Creative coordination is defined by an interplay between interactivity, co-creation, creative value discovery - estimating or predicting the value of a new creative idea, means allocation (funding, exposure, distribution) and reciprocation in the form of financial incentives attached to intellectual property rights.

With the digitalisation of our economies, innovation in arts, culture, engineering, science have taken a central role in our daily lives, increasingly driven by social consensus on creative value. Modeled according to standards, business practices and policies established during the industrial age, our infrastructures need to be rebuilt in accordance with this new era of the creative economy.

Many models have been developed during our exploration phase, and the most successful ones combine human expertise and data from the internet. The exponential growth of artificial intelligence and blockchain technologies provide the building blocks for a fully integrated and standardized model for creative coordination, where value is produced, measured and distributed to communities in real time and at scale.

Enter Newcoin.

A new infrastructure for creative coordination

Until now, creative value was a subset of the economy, where creative workers would need the financing, promotion and distribution from risk-averse, high leverage industrial corporations. The modern era was dominated by utilitarianism and cost efficiency, but when industries ran out of cheaper labor and faster machines, growth came through advertising, with a succession of enhancements from public relations to algorithmic influencer marketing on social media.

The exponential automation of manufacturing (machines->robots) and services (software->AI) is now liberating humans from repetitive industrial occupations, opening a new postmodern, post-industrial paradigm where creative value supersedes labor value, also known as the creative economy.

The creative economy is forking in two main models:

Creativity serves the attention economy: advertising campaigns, click-worthy articles, reels on TikTok, advertorials, influencers… where audiences are considered as consumers from which a conversion rate and average basket enables advertisers to reach ROI goals.
Creativity as a replacement for the attention economy: jewelry lines, premium content, newsletters, zines, NFT drops… where audiences are directly spending towards the creators themselves, and potentially sharing success by purchasing creative assets earlier.

The two models are co-existing, where creatives will spend money on bankable designers while getting paid by bigger, more mainstream brands for product placement.

Natural evolution is a progressive replacement, where reliance on advertisers will dissipate and revenue will flow on a peer-to-peer basis, between innovators themselves, to the edges of the creative economy.

This transformation requires reshaping the financial and information infrastructure, adding a reciprocation layer on top of the Internet, where all stakeholders can contribute, claim ownership over the value they produce and own fractions of the infrastructure itself. We are about to peacefully distribute the means of monetisation to creative communities, one block at a time.

Solving the paradox of creative value discovery

Me: If it’s creative, it’s not popular yet, therefore no measurement of value.

Also me: If it’s popular, it’s no longer creative, therefore no creative value.

New intellectual property value is defined through social consensus between the most competent nodes within a creative network. Competence is also defined through social consensus, either by rewarding good predictions, or in real time on a peer-to-peer basis.

"Trendy is the last stage before tacky."
— Karl Lagerfeld

A profusion of methodologies have been invented to discover creative value, involving humans, statistics and tools, to identify and support emerging creators. Let’s explore a few of them:

Analogue approaches

Communities of experts coordinate through the practice of their profession to identify trends, support creators financially, with their network, knowledge and share their success.

Disciplines	Movie	Fashion	Tech	Art
Subsets	Genres: Action, Comedy…	Trends: Hipster, Streetwear…	Buzzwords: AI, blockchain…	Movement: Cubism…
Valuation method	Producers, casting directors, agents, distributors, broadcast programmers.	Buyers, stylists, showrooms, fashion federations, agents, magazine editors.	Angel investors, incubators, accelerators, VC firms, analysts, tech bloggers.	Curators, agents, patrons, gallery owners, gallery commission, art dealers, art fairs, art collectors.

These methodologies for creative coordination, while relevant, present some limitations:

the pool of talents is limited to the reach of the agents
the barrier to entry is high due to contractual and administrative overhead
the capacity for small teams to evaluate and reciprocate fairly at scale is limited due to inevitable biases and other forms of favoritism, at the expense of quality
the disconnection from highly coordinated digital audiences, forming an increasing gap between professionals and organic digital communities

Digital approaches

Disciplines

Social posts

Web pages

Music rights

Paywalls

Subsets

Hashtags: #meme, #ootd…

Collections: News, Videos…

Genres: jazz, trap, techno...

Topics: lifestyle, tutorials...

Valuation method

Followers count, appreciated by agencies, advertisers, sponsors and audiences.

Social media and search engine scoring: PageRank, TrustRank, EdgeRank algorithms.

Play count on radios and streaming services calculated on a per-ratio basis.

Amount of subscribers, LTV, MRR, monthly growth, churn/retention rate...

These methodologies are much more open and coordinated with audiences, but reward primarily the creators that embody the attention economy:

Social media algorithms and, indirectly, paywalls, reward content that drive clicks and screen time, while penalizing originality.
Search engines, especially PageRank provide a great sense of expertise with domain authority, but are focusing on attention and relevance, not creative value.
Music rights valuation systems are easy to game, with the support of industry insiders and good marketing.
They are still limited when it comes to reciprocation between stakeholders: early fans and believers deserve to be rewarded for the heavy lifting of talent discovery and support.

With the rise of digital formats, the necessity to apply industry-specific approaches is diminishing, while the incentive to blend them keeps increasing, as cross-disciplinary, transmedia creative production is exponentially more valuable.

A publicly owned protocol enabling the valuation, financing, reciprocation and distribution of creative value universally and on a peer-to-peer basis will inevitably outcompete fragmented, industry-specific approaches due to multi-dimensional network effects.

A new kind of database

For each bank account, recording the ownership of assets such as money or stock requires financial institutions, lawmakers, judges, lawyers, police, army, banks, accountants and all the energy consumed by those agents. These activities are costly in money and energy, which increases the barrier to entry for emerging talents.

With distributed ledger technologies, we are reducing the cost of securing transactions and ownership, enabling a new range of economic interactions that were not possible before.

