US Policy Memo Feburary 24th 2022
Regulating new paradigm shifts in the economy targeting, security and growth, where (DAO) decentralized autonomous organizations and DeFi Applications provides ongoing digital revenue streams for the city, while also generating digital revenue for the participating members.
In this US Policy Memo, there is universal support on the advances in technology in the context of proving individual value and increasing the capacity of the local government and cities.
DAO – is a new type of self-governing network where users can join by qualifying compute resources in pre-calculated conditions and reward systems built into the system or code that the users agree upon-- very similar to a democracy. On this front, DAO and DEFI represent an unaccounted sector existing where we could be providing more security and resources to an institution built for the people, which is the role of the government. In this form of additions, while we live in a free market that is sovereign. We need a framework in place to ensure accountability, fair participation and security. This set of checks and balances and seperation of powers ensures sustainability with endless possibilities for their utility, new opportunities for developers, entrepreneurs, residents and more.
In a DAO, the value is in the decentralization of control and authority. how should we approach regulating such a system? Control of the Decentralized autonomous organization (DAO) assets from the local government and cities should be made fully aware by the state government. At this level is where the provisions and proposals for protocols changes can be adequately inspected and exercised.
DeFi stands for Decentralized Finance and is an alternate financial universe with a steadily growing catalogue of applications that runs autonomously, where users can deposit digital assets and earn returns, borrow, loan money and more still in its infancy the entire market space is currently unregulated and unaccounted when calculating the USA's Gross Domestic Product. There is an opportunity to increased quality of life and economic health across the board as currently there is a total valued locked of about 70 Billion Dollars after seeing an all-time high of 140 Billion Dollars Just in May 2021.
DAO and DeFI Core Principals and Practices
The Core DAO principals of mining to verify and secure the network while gaining a return will continue to exist despite the type of product, lack of government and regulation. There could be number of reasons for not capitalizing on significant changes for growth, a missed opportunity to maximize productivity and train the next generation of revenue earners. The main sections to focus on will be properly accounting, understanding collections and ensuring security of the assets and systems. Properly accountability will be in the form of initial introductions to regulations from the unique and different industries to record accurately.
Some Key Metrics to understand:
Total Value Locked - The total amount of USD being consumed by the DAO on the target platform Daily active users - The unique addresses interacting with the DAO target networks. Market Capitalization- total number of available assets multiplied by the current market price of the assets
With the additional new metrics including Jobs, revenue, spending and debt coverage. We will began making additional contributions toward the economic indicators across the board. With accountability and maximum security being key to long term sustainability and growth as we compete on a global scale. The individual Assets can increase in value and in quantity. Also, through a process called mining which is the practice of validating and creating new blocks and transactions to publish to the DAO network. This is the source of truth that is constantly being challenged for accuracy and perfection.
The USA is missing the additional streams of accountability at a global scale.
As Observed from the Bureau of Economic Analysis from the U.S Department of Commerce there was an introduction of representation of digital assets in which the digital economy also referred to as the Internet Economy or Web Economy. In this representation of digital assets, we have successfully revised estimates of gross output, value added, employment, and compensation for the digital economy as calculated by the Bureau of Economic Analysis (BEA) for the Updated Digital Economy Estimates – June 2021. Further reflection is to understand the increase in transactions and internet services at that time between 2005-2019 by the advances of Information, Communication and Technology (ICT) accounting for 9.6 percent of the current-dollar gross domestic product for the digital economy, also noted that the more traditional industries like finance and insurance account for 7.8 percent of current-dollar GDP.
Introduction into additional security considerations
At the current, human capital, business dynamics, business profile, employment and productivity, and economic well-being are all the brink of even more massive change. There is a requirement to meet the new opportunity of surplus funds available with an addition of a high standard of security and accountability. Interacting with DeFi products as the name suggested is a decentralized engagement that are managed and maintained by the community in embedded protocols within the technology. As we continue to see the release of new DeFi products with emerging products being tailored toward local governments and cities there is an immediate requirement to explicit define what city officials and other administrations are lawfully and morally obligated to adhere to.
Since DeFi Products are not tied to a centralized authority there is an absence of a bank including regulations, restrictions and rights that the users and operators are required to honor. The Defi Products operate solely on the original creator’s vision which could present subsequent challenges in terms of clear and concise restrictions and allowances by city and local governments.
