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Standards

Standards are a magical thing, cutting across both atoms and bits.

How can we use Crypto Incentives to drive open permissionless competition to Improve Protocols that form Decentralized OS?

Mantra

The greatest potential value of blockchain to humanity is an immutable single source of truth

Purpose​

Protocols and standards are closely related but distinct concepts.

  • Protocols are specific sets of rules for making progress in specific field
  • Standards are formally recognized and widely adopted protocols or specifications

Application​

Standards enable composability and interoperability to enable open innovation at the edges.

Evolution​

Science learns of what is possible, Technology converts into know-how, Standards set expectations.

  • The Lindy Effect (Time) and Metcalfe's Law (Adoption)
  • Successful protocols often become standards through industry adoption and formal recognition
  • Standards organizations (e.g., ISO, IEEE, IETF) play a crucial role in formalizing and maintaining protocols as standards
  • Standards ensure interoperability, consistency, and quality across different implementations
  • The standardization process involves rigorous review, testing, and consensus-building among experts and stakeholders

Scalability​

Standards enable scalability by driving consistency, without consistency improvement is guesswork.

  1. Stable
  2. Consistent
  3. Composable
  4. Interoperable
  5. Reliable

The HTTP standard for example catapulted the internet to ubiquity by creating a uniform way to exchange information.

ISO Standards​

ISO standards are agreed internationally by experts in their field. Some of the most popular standards cover:

  • Innovation: ISO-69315
  • Quality Management: ISO-9001
  • Energy management standards to help cut energy consumption.
  • Environmental management standards to help reduce environmental impacts, reduce waste and be more sustainable.
  • Food safety standards to help prevent food from being contaminated.
  • Health and safety standards to help reduce accidents in the workplace
  • IT Security: IT security standards to help keep sensitive information secure.
  • ISO 9001 Checklist

Crypto Standards​

Regulation happens when good standards fail to evolve.

Newer protocols have an opportunity to establish better standards from inception, while older protocols may need pressure to adapt. Engineer to do more with less, by providing verifiable proof that crypto provides greater capital efficiency through better standards and transparency.

Self-Regulatory Proposals​

Need consensus acrosss protocols ecosytem to drive investor confidence through self-regulatory organization.

  • Industry equivalent to FINRA (Financial Industry Regulatory Authority)
  • Self-regulatory efforts could give the industry "a seat at the table" with regulators
  • Voluntary adoption of public company-like disclosure practices by protocols
tip

Eat your own dog food

Financial Reporting Standards​

  • Need for crypto-specific "GAAP accounting" principles
  • Standardized definitions for revenue, costs, and token issuance
  • Regular financial reporting cadence similar to public companies

Investor Protection Standards​

  • Suggestion for crypto equivalent of 10b5-1 plans for scheduled token sales
  • Need for standardized disclosure of conflicts of interest
  • Recommendation for protocols to have dedicated investor relations personnel

Emerging Protocol Practices​

  • Newer protocols beginning to implement standardized disclosures
  • Disclosure of team wallets and allocations
  • Quarterly financial reporting and growth metrics

Related

Financial Standards​

ISO predicts that ISO-20022 will support 80 percent of transaction volumes and 87 percent of transaction value worldwide by 2025.

  • Impact of ISO-20022
  • CESR A periodic rate that measures the average annualized yield awarded to all eligible validators staking ether on the Ethereum blockchain. CESR is derived from new staking rewards emitted from the Ethereum proof of stake blockchain and transaction fees accrued over a one-day observation period.

Web Standards​