X DAO

The New World Order Governed By Reputation

V1.9

"In real open source you have the right to control your own destiny"

-Linus Tervalds

TheGreatReset.Finance

Abstract 4

BACKGROUND 5

What is a fair distribution? 5

Why have a fair distribution? 5

Tribal segregation among currency users 5

Political inequality and lack of continued incentives 6

Centralization of information and true privacy 7

Money and its effects on the political system 7

What is decentralization? 8

Why do we need decentralization in governance? 8

Branding 8

Dapps 9

Governance 9

The Agency 9

The Communities Dapp: The Agency for Everyone 11

Defi Suite 12

Cyberswap 12

Market of Zion 12

X Starter 12

Ideas To Incubate 13

Concepts 14

Coins/Tokens 15

X 15

Network structure and consensus 15

Peer selection 16

History Storage 17

Bad actors 17

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Making and receiving payments18

Token distribution 18

XDAO Governance Token 19

Use Cases 19

Token Distribution 19

Hertz 19

Use Cases 20

Deflationary Mechanisms 20

Token Distribution 20

NFT’s 21

Children Of X Storyline 21

Incognition 21

Roadmap 22

The Transition 23

Why should the world transition? 23

What is the transition? 24

Conclusion 24

Core Tenets 24

Final Words 25

Links 25

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Abstract

Centralized systems are easier to build and advantageous to decentralized systems for manyreasons, the most obvious being that it requires more time to agree on truth with even oneexternal party. These advantages are why even a “Decentralized” system establishes a smallerset of stakeholders who are in charge of performing consensus. Unfortunately the methodsused to choose this smaller group tend to be financial, meaning those with the most moneyhave control regardless of if they have expertise in what they’re governing. This paper willexplain the design of self-governing systems which choose their governing minority based onreputation. Once the governance system has been established and is functioning for the XDAO, it will be used in our social media app to manage local communities (A decentralizedversion of Amazon’s neighbors app). After our social media app reaches global adoption we willdistribute our decentralized currency X evenly to everyone. X is designed to be lightweight andrun on cell phones, requiring all users to participate at least a tiny amount in consensus to usethe network. The X consensus mechanism has no central blockchain/dag and allows nodes todiverge on the truth for bad actors transactions without affecting the network's ability to processvalid transactions.

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BACKGROUND

What is a fair distribution?

A fair distribution is different depending on the use of the coins/tokens. For instance inthe X DAO, those who have done the most work to benefit the DAO on the Agency are fairlydistributed the most governance tokens. However, for the X currency, everyone is distributed anequal amount of coins at the start since its purpose is to be used as a currency as widely aspossible.

Why have a fair distribution?

Tribal segregation among currency users

For a unit of value to reach truly global adoption, it must be apolitical and there must bean incentive and ability for all to use it. All people from all walks of life and opportunity must findvalue within it. State currencies have always been tied to the particular tribe of humans that usethem and by using one tribe's currency, you submit to their rules and benefit from theireconomics. Unfortunately even though our tribes have grown exponentially larger over the yearswe still rely on singular rulers or a small group of rulers to make the rules for us. This was truewhen monarchs controlled the monetary supply and is still true today. We have little real powerover them and because of this even in “democratic” societies voter participation is low.Cryptocurrencies up until now have only exacerbated this fact by creating systems where mostusers have provably less power than the oligarchy thus voter participation is so low it needs tobe incentivized. These currencies can never reach truly global adoption as they are merely anextension of the tribes governing body and that governing body's interests. No single tribe canever reach global control and so the answer instead lies within creating a currency untied from aparticular group where everyone is a stakeholder in its success.

With the advent of the internet we can now create this global currency. A currency with adistribution that is unbiased towards any group in particular and thus suitable for adoption by allgroups.