It means inviting the 2 billion unbanked people to a global market for creativity where everyone has a chance, no matter who they are or where they were born. It means granting the right to transact to migrants, refugees, farmers whether they live under democratic or dictatorial regimes. It means increasing the pool of talent able to contribute with their creativity.

Already solved by Bitcoin

Consensus on asset existence: eg. Status Report of U.S. Government Gold Reserve
Consensus on asset value: eg. money, shares, commodities…
Consensus on asset ownership: eg. bank account, gold certificates…

To be solved by Newcoin

Consensus on attribution: eg. patent, copyright…
Consensus on reciprocation modalities: eg. barter, fees, stock options, loan, royalties…
Consensus on reciprocation standards: eg. taxation, capitalism, socialism, donations…
Consensus on reciprocation value: eg. price discovery, creative value discovery, supply/demand…

The recent developments in web3 are providing the building blocks for this cross-industry, universal coordination layer, based on newly identified primitives:

tokens such as the ERC-20 standard on Ethereum enable the accounting of units of value which can be used for vouchers, loyalty points, rewards and weighted governance
stake pools used in DeFi to provide liquidity and automated market maker mechanisms
DAOs enabling collective decision making based on sets of rules encoded into smart contracts
NFTs which are tokens proving the authenticity and singularity of a specific digital asset

The knowledge produced in the continuum of creative coordination is unequivocally the most valuable asset in this new paradigm, considering its infinite impact on primary, secondary and tertiary economies.

Eg. AI robot workers and free sustainable energy will come from inventions and the coordination of talent and intellectual property.

Reaching the required level of global coordination in this collective process will require a standardized economic layer on which an infinity of experiences can be built. A layer between apps and the Internet, forming a network effect similar to CloudFlare or Facebook, but publicly owned, credibly neutral, and therefore a decentralized public good.

The flexibility, immutability, standardization trilemma

“The background story for when Ethereum was starting to be formed, was that this was just the time when the idea of a blockchain beyond Bitcoin was just starting to gain legitimacy. [...] At the beginning, you had single purpose blockchains, you had Bitcoin for currency, Namecoin for domain names. You would have like single purpose protocols, like colored coins for issuing assets.

The second step is what I call the Swiss Army knife protocols. So a Swiss Army knife protocol basically says, well, here’s a list of 25 different applications that we’ve identified as being important and let’s build a blockchain to support all of them.

Mastercoin was one example of what I call the Swiss Army knife protocol. And the problem with the Swiss Army knife protocol is that two weeks later, some 14-year-old teenager in Finland comes up with a 26th application and then you have to go hard-fork the protocol.”

— Vitalik Buterin, The Tim Ferriss Show (#504)

Since the early days of blockchain, use case diversification beyond digital cash, the question of flexibility vs. immutability has been a challenge.

Application-specific blockchains

Initial concepts involved application-specific blockchains: blockchains such as Mastercoin, BitShares, OpenBazaar, Steemit etc. that would provide a limited set of features encoded into the blockchain.

Upsides of the application-specific approach:

light and optimized code
highly customized for the computational needs
the application does not compete with others for computation and storage
computing resources needs can scale linearly with predictability
the lack of virtual machines reduces the layers of security and therefore makes them safer

Tradeoffs for the application-specific approach can be summarized as a lack of flexibility in terms of design, which was an important factor at a time when all the primitives for blockchain technology had yet to be discovered. It was impossible to guess, back in 2014, all the innovations that would come out of general-purpose blockchains, such as DeFi, DAOs, AMMs, stake pools and all the nuances of design discovered through iterative processes built on virtual machines.

By proposing a turing complete, general purpose blockchain where developers could build anything, the Ethereum blockchain and alternatives following the same model have provided almost infinite flexibility.

The shortcomings of the general purpose approach

The status quo for blockchain technology is a diversity of layer-1 blockchains hosting virtual machines on top of which smart contracts can be deployed. This approach was ideal for exploration and expansion, but present major trade-offs:

Custom smart contracts are expensive and risky to produce
Custom smart contracts and data schemas fragment users into data silos
Custom smart contracts require developers to build custom backends and clients
Users are unable to interact across different DApps
Liquidity and investability are fragmented in siloed markets
Blockchains are less scalable due to the multiplication of levels of computation
Most layer-1 blockchains attempt to be a “faster Ethereum” multiplying the amount of siloes
The multiplication of layer-1 and custom smart contracts are exponentially increasing the fragmentation and complexity for end-users
You may own your data and assets in theory, but in practice, those assets are unusable when you jump to another dapp with different contracts and data schema
Each fragment represents a new opportunity for early investors to dump and move on to the next fragment.
The blockchain consensus algorithm is operating separately from the DApp layer, missing major opportunities to integrate real-life events into its consensus mechanism.

Similar to industry-specific methodologies, this duplication and fragmentation of approaches is causing infrastructure waste and limits the democratization of web3 technologies.

Another factor has changed that made this transformation possible, which is the transition from server-side to client-size computation. The sophistication of front-end development has increased the level of flexibility for developers to build different user experiences with a similar backend, reducing the need for the sophistication of queries on the API and backend side.

^[1]

The paradigm shift for internet software development, combined with the knowledge acquired in the past decade of iterations in crypto are providing the soil for a new architecture to emerge: a composable web3 where backend and front-end are decoupled, with a standardized economic layer between the Internet and applications.

Newcoin Protocol, the flow of creative energy

Coordinating creative value discovery with universal licensing models on a publicly-owned infrastructure, Newcoin enables the registration and distribution of intellectual property rights through DAO tokens, programmable and investable NFT licenses for real world and metaverse applications.

Combining the elements of prediction markets, governance, tokens, automated market makers and NFT standards, Newcoin Protocol allows creators, fans, curators, investors, to produce, define, invest and monetise intellectual property by reaching consensus on its value and sharing success.

