Nico's FARM
image of Hakon Fossmark in Pixabay

Nico's FARM

By SirGerardThe1st | Tokenomics | 8 Nov 2020


A fictional story written for the DeFiFARMer contest

First Part

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image of Mustangloe in Pixabay

 

Florence, Italy, September 15, 1497

 

“Take this as a draft of the report that I have to give to my superiors when they come back for me.

“I was left on this planet as part of the interplanetary experiment O&CI, Organization and Intergalactic Control to collect data and propose an organization system.

“The disorganization of these people is overwhelming. 90% of the people are illiterate and work with no other objective than to feed a monarchical and aristocratic elite that does not work.

“The model I propose is the Pyramid KPRD # 1234/34 of the Reserve for the Organization of the Galaxies, based on 7 levels, whose interrelation I describe below:

 

Level 7: The herd. Made up of 90% of the people. You have to organize them to consume and in that way, give meaning to their work. They must be allowed to vote for their leaders, who must come from the bosom of the people.

Level 6: Governments. Also called politicians. They are elected by the people, covering presidential, congressional, judicial, police, military, and advisory positions. Their power is only downward (to Level 7), because they are totally managed by the higher levels.

Level 5: Corporations. They are the armed forces of the system. They control the manufacture of food, energy, health, communications, entertainment, media, wars, clothing, education, transportation. They order Level 6 to enact laws that benefit them.

Level 4: Banks. They are corporations’ gas stations. They create fiat money and provide it to corporations so that they can handle themselves quietly.

Level 3: Central banks. They seat the money-making operations Banks do on Level 4.

Level 2: International Organizations. Composed of ex-corporate and government executives, they “legalize” corporations, regulating wars, famines, plagues, and economic crises.

Level 1: BIS. Bank for International Settlements. Central Bank of Central Banks. Audit and control the entire pyramid.

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“I will write the full report in the near future, describing each level in depth and showing all its possible ramifications.

“The installation of this system is going to take centuries. They will have to invent things like the exploitation of fossil fuels, electricity, communications, means of transportation, computers, and the mass media.

"I will probably write a book with a complete detail for future rulers, to leave it to these people as a gift before my masters come back for me from outer space."

 

                       Niccolò Macchiavelli, September 15, 1497

 

Second Part

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Image of Claudio Bianchi in Pixabay

 

Buenos Aires, Argentina, May 1, 2020

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@ Romulus && reacted instinctively, when his mother arrived, hiding his computer.

- Why don't you want me to watch what you do? Are you looking at pornography again?

@ Romulus && turned pale, denoting anguish.

- Mom, I have to tell you something, I can't hide it anymore

- Oops, what are you up to?

Mom knew that with two jobs she had to pay for the expenses of the small apartment they shared, she hardly had time to talk to her only 25-year-old son, and that she had watched him grow up without really knowing who he was. That was an unbearable burden at times.

- Are you stuck in some trouble with that bitcoin shit?

- No, mom, it's a secret that dad passed on to me before he died

Mom shuddered. It was 5 years since her beloved husband had died, and in a second she found out that before he died, he shared a secret with her son and not with her.

Mama sat down and said bitterly

- Go ahead, I hear you

 @ Romulus && stood up.

-One day, almost without strength he called me. When I arrived he told me that he knew that in a couple of days he was going to die, and that he had to give me something that the family had been transmitting for centuries. At first I believed that he had hallucinations as a result of his illness, and that he was delirious. But then he pulled out something he had hidden in his clothes. It was a letter, totally damaged. I immediately found out that it had been written 5 centuries ago! It was written by a guy named Niccolò Macchiavelli, who, according to him, was an alien.

Mom looked incredulous at her son.

- @ Romulus &&, are you feeling good? Do you say that we are descendants of Martians?

- I cannot answer that question Mom, but I can tell you that the organization that this guy imagined in that letter, is exactly the current state of the world situation, managed by corporations networked with banks, governments and international organizations, so that corporations are able to prey the planet "legally". And he planned that more than 500 years ago!

- And how did that letter get into your father's hands?

- The family passed it down for generations.

- I can't imagine how that could have happened

- Well, it doesn't matter. The letter is here and Dad gave it to me in my own hands, I did not dream it, here it is.

@ Romulus && reached into a drawer of his desk and brandished it like a sword.

- And what does this have to do with the hiding of your computer?

- As you know, I have been in the crypto sphere for a long time. You also know that, as a Dad, I am an anarchist at heart and I believe in community coordination and cooperation.

Mom sighed. Not only had she had to put up with the antisystem follies of her husband, but also the son of her soul continued with all that speech.