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Political inequality and lack of continued incentives

There are many different cryptocurrencies in the world today but the incentives to build,spread, and use them are misaligned. Those with the most coins hold disproportionately morethan the majority of coin holders and not only control more of the network but will always controlmore by design. This is easy to see in a proof of stake based system such as the one Ethereumis migrating towards. Those with more coins will earn more rewards forever since they arerunning the same hardware and their costs will be a smaller proportion of their reward. Thismeans they will actually retain a net greater reward as a percentage of staked tokens than theirpeers. Over time the small group of whales (those who own 10,000-100,000x the balance of themajority of users) will only control the network more and more. This effect is compounded themore users adopt a cryptocurrency. Due to the nature of buying in at higher and higher prices, ifa coin were to reach 1 billion users from the current tens of millions estimated to use Ethereumthe disparity would grow even greater. Instead of undoing an oligarchy we would simply bereplacing and solidifying it in code.

This remains true of Bitcoin with its proof of work system since proof of work can be seen asproof of stake with extra steps. By design proof of work must be profitable for the coin tocontinue existing long term otherwise no one will choose to mine it. This means that those whomine first will not only earn coins easier and in greater numbers they will also be able to afford tooutpurchase new miners for new mining hardware. Now the largest mining pools define what a“bitcoin” is- the only thing stopping more inflation is the decisions of a few men. Any competingfork can either be attacked with spare hashpower or ignored. If ignored, the fork will simply benamed by the public bitcoin cash/sv/abc/etc. since it has less hashpower than the longest chain,maintaining the miner's definition of “Bitcoin”. Within both of these systems you can argue thatsomeone with sufficient wealth in another asset such as real estate could buy in and own moretokens or hashing power than someone much earlier, however this ignores the overwhelmingmajority of new users who cannot do so. For a service like Ethereum where its goals are to be acomputer and it functions more like a company (trying to get more users and competing withother computing clouds) this is not as important. You invest in Ethereum to invest in it as acompany. However for a currency that intends to be apolitical and reach global adoption such asbitcoin this is detrimental. Bitcoin is essentially shares in an index of the stock of the largestmining hardware companies/farms and nothing more. Due to the longest chain rule, the actualusers of bitcoin can never meaningfully decide the fate of the cryptocurrency. Any attempt tofork the network could even be attacked into submission by spare mining hardware.

There is also less incentive to improve bitcoin, since you know your work will reward those atthe top more than it will you. Those who hear about a currency later may contribute more to theactual protocol but will never by design earn as much of it as those who helped secure thenetwork earlier. In response you will probably choose to create your own protocol.

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Ethereum allows us to create a fairly distributed governance token which rewards peoplewhether they contribute to the project at inception or after many years. We created the X DAObecause the initial “fair distribution” of governance tokens such as YFI is actually more similar toan ICO or even a traditional bank. The handful of people with the most wealth now control thoseDAO’s forever and there are numerous examples of votes that seemed to benefit VC’s morethan the community. This governance centralization means even when votes do happen, voterturnouts are low not just in crypto but around the world. After doing research into this wediscovered that people are aware their vote doesn't matter and so do not feel empowered tovote. Our governance token will be different- it will only be distributed to people who contributeto the project but also has features like decay which eliminate the early bias of other projects.

Centralization of information and true privacy

While the internet has allowed for information to spread faster than ever before, it hasalso allowed for a few winners to control the truth and access to all of that information.Depending on who you are and where you live, your ‘version’ of reality online may differ, eventhough our global reality is the same. These companies/governments become metaphoricalgods of truth, being able to manipulate what is known with censorship and collect any data theywant. For example- before releasing the Coronavirus pandemic announcement, many highprofile officials sold off stock using their early knowledge. In a decentralized system,declarations of a global event such as a pandemic would follow predefined conditions, allowingeveryone to be made aware at the same time. This is why our long term goals includeincubating projects to manage internet routing, search engines, and encyclopedias in adecentralized manner.