Newcoin Protocol is designed to cover most of the economic interactions between innovators, in most of the jurisdictions for most of the industries, by proposing a standard infrastructure for creative value coordination.

A design-aware blockchain with built-in financial reciprocation

Unlike turing complete blockchains, standardized smart contracts on Newcoin are either running on the system layer or on a monitored virtual machine, and deployed according to the will of the community through the MainDAO. The blockchain is therefore aware of its own capabilities at a system-level, which enables more interoperability through an open standardization process and integrated mechanism design between the consensus algorithm and real world applications.

Once a new contract is adopted, a single instance is running and shared by all the application developers building UIs on top of it.

This approach solves the problems identified earlier:

Developers can build decentralized applications without having to learn complex smart contract languages. Any developer can trigger smart contracts and pull data from the blockchain using Typescript, Java or Rust.
Since the smart contracts are designed and deployed by the community, significant resources can be allocated in audit and security, at no cost for the developers who can focus on customer-facing features and facilitating user onboarding.
Now that all participants in the network rely on the same smart contracts, networks are interoperable, assets are portable and liquidity is amplified across the whole chain. An NFT minted inside game A can be used inside game B and purchased in NFT storefront C.
Unlike the “faster Ethereum” approach, the Newcoin Protocol will operate as a meta-protocol where the standardized smart contracts will be replicated across popular blockchains such as Polkadot, Ethereum, Polygon, Binance Smart Chain, and expand the single market with identical features, allowing developers and users to choose their favorite network and benefit from the liquidity network effect provided by third party bridge providers.
Asset originators and holders will be able to transact easily across all the applications and blockchain networks.
Due to the linearity of data schemas thanks to the unique smart contract approach, users have one balance for each pool and one asset registry, which optimizes computing power and provides scalability.

A composable web with multi-dimensional network effect

While the economic layer requires standardization, experiences, depending on industries, formats and media require diversity. It is therefore crucial to enable different layers of composability from the blockchain to the end-users.

System smart contracts

The smart contract layer provides the trade routes and rules underlying transactions between all network participants. They are reliable commitments shared by all the nodes according to which specific data exchanges are executed. Standardized smart contracts increase the interoperability and composability of the stack, as all the endpoints lead to the same data schema.

Backend tooling

Complex smart contracts such as SubPool and NFTs store data on the Newcoin blockchain, making it challenging to access anything other than the network's basic data directly.

In the case of NFTs, we can perform basic read operations on the contract, such as obtaining the owner of a specific NFT, obtaining the content URI of an NFT based on its ID, or obtaining the total supply, because these read operations are programmed directly into the smart contract, but more advanced real-world queries and operations, such as aggregation, search, relationships, and non-trivial filtering, are not possible. For instance, if we wanted to query for NFTs held by a particular address and filter on one of its attributes, we would be unable to do so via direct interaction with the contract.

To obtain this data, you would need to process every single transfer event that has ever occurred, read the metadata from IPFS using the Token ID and IPFS hash, and then aggregate it. Even for these seemingly straightforward inquiries, an app running on a browser would require hours or even days to respond.

You could alternatively create your own server, process transactions there, save them to a database, and then add an API endpoint to access the data. This solution, however, is resource heavy, requires maintenance, introduces a single point of failure, and violates critical decentralization-related security features.

Indexing blockchain data is a time-consuming and challenging task. Blockchain aspects such as finality, chain reorganization, and uncled blocks further complicate this procedure, making it not only time demanding but also conceptually challenging to extract accurate query answers from blockchain data.

Backend tooling like Newgraph addresses this issue by indexing and enabling fast and efficient querying of blockchain data and providing APIs as a service with a Proof-of-Stake Membership model where developers have to stake into a SubPool to benefit from the service.

UI SDKs and themes

Due to the standardization of smart contracts, most of the applications and games will call the same APIs and therefore the incentive for developers to build and contribute to open-source SDK projects intensifies.

Unlike general purpose smart contract platforms where each DApp calls singular functions, any open-source client built for one DApp can be partially or entirely reused by other developers, whether it’s a game or a social application.

And because the UI layer is coordinated as open-source projects by the whole ecosystem, the incentive to add a theming layer is increased, forming a network effect around UI development, tooling, design components and themes, that can be shared by all developers contributing to the Newcoin ecosystem.

User data portability

Beyond the economic layer provided by smart contracts, application developers may want to allow users to port their data such as friends lists, like history privately and securely between backends. Newcoin Protocol enables such an architecture by providing on-chain encrypted data storage with opt-in and opt-out features.

Standardized smart contracts

NRC-1 Tokens

The infrastructure token is the $NCO token, which can be used to purchase computing resources such as RAM, NET or CPU quotas. It can also be used to purchase $GNCO, which is the governance token used for the MainDAO. Each token added to the network follows the same standard as the infrastructure token, which will facilitate development, transactions and listing on secondary markets such as centralized and decentralized exchanges.

NRC-2 UNS

The Universal Name System is a decentralized identity provider providing user-friendly names attached to blockchain accounts. Universal names are composed of two parts, the username and the extension. Extension owners can sell any username under their extension, therefore being able to monetise their extension. Extensions will be auctioned as NFTs.

Accounts come with two public identifiers and two private keys. The public identifiers are the public key and its Universal Name. The private keys offer two levels of security, the publisher key, which can be used to log into applications, update content but are not qualified to sign transactions. Only the owner key is allowed to sign transactions and can issue new publisher keys in case it may be compromised. The owner key is the ultimate level of ownership of a UNS ID account on the Newcoin Network.

NRC-3 Socializer

The socializer contract forwards any fungible tokens an account receives to a predefined list of accounts with a predefined split share. Ideal for programmable royalties split between creators working on a common project, selling NFT collections and licenses.

