Introduction to the
SCAO’s Hard Asset Token
written and designed by Klemen Skornisek
Original post: Nov 8th 2022
Last edit: April 29th 2023
A big update is planned shortly
The SCAO Network System
Individual SCAOs will have slight variations in design depending on each use case, but central to the SCAO system is a liquid democracy governance system along with 2 digital assets: the Hard Asset token and the Liquid Asset Token.
Hard Asset Token
Fiat Asset Token
Liquid Democracy Governance
Hard Asset Token
The Hard Asset Token is the Austrian inspired vehicle that is used for aligning incentives and long term SCAO stability.
The HAT acts as the internal utility currency of the SCAO used exclusively by network participants and is NOT NECESSARILY traded on the open market (will vary from individual SCAO to SCAO).
Depending on individual SCAO variables and use cases, the hard asset token is permissionlessly exchanged via a SCAO operated “liquid treasury” smart contract that network participants are authorized to use.
The Hard Asset Token has a hard cap, and the price of each token is the total value of the SCAO network treasury (the common wealth / infrastructure) divided by total token supply.
The token value can (so far in theory) be verified by Chainlink proof of reserves.
Individual, independent network participating legal entities will “mine” the token by depositing a part of their operational revenue as tax, for which these entities may receive the hard asset token in return.
The hard asset token may have various network utility use that depends on each individual SCAO use case (such as usage of common wealth factories, transportation networks, research / conferencing / vacation infrastructure, healthcare benefits etc.). This ensures the token circulation from the “central*” network to the entities and back to the “central*“ network.
*note: remember that the “central” network is decentralized through the liquid democracy governance model in which all entities participate.
Think of the relationship between the SCAO network and its participating entitites’ as the relationship between individual households and their nation - state. Households use the nation’s currency to access infrastructure like education, transportation, healthcare, security, social welfare, all of which are crowdfunded through taxes.
Individual network participating entities are encouraged to HODL the hard asset token since its value might increase in the future as the total value of the common wealth / infrastructure grows. Since network participants have a stake in the growth of the common value, they are also incentivized to participate in governance, research, expansion and general improvement of the system.
Since nothing prevents individual network participating entities from sending the tokens to another address, grassroots exchanges for fiat or other assets may emerge. Whether this should be limited or allowed by code will depend on each individual SCAO depending on custom connections to the Liquid Asset Token.