Money and its effects on the political system

We are all aware that no matter the political system, the more wealth you have will affordyou more control. In our current representative systems there are political campaign donations,backhand favours, subsidies, etc., which all use money to influence the political landscape. (Ex.The CEO of the Amway pyramid openly admits switching their bribes from the republican partyto the democratic party when the democrats gained power in order to keep Amway in business.)Even in a direct democracy where we enforced a one voter one vote rule perfectly and directlytowards each proposal we know that those with money can buy votes either directly or indirectlythrough marketing/propaganda. By using reputation tokens and requiring the locking of thosetokens in order to vote, we incentivize voting in the interests of the long term value of the projectso that your locked tokens don’t lose value. However there are also times when voting forsomething that benefits those at the top will not necessarily decrease the value of the token. Inthese cases we allow for a revote that is open to a larger amount of the community with a limiton individual vote weight.

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What is decentralization?

Decentralization is a buzzword that you will hear a lot in the cryptocurrency space, but ittakes on different definitions depending on who you ask. For our purposes decentralization isdefined by having no central authority or point of failure, creating a system where as many goodactors as possible can contribute to the voting process. Whether the voting is used to decide theoutcome of a protocol fork or simply the validity of a single transaction. We want to empowercommunities to self manage and intermingle without needing to forgo their rights and privacy toa higher authority(other than the authority of a smart contract).

Why do we need decentralization in governance?

We need decentralization in governance because of the ever increasing user base of thedapps being governed. Without decentralization in governance, the initial foundation or firstfarmers will build the dapp with their own interests in mind over community interests. FacebookCEO Mark Zuckerberg famously stated, “That may be good for the world, but it’s not good forus,” in a 2012 email about the possibility that developers would build applications that used dataabout Facebook users and their friends, but not provide any data back to Facebook. Needlessto say, he understood the value of data for personal profit, but was not as interested in securingthat data for his users, storing Facebook passwords in plaintext at the time. Withoutdecentralization, ideas like an oligarchy that has access to backdoors “for security” can bejustified. With decentralization we can focus our global community on important systemic issuessuch as replacing the war economy, rectifying environmental destruction, and the appropriateallocation of water. Our decentralized worldwide governance system with its own currency willalso solve the transparency issue between taxpayers and where those taxes actually end upgoing. Not only that but compared to a centralized tribal governance system it is much lessfragile and more difficult to topple.

Branding

Our token name X comes from the mathematical usage ofX to represent any amount/number. The XDAOgovernance token was named simply after the X DAOand may be renamed at a future date. Hertz our farmingtoken was so called due to it being the standard unit ofmeasurement already for cpu’s. When using a dapp youpay a fee to miners to process your transaction, you could

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imagine this as if you are spending cpu time or hertz. Our logo incorporates aspects of both YFIand Zcash since we see the X DAO and the X currency as successors to those respectiveprojects.

We have based our project and NFT’s around a Cyberpunk future set in the year 2048. Thistime and branding was chosen since Cyberpunk worlds are dystopias controlled bymegacorporations similar to our world today. Using the stories set in our world, we hope toeducate people on the value of decentralization and why cryptocurrency is the future more thanjust a way to multiply your money.

Dapps

Governance

The Agency

Reputation: The Cure For Financialized Governance. This dapp is at the heart of howthe X DAO operates. It is built on a modified version of Kp3r, creating a job market for(but notlimited to) X DAO related work. The added modifications allow for private voting by X DAOmembers to update the associated contracts, create governance proposals, and fund joint XDAO work with the treasury.

Agents in the Agency will earn XDAO governance tokens for completing tasks that help theDAO. They will need to complete and/or verify other agents' tasks in order to maintain their rankand not have their staked tokens slashed.