NRC-4 MainPool

newcoin.pool contract swaps $NCO for Governance NCO with a ticker $GNCO, locks $NCO and distributes fees automatically according to the stake fee distribution structure. $GNCO tokens are minted after the lock and are burned when $NCO is unlocked and recovered by the owner.

NRC-5 MainDAO

newcoin.dao contract is the MainDAO in charge for making infrastructure-level decisions, in particular related to:

the allocation of MainDAO treasury to fund specific proposals
the deployment of new Standardized smart contracts

NRC-6 SubPool

newcoin.pools contract swaps $GNCO for Licensing Credit Tokens LCT, which represent a fraction of ownership for all the assets owned by the treasury of the pool, especially all the $GNCO staked by the SubPool creator, their fans, clients and patrons.

NRC-7 SubDAO

newcoin.daos creates DAOs on top of existing SubPools, using the tokens of each SubPool as a voting weight mechanism. The SubPool founder is automatically the custodian of the SubDAO and can review proposals and veto them before they get submitted to the DAO.

The types of proposals include:

Adding and removing members from the DAO whitelist
Buying NFTs with treasury funds
Buying Tokens with treasury funds
Inflating/deflating pool tokens supply
Pay workers with assets from the treasury

NRC-8 NFT assets

The NFT assets contract can be used to

create a new collection with custom schema
Mint, burn or transfer NFTs
Mint backed NFTs holding tokens
Direct sale/purchase of an NFT between two users

NRC-9 NFT Market

Buy and sell NFTs with market mechanisms such as fixed price listing, auction, providing stake-based, manual white-listing mechanism and fair launch features.

NRC-10 Encrypted data storage

Send encrypted direct messages to any UNS ID (1:1), create a public/private channel (1:many) where users can send messages. The decryption key is dependent on the receiver's private key. In case of 1:many, the key is posted within the group chat initially where only invited users have access.

The Internet-of-Intellectual Property (IoIP)

Social vesting

Social vesting enables a new kind of relationship between a creator and their audience where everyone has vested interest in the success of a specific product, service or profile. Social vesting turns any fan, user or customer into a co-owner of the output through the value capture of the SubPool tokens, producing an alignment of incentives between creators and early believers.

Vested apps

As an alternative to advertising, paid subscriptions and in-app purchases, the users of an app need to prove they own a required amount of SubPool tokens from the application publisher in order to access it.

Vested patrons

Many services today allow early believers to benefit from a discount for participating in the conception of goods, content and services by pre-purchasing them via web 2.0 platforms.

What if, on top of simply paying or pre-paying access to such goods and services from creators, patrons could actually own a currency that would increase in value as the success of their creator increases.

Vested communities

Vested communities require participants to prove they own enough of the DAO Tokens of that community to access their space. Communities can be private chat groups, online events, conferences or membership to clubs.

NFT Creative Licenses

Connecting NFTs to the real economy via licensing will capture value beyond crypto-collectors and market makers, bringing consumers and businesses to buy NFTs with a purpose beyond collecting and trading. Once this bridge between the financial and the real economy has been established, all the value produced by creators and their stakeholders becomes useful, and crypto can start “eating the world”.

“Software is eating the World.”

— Marc Andreessen

Universalizing licensing would require linear unification between nation-states and their legal framework, which is unrealistic at least in the near future. The Newcoin NFT licenses, however, provide a fallback for cases where digital activities are completely lacking even informal or semi-formal mechanisms for creatives and their clients to automate micro-agreements and enable, at minimum, useful forensics instruments.

Enforcement can also be undertaken by private platform providers as part of their platform policies in exchange for trade agreements or increased value perception by users.

Eg. A platform that enforces licenses and copyrights as part of their user policies would increase the interest from creators, brands and partners, which would drive more activity to their platform.

Licensing Credit Tokens

In exchange for staking Newcoin, investors and patrons receive rewards based on the success of the pool. Licensing Credit Tokens can be used as prepayment discount mechanisms to purchase future licenses, to access apps, games and creative content, or as voting rights on the SubDAO attached to the pool issuing the tokens. It turns innovators and their early adopters into a vested community with skin in the game.

For example, if Alice is a jeans designer and creates a pool, Bob who staked into Alice’s pool receives $ALICE tokens and rewards when Alice grows in demand for her jeans designs.

Licenses scope and pricing

Creative Commons	By default, every NFT will be licensed under the Creative Commons standards.
Territory & time	The license can be allocated on a per-country basis or worldwide, with a start and expiry date.
Exclusivity	A license can be exclusive or non-exclusive with a defined or unlimited amount of copies.
Manufacturing rights	A license can provide manufacturers the right to produce and sell designs provided by a creator.
Machine learning training	A license can allow machine learning producers to use a dataset to train a model or run algorithmic operations.
Stock asset	A license can provide rights to use a media as stock photo, video or any other format.
Licenses pricing model	Licenses can be priced based on current owner preferences defining the price, a direct offer or through an auction mechanism following the NFT market features.
Payment options	Creative licenses can be paid according to a one-time payment, a recurring payment where the license has to be renewed,

Application-level use cases

Within the constraints imposed by the standardized contracts and tokenomics, most of the use cases for creator-first social media, marketplaces and metaverse applications are covered, while remaining highly interoperable and forming powerful network effects across the ecosystem. Due to the high interoperability and portability of assets, users are shared between all applications which offer different “views” on the same decentralized social graph.

Decentralized social network

Based on UNS IDs, decentralized social profiles display on-chain and off-chain data, and link to assets owned by each member. Users have SubPools on which they can stake $GNCO to benefit from the success of their fellow creatives. The social platform and some of the sub-networks use Proof-of-Stake Membership models based on each SubPool to grant access to members who prove they own the token of that specific member or community and get access to content for free.

