INTERCOOPERATIVE NETWORK

Documentation Source: economy/README.md

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ICN Economic Model

The InterCooperative Network (ICN) implements a dual economic system designed to facilitate fair resource allocation, prevent abuse, and enable a thriving cooperative digital economy.

Overview

ICN’s economic model consists of two primary components:

  1. Mana: A regenerating capacity credit system for compute and network participation
  2. Tokenized Assets: Support for fungible and non-fungible tokens representing goods, services, and value

Mana System

Purpose

Mana serves as ICN’s primary resource management mechanism, designed to:

  • Prevent Spam: Rate-limit network participation and resource consumption
  • Enable Fair Access: Provide regenerating capacity that doesn’t require initial capital
  • Influence Participation: Allow reputation and contributions to affect regeneration rates
  • Resist Sybil Attacks: Tie capacity to established identities and behaviors

Key Characteristics

  • Regenerating: Mana regenerates over time, ensuring sustained network participation
  • Identity-Scoped: Each DID has its own mana balance and regeneration rate
  • Policy-Influenced: Regeneration rates can be modified by governance policies and reputation
  • Non-Transferable: Mana cannot be directly transferred between identities
  • Consumption-Based: Used for compute resources, storage, and network operations

Mana Operations

Initial Mana → Consumption (Jobs, Storage, Network) → Regeneration → Repeat

Tokenized Asset System

Purpose

The tokenized asset layer enables:

  • Economic Exchange: Trading of goods, services, and value between participants
  • Cooperative Governance: Token-based voting and decision-making
  • Resource Ownership: Representation of physical and digital assets
  • Value Creation: Incentivizing contributions and network effects

Token Types

Fungible Tokens

  • Utility Tokens: Access to specific services or resources
  • Governance Tokens: Voting rights in cooperative decision-making
  • Exchange Tokens: Medium of exchange for goods and services

Non-Fungible Tokens (NFTs)

  • Credentials: Verifiable qualifications and achievements
  • Assets: Unique physical or digital property
  • Memberships: Access rights to specific communities or cooperatives

Economic Interactions

Mesh Job Execution

  1. Job Submission: Requires sufficient mana balance
  2. Executor Selection: Considers both mana capacity and reputation
  3. Resource Allocation: Mana is consumed based on computational requirements
  4. Payment: Optional token-based compensation for executors
  5. Reputation Updates: Successful completion affects future mana regeneration rates

Governance Participation

  1. Proposal Submission: May require mana or token stake
  2. Voting: Can use governance tokens or mana-weighted voting
  3. Implementation: Approved proposals may affect economic parameters

Resource Management

  • Storage: Mana consumed for DAG storage operations
  • Network Usage: P2P communications and bandwidth usage
  • Compute: WASM execution and processing time

Economic Policies

Mana Policies

Economic behavior is governed by explicit policies defined in the Cooperative Contract Language (CCL):

  • Base Regeneration Rate: Default mana regeneration speed
  • Reputation Multipliers: How reputation affects regeneration
  • Consumption Rates: Mana costs for different operations
  • Capacity Limits: Maximum mana balances and usage rates

Token Policies

  • Issuance Rules: How new tokens are created and distributed
  • Transfer Restrictions: Limitations on token movements
  • Governance Rights: Voting power and proposal requirements
  • Burning Mechanisms: Token destruction for deflationary pressure

Implementation

Core Components

The economic model is implemented across several icn-core crates:

  • icn-economics: Core economic logic, mana management, and policy enforcement
  • icn-governance: Token-based and mana-weighted governance mechanisms
  • icn-identity: Identity-scoped economic state and credentials
  • icn-runtime: Economic enforcement in job execution and resource usage

Policy Execution

Economic policies are:

  1. Defined: Written in CCL (Cooperative Contract Language)
  2. Compiled: Transformed into executable WASM modules
  3. Deployed: Distributed and executed across the network
  4. Enforced: Applied consistently by all participating nodes

Economic Sustainability

Network Effects

The dual economic model creates positive feedback loops:

  • Mana Regeneration: Encourages consistent, long-term participation
  • Reputation Building: Rewards reliable behavior with increased capacity
  • Token Value: Successful network usage increases token utility and value
  • Cooperative Growth: Larger, more active cooperatives gain economic advantages

Anti-Abuse Mechanisms

  • Identity Requirements: All economic activity tied to verifiable DIDs
  • Rate Limiting: Mana prevents resource exhaustion attacks
  • Reputation Tracking: Bad actors face reduced capacity over time
  • Governance Oversight: Community can adjust economic parameters

Future Development

The economic model will continue to evolve through:

  • Governance Proposals: Community-driven parameter adjustments
  • Market Feedback: Real-world usage informing policy updates
  • Research Integration: Academic insights on cooperative economics
  • Interoperability: Integration with external economic systems

For technical implementation details, see the icn-economics crate documentation.

For governance mechanisms, see the Governance Documentation.