Ranks: The Agency will implement a ranking system, with the lowest levels not requiring kyc,and upper levels requiring a decentralized kyc process. Here is a draft of the ranks andexamples of what perks would be gained at each rank(this will be added to and slightly modifiedin the final release):

Rank 1: Minimum stake - 5 XDAO

● Vote on Tier 1 risk level tasks● Complete Tier 1 risk level tasks

Rank 2: Minimum stake - 50 XDAO

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● Vote on up to Tier 2 risk level tasks● Complete up to Tier 2 risk level tasks● Receive Civvie NFT badge

Rank 3: Minimum stake - 500 XDAO

● Vote on Tier 3 risk level tasks● Complete Tier 3 risk level tasks● Propose any changes to the protocol or DAO● Receive a Joneses NFT badge

Rank 4: Minimum stake - 5000 XDAO

● Vote on Tier 3 risk level tasks● Complete Tier 3 risk level tasks● Propose any changes to the protocol or DAO● Access to exclusive Discord channels● Receive a Chuff NFT badge

Rank 5: Minimum stake 50000 XDAO

● Vote on all proposals● Complete any tasks● Propose any changes to the protocol or DAO● Access to exclusive Discord channels● Receive an Children of X Overseer NFT badge● Have an in-lore version of you created

By using a system of Agents to verify a task's completion and whether or not it relates tothe X DAO we can reward any work that does contribute to the DAO with governance tokens ina trustless manner. This allows governance to be earned even by members who join the DAOafter it’s inception, and always puts governance in the hands of the most active communitymembers. Compare this to other DAO’s that distribute their tokens in a ponzi like manner whereearly DAO members retain control forever. The XDAO governance tokens will decay over timebut decay much slower when staked in the Agency. They can also be burned for farmingrewards for members uninterested in governance or users who are already the highest rank inthe DAO. This system also creates a much more decentralized governance structure. (The tiersystem does grant more control the higher you rank but reaching the highest ranks will beattainable for anyone who is willing to support the DAO with enough of their time. It is designedto exclude potential sybils who’ve contributed little to the DAO, not make it impossible to climbto the top positions. For this reason there is no limit to the number of members per tier oramount of X DAO Membership tokens that may be generated.)

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The Communities Dapp: The Agency for Everyone

The original Agency dapp is a test in production of an automated decentralizedorganization. Once it is established and most flaws have been ironed out, we intend to build thisconcept into a social media app to rival Amazon's Neighbors and Facebook’s Nextdoor. Theseapps focus on neighborhood security and connection while heavily relying on networks ofcameras(houses, self-driving cars, geolocation, etc.), secret police, and local businesses. Therewould also be no public knowledge or oversight on how they use this data (as long as they usethe excuse that they are combatting terrorism). It should be easy to see why letting Amazon andFacebook as centralized companies become the Big Brother of our communities will lead toOrwell’s nightmare.

Our Communities dapp will be an evolution of the Agency governance dapp baked into a mobileapp with support for all of the neighborhood monitoring and promotion features(reportingdamaged buildings, potholes, crimes, lost and found, safety concerns, local events, etc.) ofthose apps.

In the app your community will be able to moderate content using the local governance tokenwith a ranking structure similar to the X DAO with your own locally designed NFT’s. This differsfrom Amazon’s nextdoor app which elects the first person in your area to control the rules andelect other leaders, not dissimilar to the ponzi like governance structure of crypto DAO’s. Yourcommunity will also be able to control what activities (such as volunteering, reporting crimes,etc.) earn governance tokens and verify them in a decentralized way using the exact sameapproach that was proven to work in the Agency.

Local payment cryptocurrencies can be minted by permanently burning Hertz creating anotheruse case for HTZ. This can be done by users but also by the DAO in order to incentivize earlyadoption of the app. Local currencies are the only way to pay for ad space, ad-freesubscriptions, etc. in your community ensuring they have their own use case.

Users will want and choose to KYC within our app not just to receive the X airdrop but also tohave their face censored on public posts and to be able to reach the higher ranks in thecommunity. All of your data will be end to end encrypted and KYC will involve a combination ofbiometrics, government issued IDs, and machine learning. This way none of your KYC data isever revealed to anyone at the X DAO or the leaders of your community. We understand thatthere will be some small percentage of error and bad actors however we estimate that a badactor would have trouble amassing enough verified accounts to derail the protocol or cause thedistribution to be particularly unfair.