Unlike traditional social networks, social apps built on Newcoin have built-in sybil resistance and nuanced layers of censorship resistance, where content could be banned from a specific application, while remaining accessible and usable on other social apps.

Open Metaverse

A game developer can build 3D experiences where assets are portable to other 3D experiences, by leveraging the NFT licensing model. Asset producers would be in charge of the medium compatibility, while the economic layer would prove the asset ownership and its authenticity. Metaverse developers can speak directly to the standardized smart contracts via APIs in order to mint NFTs and distribute tokens issued by their DAO. DAOs can both acquire and distribute assets as long as the holders reach consensus. A mobile app where users can customize, buy and sell digital garments as NFTs and build their wardrobe in the form of portable assets which can be used to produce photos, videos or inside the decentralized metaverse.

Licensing platform

A denim designer can sell licenses of their design via a licensing marketplace. The license is configured for a duration, a territory and a usage type. For example, 1000 units can be produced on the German market in the year 2023, and 500 units can be sold as NFTs on the Ethereum blockchain for metaverse use. The market uses the Licensing Credit Tokens where a brand or manufacturer would stake $GNCO into the designer’s DAO and use their influence as a token holder to vote for design decisions they support.

Cloud API DAO

An AI startup allows customers to query their artificial intelligence to perform tasks. Unlike traditional cloud models, each customer must prove they own a token of their DAO. Not only do such customers have a vested interest with the cloud they use, they can contribute to the DAO via feature requests and will encourage other developers and clients to use this API, in their daily life, on specialized forums, at conferences.

Tokenized investment club

A community combines their funds into a SubPool in order to group-buy expensive NFT licenses based on community voting. They can require DAO members to own a predefined volume of tokens in order to join and will buy and sell those digital assets collectively.

On top of that, the SubPool enables the purchase of other SubPool tokens, forming powerful curation networks coordinating on creative value at the inception of an app, game, API or content creator journey, signaling the market that their work is promising and creatively valuable.

Creator-focused DeFi protocol

An interface provides a list of all the SubPools available across the network, with data, charts, indication, AI predictions, anomaly detection etc. allowing investors to stake across all apps and games.

The investor can review the data on CoinMarketCap and stake $GNCO directly on all the pools of the network and maximize their ROI by diversifying across all the applications. For example, they could join a pool run by a DAO purchasing NFTs and sharing profit with their holders, or join a pool attached to a popular social media user, or game developer. Since all the pools' mechanisms are identical, investors can easily allocate their $GNCO to a wide diversity of pools, track, compare performance and contribute to the curation of creative value.

Nocode DAO generator

A no-code platform similar to Snapshot where all activity is on-chain and templates are customisable. The developer of such a platform requires customers to, for example purchase an NFT prior to the creation of the DAO, or stake into the SubPool a certain amount of $GNCO.

As more staking rewards flow to the no-code provider, they can hire more developers, enhance the product and collect feedback from their community.

Computing resources markets

A tool allowing non-technical users to purchase storage for NFTs or CPU for transactions based on the amount of $GNCO tokens they have staked into the service provider’s SubPool or by purchasing and holding resource quota NFTs.

Newcoin Network consensus algorithm: Proof-of-Creativity

The flow of creative energy

Thanks to the design-aware approach, Newcoin has an operating system able to leverage knowledge from smart contracts and economic activity on the app level to perform its consensus algorithm and increase the level of decentralization.

Proof-of-work PoW

The first generation of blockchain uses a Proof-of-work mechanism which secures the network thanks to the scarcity and cost of electricity required for a miner to operate a node. Since it’s impossible for a machine to access and trust the electricity bills of the miner, it requires them to perform energy intensive computation to solve a block.

Advantage is completely removing the human factor.
Tradeoffs are the transaction cost and the inevitable centralisation, by design, due to economies of scale in the procurement of mining equipment and facilities, including cooling systems.

Proof-of-Stake PoS

The second generation blockchain uses a proof-of-stake mechanism where the network is secured using a game theory principle where the more a node owns of the infrastructure token, the least likely they would want to disrupt the network and therefore, instead of spending electricity, validators need to prove that they own the infrastructure token and the more they do, the more they would likely work towards securing the system and operating in accordance with the consensus.

Avantage is reducing electricity cost.
Tradeoff is, again, centralisation by design where nodes with the highest amount of tokens receive even more token rewards, allowing them to earn more rewards.

Delegated-Proof-of-Stake DPoS

The third generation blockchain uses a delegated proof-of-stake mechanism where the decentralization happens on the token holder repartition in addition to the number of nodes. The network can run with fewer nodes, while all participants in the network, even those who don’t run nodes, can participate in the governance process and secure the network by delegating their voting rights to a validator candidate.

Advantages are the increased decentralization as everyone can vote using their tokens, while the infrastructure requires fewer nodes running at the same time, making it the most energy efficient mechanism.
Tradeoffs are that in practice, the participation rate of the token holders is below 10%, mainly due to the fact most holders are traders who don’t participate in the blockchain governance and just want liquid tokens to buy and sell. In addition, centralized exchanges who technically operate the custody on behalf of their clients can use those tokens to vote themselves as node validators.

Proof-of-Creativity PoC

The next evolution in the consensus algorithm innovation is the addition of a flavor to the DPoS mechanism, where in order to delegate their vote to a node validator, the token holder has to prove they are participating in the network in other ways than providing infrastructure and/or money. They have to spend assets that are more valuable than money, for example time, network, speculation or attention.

Newcoin Protocol uses creative energy as a proof of human participation in the network. The creative energy is proven by a mechanism where the token holder has to stake within a SubPool, pay the fees that are automatically distributed to independent Newcoin accounts and make sure those fees are recovered due to the demand for the SubPool tokens as they provide value to customers, patrons and other ecosystem participants.

