Appreciation: The Foundation for a Post-Capital Economy

Subjective Reputation System

Reputation is a core part of many of today’s systems. Most of these tend to use “global” reputations, i.e. where participants have a single global reputation value across the whole community, e.g.

• Amazon star ratings
• eBay scores
• IMDB ratings
• Instagram likes
• Yelp ratings

The issue with global reputation systems is that they are easy to game. There is an entire industry out there generating fake reviews, ratings, and likes.

In contrast, appreciation provides the foundation for a highly subjective, “local” reputation system. This is much harder to game as people can whitelist those that they trust, e.g. through Trust Maps.

In addition, the use of contexts makes appreciation-based reputation highly contextual. Together, this makes for an extremely powerful primitive that apps and services on Espra can use, e.g.

• To identify and reward those that create value.

• To help determine who should have a say, or even the right to use certain resources, in specific contexts.

• To create recommendation systems that are tailored to an individual’s tastes and preferences.

We will also inevitably see the use of appreciation-based reputation in social contexts, e.g. to attend certain parties you might need a high reputation from the perspective of the party host.

Global Appreciation Holdings

The relative amount of appreciation received by each individual is aggregated at the end of every cycle to form that cycle’s holdings, e.g.

The holdings from past cycles are then aggregated into “global appreciation holdings” for everyone, e.g.

Since the appreciation received across different cycles is unlikely to be even, we make use of a spread_window to make it more balanced:

• This defines the number of cycles over which the calculation of global appreciation holdings is done, e.g. 12 cycles.

• Many industries tend to have times of the year when there’s more activity, e.g. the music industry currently releases a lot more albums in September than in July.

  By spreading out the appreciation over multiple cycles, it makes the exact moment of appreciation a lot less relevant, and less gameable by others.

  Otherwise you’d have people releasing things at specific times so that they can maximize the relative amount of appreciation they get, e.g. at the start of cycles.

To update the calculation of the global appreciation holdings at the end of every cycle, we:

1. Gather all AppreciationStatement records posted by all verified adults on Espra for the last spread_window cycles.

2. Apply any AppreciationAdjustment statements as long as they fall within the spread_window.

   We cap the impact of adjustments as the court of public opinion tends to be fickle, and people should be able to depend on their long-term global appreciation holdings.

3. Normalize all of the appreciation given out by each individual. For example, Tav may have given out 100,000 appreciation units, while Alice may only have given out 5,000.

   To make the aggregation fair, each appreciation unit given out by Alice will be valued at 20x against each unit given out by Tav.

4. Tally up all of the normalized appreciation received by each person. This won’t be limited to verified adults, so anonymous accounts and kids can benefit too.

   The resulting percentage totals will then make up the relative appreciation holdings for that particular cycle.

5. By default, the appreciation holdings from each cycle will all have the same weight as each other, and will collectively form the global appreciation holdings.

   For example, if there had only been 2 cycles so far, and Tav had 40% of the appreciation in the first, and 10% in the second, he’d currently have 25% of the global holdings.

6. The relative weight of holdings from past cycles will decay by some decay_factor, e.g. 10% every 50 cycles. This will help newcomers while still providing a “pension” for the older people.

7. And finally, holdings from cycles beyond the expiry_window are completely removed. The expiry_window should be equal to the global median life expectancy.

   This should gently nudge the wealthy towards investing in efforts that increase the median life expectancy.

Once calculated, the global appreciation holdings can then be used by apps and services. Inevitably, speculative models will help people gauge changes to their holdings before a cycle is even over.

Global appreciation holdings should only be used in certain contexts. Otherwise, it would heavily bias people towards only doing the kind of things that would appeal to the most number of people.

But if the use of global appreciation holdings is balanced with the use of subjective appreciation-based reputation, then it’ll act as a counter against the extremes and could help create a more stable society.

Getting Rewarded from Appreciation

While appreciation is useful as a reputation mechanism, it becomes extremely powerful when used to reward people that create value:

• Whenever we mint pecus, Espra’s currency, a matching amount is paid out to all global appreciation holders through global appreciation payouts.

• Whenever an individual earns some money, a portion is paid out to everyone they’ve appreciated as part of the Decentralized Economic Protocol.

• Whenever a TON decides to pay out profits, it is distributed amongst the people who have appreciation holdings in that particular TON.

All of this incentivizes people to engage in the kind of behaviour that gets them appreciated by others:

• Global appreciation payouts will incentivize people to create things that benefit a lot of people.

• Individual appreciation payouts will incentivize people to help not just the wealthy, but also those who could have a big impact in the future, as well as larger groups.

  Since everyone’s appreciation payouts also results in payouts to those they’ve appreciated, money will actually trickle down to those that are less well-off.

• TON appreciation payouts will incentivize the investors, leadership, and members of the TON to focus on generating longer-term value instead of just short-term gains.

  Since TONs will have to allocate a portion to other TONs that they depend on, money will trickle down to innovators who may not be so great at commercialization.

With this, we’ve found a way to turn the intangible into something very tangible — creating monetary rewards for people who create value, but are often taken for granted.

Something that’s been missing in the economy till now.