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Defi Suite

Cyberswap

Cyberswap is a constantly evolving AMM DEX, live on Fantom, Ethereum, andAvalanche. We will eventually cover other chains and layer 2 protocols as they gain traction. Aswith every other initial dapp, the XDAO token will be used to govern the protocol. The Hertztoken meanwhile will be used for farming and fees. The focus of Cyberswap is on thegeneration and proliferation of experimental token types and other features made possible by adecentralized AMM. We also want to allow liquidity providers to have better capital utilizationand use their liquidity in other ways to maximize earnings.

Brief list of features in development:

● Privateswaps● Referral system● XDAO increased farming rate● Faction competitions● Using Lp tokens as collateral for loans● Trade copying(of pro traders)

Market of Zion

There are ALOT of other general art marketplaces and this dapp is designed to replacethem once they fall victim to their centralized governance. By having community governance ourmarket should always put more proceeds into the artists hands than any other market. Ourdecentralized governance will allow us to always know what features artists from our communitytruly desire, not just the whales who pay the most for NFT's. We will start as a space where artthat specifically meshes with the cyberpunk themes and branding of the X DAO can becultivated and exchanged, but as more companies and people join the market they can bringtheir own art with them.

We will host art competitions, where the X DAO purchases the best Cyberpunk NFT's fromartists and makes them cannon. We will also commission pieces of artwork from the communityusing this dapp.

X Starter

X Starter will be the place to raise money if you want to create an app with decentralizedgovernance provided by our XDAO governance token. You will be able to raise money by sellingthe economic token of your dapp, get consultation services, and development help from other X

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DAO teams. Hertz token holders will have a higher chance of being able to participate in yoursale and have higher contribution maximums creating yet another use case for Hertz.

Ideas To Incubate

There are many additional dapps that can use the X DAO Membership token forgovernance in order to make sure they stay community controlled. These dapps can still usetheir own token for the economic incentive and to raise money for development in X starter (allinitial dapps will use Hertz). To explain why you’d want to use the X DAO Membership tokenover a farming/airdrop based approach let's imagine a messaging dapp with the same tokendistribution as bitcoin does today: (This is the disparity with 13 million+ users, the disparity willbe much much greater than this at 1 billion users) Only 1/1000 people would have enough votesto reach 60% approval for a proposal6.

That means possible censorship, privacy loss, or other outcomes that the community does notsupport would become reality. There is also the possibility that this “1” person does not have anyidea what would be best for the dapp since they merely bought the token early on but do notwork in that industry. In this case they could make a poor decision through pure lack ofexperience and 999 people would suffer. Instead dapps can elect and fund managementfoundations through the Agency using our X DAO tokens. They can select from the developerswho have contributed most to that dapp over time and trust that these committees would bemade up of people specialized in that dapps industry. The developers who form thesefoundations are the best suited and incentivized to improve the dapp and make decisions theirvoters approve or risk losing funding for bad performance.

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Concepts

Encyclopedia (equality of opportunity)

Competitors are Wikipedia, Everipedia, etc. Our competitive advantage is subsidizinghosting costs at first by mining the token with a constant emission and being able to self fundand host instead of requiring us to beg our users for donations before we shut down. Thedifferentiating factor will be that we have articles based on what our entire user base believes byvoting on articles and edits. We will not rely on the elected editors on Wikipedia or whales ofEveripedia to decide what is the truth.

Open source economic and political systems

Participating countries fight for their belief in what socioeconomic policies should beadopted by competing fairly. They agree to fair tactics and no use of force/other illicit tactics.Eventually every country could partake in this competition leading to the copying and spread ofthe best system for the entire world's individual communities. If everyone did vote to be part ofthis socioeconomic competition then it would start the transition. Our Communities dapp offers adecentralized look into the socioeconomic status of every community allowing for faircomparison.