The SubPool issuers that have proven their creativity based on the amount of $GNCO staked into their pool can then delegate this voting power to node validators they believe are the most efficient validators and are operating from different cloud infrastructures across the globe, providing enough decentralization while keeping the high energy efficiency provided by the DPoS mechanism.

Proof-of-Creativity solves the problem of low participation rate and removes the incentives for exchanges to vote themselves. The approach is similar to the Proof-of-Work algorithm but instead of performing computations, the energy comes from the human social consensus on creative value, which is a domain specific asset with high levels of decentralization, since creativity is infinitely expandable and can’t be owned by one or a group of entities. It leverages the 40 Watts/ hour that the human brain cognition produces.

Decentralization is amplified by the bonding curves that encourage token holders to stake their $GNCO into new, emerging SubPools that have not yet achieved significant traction.

Newcoin market mining

As the main infrastructure token, $NCO is the point of entry to the Newcoin ecosystem. After the 1,888,888,888 pre-mined $NCO have been allocated to the community, team and investors with their linear vesting, the remaining 7,000,000,000 will be mined by different types of stake pools, as rewards.

Like on Bitcoin, miners are rewarded by an algorithmic inflation model capped at a maximum supply. Instead of spending electricity, miners will earn rewards by participating in the governance, security, value, growth and decentralization of the network.

The amount of tokens issued will depend on the $NCO market price, identified through an arbitrage mechanism based on decentralized stablecoins. As investors will be allowed to natively trade $NCO for stablecoins, the Newcoin Protocol will own liquidity and balance its distribution based on the USD price. The Newcoin Protocol is therefore “conscious” of the market reality outside of the chain and will regulate its supply based on smart contracts and its baked-in AMM.

The inflation formula:

As the price per $NCO increases, more tokens are issued and distributed to the stake pools until the max price of 800 USD per NCO and the max supply of 7,111,111,110,400 USD have been reached.

This inflation mechanism self-regulates:

When the demand for $NCO increases and the supply is locked within contracts, the price increases and so does the supply
If both the price and the supply increase, more creatives and workers are motivated to attract stake into their pool to collect the rewards, which increases the quality and quantity of digital assets provided
If the demand for $NCO stagnates or decreases, the inflation is halted, which protects the ecosystem against dilution, until the price hits the linear threshold again

Creative gas fees

Since the blockchain network is secured by a Proof-of-Creativity mechanism, block rewards are distributed to creatives, curators and patrons providing the best skills at identifying creative value. In return for their value, they will collect a fee from all staking events.

The amount of the fee will be a percentage of the value transacted in the swap, in order to keep the creative gas fees affordable for small transactions which can be as low as 100 $NCO.

Generic tokenomics and Mechanism Design

As a consequence of harmonizing smart contracts design across the network, tokenomic models are also generalized to all the applications, providing application developers with cutting-edge practice in terms of mechanism design, trust safety standards inherited from the system layer.

Alignment of interests

The fragmentation observed across the web3 space also produces an architecture that could be considered rivalrous, which seems to oppose the cultural ethos of the space. For instance, each DApp produces lock-ins, due to custom smart contracts, while DApp developers compete against other DApps, and against the very platform they are building on. Developers issue new tokens which inflate the total supply, and require users to swap the infrastructure token against the DApp token.

This inflation/competition works well when the market is bullish and an influx of new users are joining the space and speculate on token price, but is not sustainable as DApp development teams have to sell the infrastructure token they received in order to fund their operations and the utility of the tokens is not sufficient to stabilize the price, producing a negative network effect with increased sell pressure as the token value drops.

Natural progression of web3 is turning rivalrous games into symbiotic network effects, where incentive structures have reduced the proportion of competition to a level where the individual benefit is aligned with the greater good of the network.

Turning users and customers into owners

The most common economic model for web platforms is either a subscription model such as monthly recurring plans or a commission-based model with a percentage of the sales in the case of marketplaces.

Customers don’t own the platform, they seek the highest quality of service at the lowest price with little consideration for the workers and investors.
Investors don’t use the service, they seek the highest (often short term) ROI, with little consideration for the workers and customers.
Workers don’t own the service, they seek the highest payout for the minimal effort, without consideration for the investors and customers.

This “minding my own business” configuration leads to a zero-sum game where for someone to win, others have to lose, and very little attention is given to the betterment of the product or service.

The Newcoin protocol and its SubPool approach turns users and customers into owners who share success with asset issuers. Service providers are no longer charging customers, rather asking them to hold a certain amount of SubPool tokens. For example, instead of charging for an educational platform, the provider would give access to the program, purchase content with the SubPool token and distribute it for free to token holders using a decentralized governance mechanism and everyone, content providers, platform founders and students have a vested interest in this asset.

A shared reserve token

SubPool tokens issued by the Newcoin Protocol are hybrid and behave as:

Liquidity pool tokens, similar to Uniswap, where an Automated Market Maker defines the price of the token based on a bonding curve which takes in consideration the amount in circulation and the liquidity available in the SubPool.
Reflexive tokens, which distribute a fraction of each staking event to the pool treasury, encouraging token holders to hold their stake in order to collect liquidity provider rewards. They are called reflection tokens due to the reflexive relation they inhibit^[2].
Governance tokens, similar to the MKR token from MakerDAO, which are used to participate in decisions relative to an asset collection issued by a creator, developer or community.

By default, all SubPool tokens are backed by the $NCO which is the infrastructure token, used to pay for resources such as CPU, RAM and NET, needed to operate smart contracts and sign transactions. It means for each SubPool token issued, the equivalent in $NCO is locked in the pool which stabilizes the price and protects holders from market manipulations which are so prevalent on small market cap tokens.

Shared liquidity

On top of the fragmentation observed in DeFi, a competition between DEX contracts also produces a fragmentation of liquidity, where many protocols built on the same layer-1 blockchain compete to attract liquidity providers for the exact same assets.