Additional Authority layer exclusively for government participants
Introduction to rules that would govern that activity of the funds that are being provided to the cities and governments in the form of targeting excess transfers, withdrawals and unauthorized access. Users are rewarded for participating in the protocol with a governance token, and users can vote on changes to the protocol, proportional to the number of assets they own. However, Emerging products are allocating a default percentage to the cities and local governments at no cost to the governments. With assumptions that local government are accountable for current budgets and debt. This is information is being polled from the estimations defined in the Digital Economy Estimates – June 2021. The digital economy is composed of infrastructure, e-commerce, and priced digital services. With several potential key elements do not present data on this list, each of these components and the status of their inclusion in the BEA estimates is described in detail with most emerging concepts being omitted for 2021.
Start Calculating DAO with the BEA in determining the GDP
While this online platform is a community whose resources is controlled and decided by rules that have been voted or provided consensus the DAO needs to be integrated as a new topic in the BEA or a new satellite account needs to publish. The DAO has the rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government. The Entity, while having no central leadership. Decisions get made from the participating network members, governed by a community organized around a specific set of rules enforced on a blockchain. The topic to identify is that high value assets and opportunities based on the BEA supply-use framework relevant to measuring the DAO economy many new types of products are drastically becoming available for official government use and we need immediately action to ensure they are handled responsibility.
Anti-Government Liquidation rules: Encourage fair participation
A concept called WITHHOLD WITHDRAW is an idea to be implemented and practiced throughout the DAO’s capital as this will drastically increase and sustained the ecosystem through a collection of checks and balances that further balances out the control and access complimentary toward the vision, mission and long-term growth of the programs. The predictable outcome is the value of the local and city official capacity and bandwidth sees, exponential explosion in resource availability and security. Increasing in Digital and physical resources footprints and opens access to new types of services for the people across an array of industries. The local government and cities will begin to live out a vision of a productivity bright future of opportunity to maximize productivity and train the next generation of revenue earners. The prospects of DAO products will empower the next generation of economic indicators with additional metrics including an array of next generations career opportunities, revenue , more spending and straight forward debt coverage and management.
New Measurements : Sustain growth portfolio: On the DAO networks, there are fund management products that will try to expand your portfolio using a strategy based on return recommendations. This is fully automated, accessible to everyone, and the regulations are built-in Security and Resource availability: the DAO networks are open to qualifying members and furthermore designated entities for government use. All transparent and precisely documented to adhere maximum accountability on the Digital public capital. Ledgers can provide clarity on on-going projects and up-coming providers. This can provide maximum visibility on how much money is being raised this can also be traced to act as a point of truth.
Cybersecurity and Asset Disaster assurance: Decentralized insurance seeks to make protection and resilience more affordable, open, available. Coverage is more affordable, central, thanks to increased automation.
Considerations in regard to security and trust
A counterargument could be in the context of a permissionless trust networks where there could be indeed an incentive for the local governments and cities to influence the users to act on centralized changes to the protocol that are in the interest of the local government and cities that are in participation. With this there is possibility of centralized and coordinated activity of the individuals that participate with adequate rights to propose changes. However, this will always be in the interest of the people, and this is more of a technical system design consideration. As the new sector, will act as supplemental income, there is a strong vision that the DAO will make up a majority of the industry within the few years times span, as we are in the process of seeing exponential participation and growth based on the current tracking rate. In case of an emergencies additional provisions in place that identifies possible bottlenecks as it relates having the ability to liquidate or lack thereof by the local government and cities. Users are rewarded for participating in the protocol with digital platform assets, and users are able to vote on changes to the protocol, proportional to the level of participations. The governments and cities should have stringent guidelines how to interact with such assets.
Security from end-to-end
Next steps are to assess what would be considered secure. Certifying the software and the infrastructure solutions for the local government and cities resources exclusively. This ensures the integrity of government infrastructure and the future projects that will benefit the people as a whole in lieu of the state of emergency because of recent security breaches.
Conclusion:
Opportunities to add additional streams of taxable income is present in the form of internet-native communities. With this great power of additional income and resources also includes greater responsibility. The access to the wallets of the local government and cities will have stringent access control levels that must be approved by the majority of eligible government participants.
At the current time blockchain and decentralized applications and organizations are yet to be recognized and accounted by the United States with much discussion or regulations and taxation issues. This is a challenge that persists across several other countries as the changes are shifting the paradigm of economics. The internet makes the introduction to DAO products and the changes that result available to the mainstream immediately. Users that participate in network also provide security and support for the network in which they own assets on.
While The rules are being embedded into the technology code without having to interface with a centralized authority but rather a peer-to-peer computed and trusted network that automatically and continuously qualifies the members as a valid citizen within the DAO ecosystem. A WITHHOLD WITHDRAW method needs to be introduced into the local government and cities wallets to restrict and guide the movement of the foreign digital assets until there is more accountability in the form of reporting.