Decentralized Unions

Creating a Union with its own token to pay those in management positions and tocompete with global companies like Amazon that try to thwart unions. We can use the token tocompensate workers who are unfairly laid off, when they go on strike, etc. The token canmaintain some value by acting similar to an employee discount on merchandise when payingwith it. This would be something the company accepts when accepting the union terms.

Other “Public Goods”

● Internet routing● Messenger● Social News● Self driving taxi network● Review platform● Search engine

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Coins/Tokens

X

Network structure and consensus

Our consensus mechanism is called V and stands for viral due to the similar propertiesof spreading transactions through trusted peers as a virus that spreads through a population.Initial development for a more decentralized consensus mechanism started with cosmos.However after a lot of research and improvements we realized it would never reach the degreeof decentralization we desired. We noted how quickly an idea can spread through populations,such as through memes, even though we each have our own circle of trusted friends. This isbecause our trusted groups have overlapping members which will broadcast the idea to a newgroup outside the original circle. We designed a consensus mechanism around this system,allowing nodes to become more trusted the more they agree, creating a decentralized web oftrust that naturally repels bad actors like an immune system. This web can also naturallyupgrade itself when forking to new software. All users of the network must also verify a smallamount of other transactions and in turn will have a trust score with other nodes. This meansthat users can be excluded from the network temporarily not just for disagreeing on the currentstate but also for spamming.

All nodes will start with the same genesis ledger which tracks what UTXOs are owned by whichaccounts. Nodes which join later can query enough nodes until they are satisfied that they havesynchronized with the most accepted version of the ledger. The ledger will only maintain the last4 hashes in the hashchain of each UTXO to keep storage to a minimum. We decided on thisapproach over both using a small subset of nodes to compress the ledger usingZero-knowledge or using Peter Todd’s MMR0. Since the hardware requirements will be higherfor ZK compression nodes due to the amount of computation required, they could form a cartelwhich would ultimately defeat our goals of decentralized consensus. If we were to use MMR ourusers would have to frequently or always be connected to the network or risk losing access totheir coins. This is not user friendly for most people, since their phone may die, become broken,lose service due to travelling, etc.

When a transaction(s) is received by a node from a peer it will verify that it can attach the hashto the end of the UTXO using the sender's public key + the signature in the hash. It will thenupdate its ledger to reflect this by changing the owner of this UTXO. It will then group alltransactions it receives within a period of time and forward them to 14 other nodes, selectedrandomly based on the latest hash of its verifiable delay function and weighted by its individual

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trust score for them. If there are no conflicts(which there won't be unless someone tries todouble spend) then the transaction will propagate through the network(especially the goodacting nodes) very quickly. A node will finalize a decision on the change to an accounts balanceafter x amount of time. This will mean it will no longer change its opinion on the validity of thetransaction. In order to confirm that an amount of time has passed nodes will run their owninternal verifiable delay function2. There is no advantage to trying to run this function faster thanthe network since you will want to reach finality at a rate similar to your peers in order to earnthe greatest possible reputation score with them.

In the event that there is a conflict then a node will reply to the node that sent the transactionand send a message to all the other nodes in the set of 15 to vote on what they believe is thecorrect transaction. If a majority of nodes agree(the exact number to fluctuate between 8 and 11based on our node's internal clock[VDF]2) then the nodes which disagree will change theiropinion and increase their certainty in that opinion by combining the trust scores they have foreach node in the set. If in the next round there is a conflict over the same transaction but withnodes of a lower trust score the node will not change it’s opinion. If the nodes have a combinedhigher trust score than that of the nodes in the previous round then it will change its opinion.After 5 rounds a node will finalize its decision and no longer change its ledger on that particulartransaction. In the event a node locks into its decision too early they can also disable and thenresynchronize if they notice that any transactions have been finalized with a high (>90%)consensus against their decision. This system is robust in that good actors' transactions can beverified and propagated quickly and bad actors' transactions only stall their own finality. It also isresistant to forks since nodes do not need to agree on bad actors transactions. They can finalizewith conflicting opinions and the network will continue to function.