With the Newcoin approach and because smart contracts are provided as part of the operating system, there can be only one liquidity pool per token, shared by all applications. It means instead of creating multiple liquidity pools competing with each other, only one instance is running, saving resources, time and increasing utility exponentially, producing further alignment of interest between all participants in the ecosystem.

Shared scarcity mechanism

Enabling digital scarcity is a primary property of crypto digital assets, and can contribute to value capture, system security (byzantine fault tolerance, sybil resistance etc.) and many other benefits. With SubPool tokens and the AMM bonding curve approach, individual SubPool tokens have unlimited supply which is restricted by the $NCO total supply and maximum supply.

Since all SupPools are backed by $NCO, all participants in the ecosystem are aligned, and the more pools are created, the more the value of each SubPool increases. Unlike the rivalrous approach of having to choose between different tokens, and weakening the ones that are sold in favor of those purchased, Newcoin architecture encourages and rewards coopetition between all asset issuers.

$NCO The Infrastructure utility token

Account creation

In order to create an account, the account issuer will have to pay $NCO for the RAM that will be made available to store the data related to the account. The amount will depend on the supply and demand for RAM and is calculated via the Bancor algorithm. The price per account created should average around 5$ and the cost can be supported by the App developer, the account issuer or the account holder.

Collectives creation

Accounts can decide to create a "collective" account where all the income will be split according to a predetermined percentage, which can be very convenient for collaborative projects involving multiple creators. For example a fashion shooting involving a model, a designer, a stylist, and a photographer.

NFT Minting

The minting of NFTs will depend on the amount of RAM required based on the amount of metadata stored on-chain for each NFT and will range between $0.01 and up to $5 for the RAM intensive assets.

Transaction fee

Each account will receive a quote of 8 free transactions per day which means absolutely no "gas fees" for transactions. Beyond the free per account quota, packages are provided upon staking.

MainPool, SubPools and Creative Gas Fees distribution

MainPool issues $GNCO

In order for $NCO holders to participate in the single market for Licensing Credit Tokens (LCT), they will need to stake $NCO into the MainPool and receive $GNCO which is a governance token issued by the MainPool contract’s Automated Market Maker.

$GNCO can be used to:

Participate in the general infrastructure governance
Stake into SubPools

SubPools issue LCTs

Licensing Credit Tokens are minted by the SubPool AMM when the required equivalent in $GNCO is locked into a SubPool. They are therefore burned when LCT holders desire to unlock and dispose of their $GNCO.

LCTs can be used to:

Support the founder of a SubPool and boost their clout
Acquire voting rights to a SubDAO and vote on proposals
Purchase NFTs and NFT licenses issued by a specific SubPool founder

Creative Gas Fees distribution

When a staking event happens, fees apply that are distributed to different stakeholders to reward their contribution in securing the network through the Proof-of-Creativity consensus algorithm.

A 7% fee is applicable when staking into the MainPool to mint $GNCO tokens

2% are added to the MainPool treasury
5% are added to the MainDAO treasury

A 9% fee is applicable when staking into SubPools to mint LCT tokens

4% are paid to the SubPool founder
3% are added to the SubPool treasury
2% are added to the MainDAO treasury

MainDAO and WorkerDAO

The MainDAO can receive proposals from SubPool founders which can be funded either by sending funds to the SubPool treasury directly, in exchange for the performance of a service, or staked in to the SubPool in order to increase their ranking if they provide a public good that benefits the whole ecosystem. Those decisions are appreciated by all the SubPool founders who can be lobbied by their DAO members.

The Worker DAO collects $GNCO from the MainDAO treasury, which is incremented from staking fees collected across the whole network and the capped inflation produced via market mining. The voting process is directly tied to the native staking model of SubPools. The top 100 pools of each category receive daily $GNCO staking based on their ranking.

The higher the ranking, the higher the rewards. Rewards are added to the pool and the Worker DAO acts as a regular stakeholder of the SubPool. By accumulating stake into highly ranked SubPools from the ecosystem, the Worker DAO progressively decreases the upside for $GNCO holders to stake into these pools as compared to newly formed SubPools with high growth potential.

Workers are categorized by skills, which can be defined by selecting a category upon SubPool creation, and will be ranked based on the total amount of $GNCO staked into their pool.

Investment workers are SubPools operating investment clubs which hold a tokenized treasury with DAO governance rights attached.

Coordination workers are SubPools dedicated to enhancing coordination between the Newcoin Network and the rest of the world. They provide translations, legal support, business development and partnerships.

Culture workers are SubPools producing digital and physical assets relative to aesthetics, identity, media, art or fashion. They sell NFTs and licenses for their work.

Software workers are SubPools created with the purpose of engineering software and services that complement the architecture. They develop SDKs, tooling, and backends.

Application workers are developers and teams building interfaces, applications, games and experiences that speak to the Newcoin smart contracts.

Communications workers are contributing to spreading knowledge and excitement about Newcoin protocol across all communication channels.

Design workers provide UX research reports, epics, user stories, wireframes and overall guidelines that can be implemented at different levels of the Newcoin ecosystem, leading to the formation of better standards of interoperability.

Ethics and safety workers will contribute to the improvement of mechanism design, security, and fairness across the ecosystem. It includes the review and analysis of many forms of vulnerabilities that could lead to potential exploits, and prevent them.

Economic sybil resistance for SPAM protection

Since usernames are scarce and accounts require RAM to be minted with the NRC-2 smart contracts, there is a limit to the amount of accounts that can be created.

This limitation is amplified by the scarcity of the $NCO token that is required to purchase accounts and the computing power required to run them.

Power law resistance

One of the biggest challenges for networked economies is the seemingly unstoppable power law that drives more support towards the most successful agents in an exponential manner.

e.g. The top 1% music artists receive more of the pie than the 99% others, while 1% of their tracks account for the majority of their success.

