ARCC as the Incentive for the Social Proof of Work Network

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ARCC as the Incentive  for the Social Proof of Work Network

Users are incentivized to participate in this decentralized socio-economic reporting network by being issued ARCC, the Asia Reserve Currency Coin, for each act of participation. Users are essentially ‘mining’ ARCC by providing the ‘Social Proof of Work’ (i.e. filling in the socio-economic surveys). 

This act of ‘Social Proof of Work’ mining has two functions of (i), being an incentive for the integrity of the network’s relevance in terms of quality, significance, scope and depth of data and (ii), as the object of inclusive debt-free capital access. 

As a network incentive, ARCC needs to have some type of value, but as a basis for long-term capital acquisition for the user, it needs to have clear value proposition. 

This creates a virtuous circle that if ARCC has a clear long-term value proposition, then it will also act as a strong incentive for participation in the network, which in turn, strengthens the conditions for ARCC’s value proposition (i.e. via the effects of increased adoption).

IBMR.io will issue ARCC as an ERC20 token, but ARCC will derive its monetary value proposition as a macroeconomic stablecoin regional ‘crypto-reserve currency’. 

Most stablecoins are being pegged to a respective fiat currency’s value. The current main utility and adoption of stablecoins revolves around its targeted usage in trading pairs on crypto-to-crypto exchanges. 

Whereas, with ARCC, the utility is as an incentive towards the anti-fragility of the Social Proof of Work network’s own existence and integrity. ARCC’s future utility is its mass adoption as a ‘store of value’ that can be mobilized for future entrepreneurial capital investment and business development beyond secondary exchanges. 

As such, ARCC will instead have a monetary policy mandate to steadily maintain a moderate positive price trajectory in real value on secondary exchange markets, over that of a currency peg. 

This is accomplished by having a sovereign wealth fund structure for value creation which is dependent upon a currency reserve structure with a direct inflow of funds from regional investments and mass adoption for productivity.

ARCC Value Proposition as a Macroeconomic Stablecoin Crypto-Reserve Currency. 

As the goal is economic development through decentralized financial inclusion, each participant will only be incentivized to acquire ARCC if ARCC can reasonably show it will meet the expectation of being a significant long-term asset. As such, we have structured ARCC as a macroeconomic stablecoin ‘crypto-reserve currency’ and a ‘micro asset’. As a ‘crypto-reserve currency’, ARCC would be of value’ and transactional currency hedge of sorts. In emerging characteristics of foreign currency. 

For example, for governments and use the US dollar as This is accomplished national foreign A ‘foreign their own, used other currencies It does the USD, EURO with the most Taiwan and China to protect their own domestic currency attack.

In the case of a currency nations can use their foreign currency reserves to by buying back their domestic currency with their own domestic currency may depreciate, appreciate, and thus be used to defend their as export economies, China and South Korea have approximately 3125 396 billion,10 respectively, in equivalent USD for foreign currency reserves, while the USA has only 125 billion in their currency reserves (as they are considered the main global reserve currency) Venezuela had less than 10 billion USD equivalent as of March 2018, and with an extremely devalued unprotected currency. 

A foreign currency reserve can then interact with the market to either buy or sell its foreign currency to manage their national fiat currency’s value, according to the national fiscal policy. Yet, simply having a foreign currency reserve is insufficient for the task of managing a state’s fiscal policy. 

Part of the equation, which is missing with many stablecoin discussions, is that the trades between the reserve and the market to manage supply and demand pricing for stability is simply not sufficient enough for a currency to be used outside of the crypto-to-crypto trading markets. Rather, for a macroeconomic stablecoin consideration, the inflow of how a foreign currency reserve funded is the key consideration.

The current massive increases in foreign currency reserves in Asia were a result of the response and trauma suffered during the is discussed more in detail in part 2, but countries have been constantly funding continue to directly fund their foreign the threat of an attack. The size of the speculations, but as soon as a country starts would-be attackers can start to gain management. As the currency the total value of the currency for others to attack as well. their currency or being used for foreign currency) ultimately can attacks. In the case of Venezuela, a in January 200912 to 9.5B USD in majority of their foreign reserves were from international oil global economic downturn and significantly lower oil prices, national economic management, Venezuela was forced to use their foreign reserves for some type of financial defense. But at under 10B, their reserve was considered powerless. The benefits to spend it further down would have been meaningless as it would have served no strategic purpose. 

Yet, the lesson here is not how their reserves got depleted, but to recognize that the inflow to the currency reserve matters equally as well. To use a very simple tournament poker analogy, your stack matters. 

In tournament poker, once you lose your chips, you are out. But in Texas Hold’em No Limit poker, losing all of your chips can occur in a single hand (as you can go ‘all in’). Having a stack of chips relative to others at your table gives you a significant advantage as none of the smaller stacks will try to go heads-up with you as they could lose their entire stack and be out of the tournament. Thus because of the size of your stack, you are generally free to pick and choose your spots in how you acquire more chips and add to your stack. 

As long as the winning of additional chips keeps your stack at least 2x bigger than anyone else on the table, the strategy is generally straightforward in maintaining your lead. By this analogy, as long as there is a strong inflow of funds to the currency reserve, and the currency reserve constantly accumulates value, then the actual trading mechanism to the market is the most straightforward part to this process. 

Any time that a currency reserve engages the market to defend rather than to maintain a policy there is a risk of defending all the way to zero.14 This model of considering the inflow to the fund is an offshoot of a ‘Sovereign Wealth Fund’ structure.15 A sovereign wealth fund like that of Singapore’s Tamasek16 can initially draw upon the additional cash liquidity of the foreign currency reserve and its investments can be used as inflow directly back to the foreign currency reserve or to the government directly. In the same way, ARCC will have a currency reserve structure that transacts with the market and also have a focus to continually increase its own currency reserve holdings through regional investments. 

This structure is necessary as ARCC has a monetary policy mandate that will look to growth over that of a currency peg for the value of ARCC. Thus, the base value of ARCC may be its cash liquid assets held in the currency reserve, but its alignment and fund inflow from regional investments will provide a valuation range that exceeds just its current holdings.

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