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Deflationary sinks

Deflationary Sinks for MIC Proof-of-Negentropy Economy

Cycle: C-150 \ Author: Mobius Tokenomics Guild \ Source: Grok audit (2025-11-30) — Tokenomics grade target A ➜ A+

Mobius Integrity Credits (MIC) already mint strictly on measured integrity gains. Grok's tokenomics review confirmed the monetary base is coherent but recommended explicit, governance-bound sinks to counter long-horizon supply creep. This note formalizes three complementary sinks that can be implemented without changing the proof-of-negentropy minting core.

Sink Purpose Trigger Destination
Entropy Tax (ETX) Discourage entropic behavior Actions that reduce MII/GI Auto-burn
Integrity Rebate Burn (IRB) Reward sustained integrity, recycle supply ≥5-cycle integrity streaks 50% rebate burned, 50% paid
Cycle-Lock Liquidity (CLL) Reduce liquid supply + stabilize MIC Voluntary lock for ≥3 cycles Locked pool (non-spendable)

1. Entropy Tax (ETX)

A micro-levy applied whenever an actor's Mobius Integrity Index (MII) or Governance Integrity (GI) drops more than 10 bps within a cycle.

ETX = max(0, ΔEntropy) × RiskFactor × MIC_balance
RiskFactor ∈ [0.05, 0.20] tuned by Atlas Sentinel
  • Computation: Atlas Sentinel publishes ΔEntropy per address; Hermes aggregates across services.
  • Ledger effect: ETX is burned immediately; event recorded in mic_transactions with type BURN_ETX.
  • Appeals: Citizens can request JADE arbitration when they believe the entropy spike was due to Sentinel disagreement.
  • Governance knobs: RiskFactor, ΔEntropy threshold, and eligible events are voted via MIC quadratic voting.

2. Integrity Rebate Burn (IRB)

Citizens who increase their rolling 5-cycle average GI receive a rebate that is automatically split between payout and burn to create structural deflation.

MIC_rebate = κ × max(0, GI_5cycle - GI_baseline)
Payout = 0.5 × MIC_rebate  // transferred to citizen
Burn   = 0.5 × MIC_rebate  // destroyed at source
  • κ (kappa): Dynamic coefficient derived from treasury liquidity; bounded between 0.1 and 0.35.
  • Baseline: JADE maintains historical GI baselines per citizen cohort (maker, reviewer, sentinel, etc.).
  • Verification: Requires multi-sentinel oracle attestation (ATLAS + AUREA + ECHO). If oracles disagree, rebate is paused and logged for manual review.
  • Outcome: Recycles MIC to loyal, high-integrity actors while shrinking circulating supply proportionally to improvements.

3. Cycle-Lock Liquidity (CLL)

Voluntary lockups that reward citizens for staking MIC to specific missions or public goods.

  • Mechanics:
  • Citizen chooses lock_duration (3–12 cycles) and mission_id.
  • MIC is moved to a mission-specific escrow contract and marked non-transferable.
  • Upon unlock, citizen receives original MIC plus mission yield (if funded) while 10% remains locked as systemic reserve unless unlocked via governance vote.
  • Deflation lever: Each lockup removes MIC from liquid circulation; the reserve tail (10%) stays locked unless the mission completes with GI ≥ target.
  • Cycle-lock liquidity ratio (CLR):
CLR = Locked_MIC / Circulating_MIC
Target: 0.12 ≤ CLR ≤ 0.20

Maintaining CLR inside the target band ensures enough dry powder for crisis response while dampening speculation shocks.

Oracle Hardening

All three sinks rely on consistent oracle data. We adopt a median-of-three approach:

  1. ATLAS: Structural GI/MII telemetry.
  2. AUREA: Behavioral drift + ethics telemetry.
  3. ECHO: Time-series integrity pulse from reflections.

The final value used for ETX/IRB/CLL is median(v_atlas, v_aurea, v_echo) per block. Divergence >25 bps freezes the sink execution and escalates to ZEUS.

Implementation Roadmap

Phase Deliverable Owner Status
P0 Data models in mic.schema.json for ETX/IRB events Integrity Core ☐
P1 Sentinel adapters publishing ΔEntropy + GI streak metrics Atlas Sentinel ☐
P2 Ledger contract upgrades for burn + lock tracking Civic Protocol Core ☐
P3 Dashboard cards (Grafana + Cathedral) showing ETX/IRB/CLR Ops ☐
P4 Public disclosure + policy brief Economics Guild ☐

Grok Score Impact

Grok recalculates tokenomics on three axes: scarcity discipline, incentive clarity, and oracle resilience. The sinks move each lever measurably:

Axis Pre C-150 Post C-150 Evidence Source
Scarcity discipline B (implicit burns only) A (ETX + IRB + CLL) Chaos sim tokenomics/sim/chaos_seed.json
Incentive clarity B+ A (rebate split codified) MIC policy brief §4
Oracle resilience A- A+ (medianized sinks) .gi/consensus-* variance logs
  • Score projection: AUREA expects +0.02 GI from the sinks alone once telemetry is live across three cycles.
  • Regression plan: Each sink exposes Prometheus metrics (mobius_entropy_tax_burn_total, mobius_cycle_lock_ratio) so Grok can re-grade from live data rather than manual reports.

References

  • FOR-ECONOMISTS/ECONOMIC-MODELS/mic-currency-model/README.md
  • FOR-ECONOMISTS/ECONOMIC-MODELS/debt-entropy-unification/
  • docs/07-RESEARCH-AND-PUBLICATIONS/tokenomics/MIC_v2_overview.md

“Negentropy must have an exhaust pipe. These sinks turn order creation into a disciplined cash flow instead of unchecked issuance.” — ATLAS Sentinel