- It happens that in recent times a very significant event occurred. An entire ecosystem was put together that resides in the crypto-sphere, a kind of anarchic jungle that works as imagined by Kropotkin and Malatesta, of full cooperation between the different players and nodes managed by smart contracts, nobody governs the system, the system governs itself, just like nature, just like the universe.

Mom had heard those last names many times over dinner parties.

-       And so?

- The ecosystem is called DeFi. It is wonderful. I'm playing there and the things that happen are incredible. But one night I woke up with a start. What could happen if something unexpected arose in the ecosystem, such as an alien trying to organize the ecosystem in a scheme similar to the pyramid described in Daddy's letter, and subjugate humanity again in the current corporate slavery?

Again Mom sighed.

- And what are you going to do to save the world?

- In DeFi, many components are interrelated, wallets, loans, flash loans, staking, derivatives, synthetics, exchanges, tokens, DAOs, swaps, bets, open markets, oracles. All the players coordinate at the moment without problems. What would happen if someone got to "order" all this and stopped the constant growth of entropy?

- @ Romulus &&, I don't understand anything, what are you going to do?

@ Romulus && took the attitude of a great teacher.

- I am going to program a series of smart contracts that, in successive iterations, make the decisions made by the different components to maximize their benefits, taking into account that the other components are also doing the same thing, but making the entropy of the system tend to infinity, when a point as close as possible to the Nash equilibrium is reached. It is the theory of the Games. Millions of iterations can show the community where the "glitches" are that could cause an alien to go "order" it. I want it messy and spontaneous, and with maximum entropy forever!

Mom felt helpless.

- Lunch is ready sonny. By the way, did you googled our Renaissance ancestor?

-Yes, but I did not delve very much, it seems that he wrote a book called The Prince. It must be a book like the one kids read, The Little Prince…

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Image of Michelle Maria in Pixabay

@ Romulus && had graduated with honors in Computer Science and had never changed his pseudonym. Everyone knew him from @ Romulus &&, and some of them pronounced it in incredible ways.

While working remotely for Emurgo, and being a fan of cryptocurrencies from an early age, his concern grew day by day seeing that huge amounts of BTC were in the hands of a few players called whales, and that they were usually mining pools or large centralized corporations. It also made him lose sleep that the whales that controlled DeFi's liquidity pools made the ecosystems highly unstable.

To make things worse, the advance of dictatorial projects such as Libra, or the JPMorgan currency, or the central bank currencies authorized by the BIS, made his group of colleagues think that something similar to the Orwellian nightmare could be approaching, recalling that the Big Brother did what he did for "the good” of his people.

He had long spent most of his salary, paid in cryptocurrencies, in DeFi.

Is it possible that in all cases, a social technical system tends to the concentration of power on the part of some of the players?

Did the pools in the hand of few miners distort governance? Did the proof of stake mechanism make rich more richer?

@Romulus&& thought that the key was the entropy of the system.

Especially the Harvest Finance model and its FARM token fascinated him with their incredible #BreadToThePeople. But he was unhappy because it was very difficult for small farmers. It is true that it saved them a lot of research work to find the best opportunities, and that that meant a huge saving of gas, but he was uneasy about the possible bugs that could be hidden somewhere in the code.

That was how one night he wok up with a start, remembering the letter that his dying father had given him.

@ Romulus && had specialized in Game Theory and Combinatorial Calculus. The concept of entropy was his vital ethos: the Universe tends towards maximum entropy, so you cannot go against the Universe. Entropy is the measure of disorder of a system. It is a physical quantity that allows us to measure the unusable part of the energy of a system, the one that does not produce work. The greater the number of possible configurations a system has, the more entropy it has. Intervening a system to regulate it in a pretense of "ordering" it, means to lower its entropy, which is exactly the inverse of what the universe does. The more degrees of freedom a system has, the more entropy it has and the more efficient it is. Spontaneous coordination between the components of a system is an order that arises from chaos and tends to the maximum efficiency of the system.

But what is spontaneous coordination?

According to Frederick Hayek, a proficient character from the Austrian School of Economics, spontaneous order is not the result of a deliberate design by any person, but rather of an infinity of human actions carried out unconsciously. Hayek differentiates between two types of orders: the created order, which is represented for example by companies, governments, families, groups of friends. The created order has an identifiable authority and a concrete purpose. And on the other hand there is the spontaneous order, which, as an example, is represented by society, the market, language, the human mind. Spontaneous order is "uncreated." It has no identifiable origin or authority. It is a process of coordination to achieve efficiency. The behaviors that serve a purpose are those that end up being useful and are preserved, shaping social institutions.

A fan of Hayek in his college days, @ Romulus && had always thought that the DeFi ecosystem was the perfect definition of Hayek's spontaneous order, and that Harvest Finance was the most complete interpretation of it.