Periodically nodes will send signed messages containing their current ledger to aggregationnodes which have more bandwidth to enable faster querying of the network state. Theseaggregation nodes will be able to display the network's opinion on who owns which coins bycomparing the account balances across all consensus nodes ledgers it receives. They areunable to sign ledgers on behalf of nodes however, making sure that aggregation does notaffect consensus and cannot manipulate the validity or ownership of coins. To ensure securityfrom the onset, there will be a minimum number of consensus and aggregation nodes requiredto be online at the start of the genesis ledger.

Peer selection

Peer selection is done by a trust score that each node maintains individually for othernodes in the network. The more often a node agrees with another node, the longer it has heldthe minimum stake, and the validation that a node has changed its state when met with aconflicting group are all components/multipliers of this trust score. If a node has no peers with atrust score it will form a group randomly to start the process. In a conflict scenario nodes willhave to show the signed messages of their peers in the last round that prove why they haveswitched or not switched their decision. If a node has not switched its decision when it shouldhave the set of nodes will lower its trustscore to the point of not pairing with it again. Effectively

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this will quickly stop the bad acting nodes from being able to participate in consensus. If there isa valid conflict the trustscore between the nodes will decrease slightly, however futureagreements on other transactions will quickly raise it again. Highly trusted nodes will form acluster resistant to attacks but permitting new good acting nodes to enter. Unlike other proof ofstake systems, nodes will be on a much more equal footing, and they won't form a smalloligarchy that has exponentially more control over consensus.

Peers that are part of the network will need to share a “Ping” every 10 minutes in order to stayactive. This message will contain a small amount of PoW and also a list of other active knownpeers. If the message is not valid or not received then the peer will be kicked off the network.

History Storage

Nodes will store the last 4 hashes in the chain of UTXOs of every UTXO from the originalmint. This will form a ledger of which accounts have the final rights to these UTXOs at any time.They can only add to the top of this chain, so once an account owns a UTXO, the account of theprevious hashes cannot write a transaction that will be accepted by the network since therewould be nowhere to attach the transaction. The ledger will therefore always maintain the sametotal balance which is easily verifiable. Bad acting nodes cannot support two different decisionsotherwise their total balance would increase.

The entire history of the UTXO will be held by the current person who owns the account that themajority of ledgers think owns the coin. They can store it anyway they choose and there is noneed for security of these files since you can only sign away the coin with your private keys.

Bad actors

There are different types of bad actors and we will go over the most common and howthe network reacts to their presence. The first type are sybil nodes- combated by using the proofof trust score in consensus and peer selection. Since we have a more distributed currency thanany other proof of stake system the network is much more resilient to sybil attacks.

The second type are those who try to send a coin to two different accounts at the same time.These users will only stall the finality of their own transaction, but even after the maximumnumber of rounds the network may not have a strong enough majority that agree on thetransaction. In this case it will be up to the real life recipients whether they choose to accept acoin as valid that the network does not agree belongs to them exclusively. Most likely they willnot accept it since they would have trouble spending it. This is because a large portion of nodeswould have a valid reason to reject their future transaction and the recipient of that transactionwould then not accept the coins. This means that we can consider the bad actors' coins asburned.

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The third type are those who try to spend a coin before the majority of nodes has reachedfinalization on the decision that they own it. In this circumstance those nodes that have notreached finality on the previous transaction will initially reject the new transaction and providethe appropriate reason. If a majority of peers in their set approve the transaction then they willadd it to a pool and once the previous transaction reaches finality they will confirm its validityand attempt to propagate it to peers again. If a majority rejects the transaction then the nodeswho previously accepted it will change their opinion and notify the nodes that propagated thetransaction to them. Thus the user will need to submit the transaction again.

