can have different incentives than the users of the currency.

Emissions

TENDER funding mechanism

Companies that create applications, goods and services have the biggest incentive for a stable and thriving economy. That makes them the most trusted parties and qualifies them to receive Tender emissions. Since the emissions are a loan, it comes as no surprise that the TENDER economy emits newly minted money to those enterprises that are in need of a loan. For instance, to fund further development.

Tender combines the funding incentive with the process of dynamic money supply. Newly emitted Tender are distributed to economy enterprises who applied for (further) funding up to the point when their funding application is met.

Restricting governance to enterprises who previously applied for funding has an elegant side effect. It strengthens their loyalty to the economy and further increases their incentive to protect and support it.

Paying back the loan, participating in governance and positive behaviour increase the likelihood of being granted funding in the future since funding is granted when a project seems beneficial to the economy. What company would ever forgo a zero-interest loan?