But something was missing. The whales controlled much of the ecosystem, and @ Romulus && was sure that he had something to do with the fact that the entropy of the whole was not being controlled.

Before working at Emurgo and getting into the world of Ouroboros and Cardano, @ Romulus && had worked with friends developing dApps and smart contracts in Solidity. He then began to code his idea in that language, and he was at it when he was interrupted by his mother and confessed regarding the Renaissance letter.

But after lunch, he thought it would be best to give Cardano and his Goguen Era a chance, with its smart contracts. In this way, his new set of smart contracts, if he was right and they were accepted by the markets, would have the possibility of being much more visible, by shedding the traditional developments on the Ethereum network.

So he started digging into Plutus and Marlowe, and locked himself in for several months to code and launch what he was going to call the "Cardano FARM." OR NICOFARM.

 

Third Part

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Image of antheah in Pixabay
 

Valletta, Malta, November 14, 2021

 

I was asked to write a short chronicle about the presentation we did with my NICOFARM team a few days ago here in Valletta.

There were about 200 people in a pretty messy shed on the docks, that the city government offered us free of charge.

In all this time that elapsed since I started learning Plutus and writing my idea, until this presentation, there was no VCs, no ICOs or premining in the middle, only energy coming from the spontaneous Hayekian order of a 21st century´s crazy cypherpunks group that I managed to recruit with my crazy idea.

We chose Valletta in Malta, for being known as the “blockchain city”, for its Mediterranean magic, and for its proximity to Italy, the land where some 500 years ago the aliens brought down a madman who organized government systems around the galaxy.

Each of the members of my team, included me, paid for their trip to Malta out of his pocket, and it was cheaper to go to Valletta than to Florence, not to mention that the city also gave us free accommodation.

I am only going to present very briefly the Abstract of the NICOFARM protocol and then we are going to announce the first AMA so that they can ask all the questions they want.

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Please remember the original statement from Harvest Finance:

"Harvest automatically farms the highest yield available from the newest DeFi protocols, and optimizes the yields that are received using the latest farming techniques."

The problem that always worried me in a wonderful environment like that is that some players can access benefits that others did not reach, simply because they were in a position to take degrees of freedom from the ecosystem and make it play in their favor, using the information provided by the oracles. So the core of NICOFARM is the entropy algorithm, which we create as a function that returns an integer that measures the entropy of the system, related to the degrees of freedom it has after trying a combination.

The protocol, as shown in the previous figure, works like this.

  1. A sheep brings liquidity. He/she does not know which is the best combinatorial option of all the listed activities.
  2. By choosing the number of activities he/she want to test, NICOFARM groups with combinatorial calculation according to that number.
  3. The NICOBLASTs are then launched. Each NICOBLAST is a possible combination that arises from the "n" times iteration of the activities combined in variations, permutations and combinations, with "n" also being chosen by the sheep. For example, if the sheep chooses an amount of "3", a posible NICOBLAST could be: borrow in such pool, with that money buy this synthetic in that protocol and stake it in this wallet. The iterations continue until "n".
  4. Once each NICOBLAST is finished, the entropy algorithm returns the corresponding entropic number and saves it.
  5. Once all the NICOBLASTs have been tested, the median is chosen as the key number of the stored distribution.
  6. Then the protocol chooses only the NICOBLASTs whose entropic number is above the median.
  7. Then, copying the original Harvest Finance algorithm, it tests the selected NICOBLASTs, which are the ones that make the system have the most degrees of freedom, processes the combinations and chooses the one with the highest return.

Moral: The sheep has the best return on the money he/she provided, with the right combination, which also ensures that the general system cannot be controlled by an alien who wants to "order" it.

It is as simple as that, although the math involved is very hard and strict. Combinatorial calculation is complex and can be energy and time consuming. That is the next challenge for the team. The Cardano platform favors us a lot in that regard, and we are very happy to test these smart contracts on this blockchain.

We were audited by Quantstamp and it seems that everything is fine.

In a few more days we will be with beta in the market.

Thank you all for your support and trust. All of this was inspired by a letter written more than 500 years ago. But that is another story.

 

                                         Valletta, Malta, November 14, 2021

 

 

 

Disclaimer. This fictional story is absolutely made up by me. In no way did I mean to disqualify the great philosopher, creator of Political Science, Niccolò Macchiavelli, who I still consider one of the most brilliant minds in the history of mankind (although I think it goes without saying that I don't like politicians at all ).

 

 

Thank you for reading!

 

 

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SirGerardThe1st
SirGerardThe1st

Franchise veteran, Dapps developer, DeFi evangelizer, Bitcoin and Ether since a long time


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