This effect also known as the Matthew Effect has been observed throughout history and can be traced back to the Bible:

For everyone who has will be given more, and he will have an abundance. But the one who does not have, even what he has will be taken away from him.

— Matthew 25:29

For whoever has will be given more. But whoever does not have, even what he has will be taken away from him."

— Mark 4:25

Pay attention, therefore, to how you listen. Whoever has will be given more, but whoever does not have, even what he thinks he has will be taken away from him.

But the one who unknowingly does things worthy of punishment will be beaten with few blows. From everyone who has been given much, much will be required; and from him who has been entrusted with much, even more will be demanded.

He replied, 'I tell you that everyone who has will be given more; but the one who does not have, even what he has will be taken away from him.

— Luke 19:26

But He gives us more grace. This is why it says: "God opposes the proud, but gives grace to the humble.

— James 4:6

The very same problem is commonly described by artists, politicians and thinkers:

The rich get richer and the poor get poorer.
— Ronald Raegan ^[3]

We will not accept a society in which the very rich get richer, while almost everyone else becomes poorer.
— Sen. Bernie Sanders

The rich will get richer and the poor will get poorer

— KRS One

While this law seems ingrained in our DNA and may have some virtues, it is undeniable that it also presents trade-offs such as preventing newcomers from emerging, which is an obstacle to innovation and the advancement of a creative economy based on a continuous influx of newcomers.

The Newcoin protocol has been designed with a voluntary approach to mitigating the absurd concentration of wealth and attention within those who have been successful one, by forming a more dynamic and volatile free market of ideas, while enhancing exponentially the chances of emerging agents within the ecosystem.

This is achieved by providing an incentive to purchase Licensing Credit Tokens from up and coming SubPools, or Newcoins, from new creative DAOs through a bonding curve. This approach has three main benefits:

It encourages the discovery of new, emerging creators and ideas by providing more yield, leverage and rewards to the agents who participate in social vesting
It makes the network more decentralized and diverse as the stake is spread across the network more evenly, making the governance and participation more robust
It increases the quality of curation by pushing $NCO holders to think and appreciate the qualitative value of content, profiles and apps instead of joining "bandwagons"

The bonding curve contains three main phases:

The pre-launch where the DAO Token price is stable
The activation phase where the DAO Tokens price increases fast, producing an incentive for the early believers
The scaling phase where the returns are diminishing

A DAO of DAOs

One of the main advantages of the design-aware blockchain architecture is its ability to leverage its knowledge of app-level activity into the protocol governance.

Each SubDAO is moderated by its founder and members which provides a more secure, yet highly coordinated micro-entity which can operate at human-scale with proper vetting and produce decentralized KYC mechanics.

Meanwhile the sum of all DAOs gets involved in broader, infrastructure-level, decisions such as voting for DAO workers, block producers, allocating system-wide grants or deploying new contracts.

This governance architecture can be therefore viewed as a DAO of DAOs where a cascade of governance decisions lead to a more scalable and decentralized network.

Price stabilizer

Since PoS Membership amounts are expressed in $GNCO, which is a volatile asset, the price threshold can be optionally and relatively pegged to USD value via an oracle and a bonding curve similar to the way the Ethereum gas fee is calculated.

This prevents a situation where it has become unaffordable for new users to join communities due to the brutal value increase of $NCO on the secondary market due to high demand for the apps, profiles and communities.

Price adjustment curve formula (purple line)

Decentralized moderation

Moderation is a major concern for all social platforms, whether the content is illegal is an easy one, but how about content that goes against community guidelines such as content that could contextually offend a specific community. When it comes to spam and exploits, please refer to the Mechanism design page. For content policy and moderation, four democratic and voluntary models can provide solutions to protect communities from undesired behavior:

App level

While the blockchain layer is immutable and provides complete autonomy and ownership to account holders, Apps are allowed to choose who they accept or reject, in the same way account holders can opt-in and opt-out of each app. This checks and balances enables a more fluid and community-driven approach to content moderation with different approaches competing to achieve the most relevant and successful content policies. Apps are therefore able to filter and organize content by providing different algorithms, different user experiences and enforce blocking between users at the app level.

Decentralized reputation system

As presented in the UNS page, each account issuer has a score relative to the reputation of the accounts issued by them. For instance, if too many accounts issued with the .xyz are receiving complaints from members of the network, the issuer might be penalized by decision of the DAO and would be unable to issue more accounts for a defined period.

Decentralized blacklist

In some cases, an elected council within the Newcoin Governance portal will review and potentially decide to freeze, ban or even delete accounts and data from the RAM by requesting intervention from the block producer through a multi-sig process. This blacklist could be invoked in case of obviously illegal activities. The blacklist would then be provided to all block producers running nodes on the network.

12. Conclusion

The internet will inevitably become a single global market for creativity, blending education, licensing, curation and financing into a peer-to-peer flow where everyone benefits. Newcoin is presenting a novel way to shape this paradigm in a fully integrated, universal and networked way for the benefit of humanity.

It will enable a level of coordination between creators never seen before, via a peer-to-peer support system that maximizes the alignment between niche domain expertise at each edge of the creative economy, and invite to the economy a wider pool of untapped talent at an early stage of their creative process.

With its new way to reward pure creative energy and leverage it to secure the blockchain network itself, it will produce a symbiosis between creatives, the circulation of ideas and intellectual property in an open, yet reciprocal flow of informational and financial interactions.

[1] https://trends.google.com/trends/explore?date=all&q=%2Fm%2F02p97,%2Fm%2F060kv

[2] Levy, A. (1979) Basic Set Theory, Perspectives in Mathematical Logic, Springer-Verlag. Reprinted 2002, Dover. ISBN 0-486-42079-5

[3] Alan Reynolds. "Upstarts and Downstarts (The Real Reagan Record)." National Review, August 31, 1992.