Stake Market
Discussion
A market for stake: The key to distributed value
Dick Bryan:
"The stake market ... must encode more than ‘price’ if it is to deliver critical signalling to the network. Stake offered to the market must encode information about the social priorities which will be expressed in the performances and outputs it funds. Stake must carry a value proposition (a verifiable claim that performance outputs create social benefits), not presume a profit proposition. Buying and selling stake is thereby a social debate about value propositions. As staking momentums shift over time, so too does the network’s overall view on ‘what creates value’ change over time. The granularity of information required for this process must be revealed and preserved. In an era of Big Data, it is possible to preserve this information in a way Hayek could not have imagined.
For staking to play this pivotal role of simultaneously funding investment and debating value-creation proposals, it cannot be driven by private wealth accumulation. In this network, staking cannot be funded from accumulated wealth. Staking must be a reciprocal relation between each agent and the network of ‘other’ agents.
The following protocol is therefore critical: to acquire stake in another agent, each agent must relinquish stake in itself. The more an agent wants to acquire ownership of other agents, the more they must relinquish their own stake. It should be clear now why it is critical to avoid confusion with a capitalist stock market.
Further, for staking to be a transparent, network-wide articulation of ‘voting’ on value priorities, reciprocal staking cannot be a barter relationship (a one-to-one relationship); it must be a one-to-many relationship (each agent with the network) through an impersonal, distributed stake market with automated matching, netting, and clearing. William’s review does not feature our specific proposals about an automated staking market, though the general issue arises later, in compatible ways, in the context of his valuable discussion of ‘federated learning’ and data sharing.
So we will briefly follow up on issues of staking, to clarify issues raised in William’s review. Reciprocal staking will see agents taking a financial (and emotional) interest in a range of other performances. They will, over time, come to hold a diversified portfolio of stakes from across the network (interests in different value propositions) both directly and transitively. Indeed, the more stake ownership becomes diversified, the more each agent’s private interests come to look like the interests of the network as a whole, and self-interest is increasingly subsumed into a collective view of ownership.
This vision is key to the network holding open a range of value propositions (not collapsing to a monologic like profit) while the network as a whole nonetheless shares a coherent agenda. The momentum being sought is not a capital market ranking of investment success, but nodes of gravitation on social views of value: not ‘market efficiency’ sorts of criteria, but Eigenvector centrality in a network of influences. The goal is to hold open a range of views about what constitutes ‘value’, and the stake market, with all its comprehensive data, will be a commentary on those values and how they are shifting over time.
The contingency and volatility of the future is what we want to embrace and incorporate into the concept of value; volatility and contingency are not to be seen as distortions of an efficient capital market. Others have written, including recently in this journal (Ecks, Reference Ecks2023; Elder-Vass, Reference Elder-Vass2023), about the virtue of broadening what we mean by ‘value’ in an economic sense and opening it to the possibility of ongoing change. We believe reciprocal staking is a practical means to encode that process: it involves economic commitment to a future that agents are themselves designing in the process of making."