Making and receiving payments

To perform a send, the user will perform a small amount of proof of work included withtheir transaction and submit it during their next round of mining. Once confirmed the secondstep is for the user to send the entire UTXO chain(s) to the receiver. In practice this step doesnot need to occur as some of the aggregation servers will keep records of the entire history ofall users balances (trustlessly and verifiably based on the signed hash tables received fromconsensus nodes). Accessing this data as a user will probably be free but access forenterprises and other frequent customers will probably cost money to keep the aggregationservers online. In this case you could simply verify the UTXO chain, or even download the fullUTXO chain from the aggregation server to back it up yourself. In the future the network couldalso use a DHT storage protocol for backing up important data such as this.

In order to confirm that someone has sent you coins successfully you will need to make surethat the UTXO(s) chain is verifiable back to the original mint. You can then query randomsubsections of aggregation nodes(or specifically request the ledgers of consensus nodes youtrust) till you are satisfied that the network has reached a threshold of agreement that youraccount is now the owner of these coins.

Token distribution

In blockchain based cryptocurrencies new coins are minted by the network as eachblock is created. This means all nodes must agree on one transaction history otherwise theirchain and the creation of future coins will fork. In our system everyone needs only to agree thatthe initial genesis set of coins are legitimate since these will be the only tokens to ever exist. Anode's total ledger can only contain x number of coins so it must come to a final decision oneach transfer of UTXOs between accounts. Bad actors trying to vote both ways are easilyspotted since the total balance of their ledger would be inaccurate.

The initial creation of coins needs to be provably fair and the total supply must be trusted by allparticipants. In order for this to happen we will deploy a private smart contract based mint on thelargest and most secure decentralized computing network. There are a few projects working onprivate smart contracts at the moment, so by the time we are ready for the distribution some will

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have proven themselves as the most reputable. The mint will generate all of the UTXOs anddistribute them to the genesis addresses and the rest will go to the foundation address for laterdistribution. All unclaimed tokens will be burned by the foundation by sending them to the blackhole address after a certain period of time. After the mint has conducted the initial creation anddistribution it will burn the private keys it used to sign the transactions. All of this code will beaudited and verifiable to ensure trust and prevent any leakage of sensitive data. To verify thatthe UTXOs you are receiving are legitimate, you must receive their entire chain from the senderof the transaction. This will allow you to trace back the inception of the coin to the mint. In orderto keep the smart contract small and running for a short time the genesis addresses will bethose who have received pre-mainnet tokens. All airdrop participants will have their tokensdistributed by the foundation.

The total supply of coins will be airdropped to the entire population of the world (an estimated 8billion+ people). 10 coins will be airdropped per person to anyone who has voluntarily KYCed inour Communities dapp.

There is NO ICO/Presale/Team/Premine for the X coin.

XDAO Governance Token

The X DAO Membership/Governance token or XDAO token represents your reputationin the X DAO and also serves as your weight when voting.

Use Cases

● Governance of X DAO dapps● Providing XDAO/FTM liquidity to burn your XDAO for a large amount of HTZ

Token Distribution

You can earn XDAO during the ITO:(https://zer0-53733.medium.com/ito-quickstart-guide-a947450c69c2) or in our Agency dapp. Byonly distributing the X DAO token through these methods, having the tokens decay over time,no private sales, and other token functions we hope to create the most decentralized distributionand organization possible.

Hertz

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Hertz is the inflationary farming token created by the X DAO. The goal is to add enough usecases to Hertz so that eventually more is burned than minted causing it to become deflationary.The inflation as a percentage of total supply will flatten over time, but this flattening can beaccelerated by reducing the number of tokens generated per block.

Use Cases

● Lower fees on the Agency Dapp● Higher chances of participation and greater contribution amounts of X Starter IDO's● Gas on the live testnet for X (Similar to Kusama's relationship with Polkadot)● Farming/airdrop rewards● Discount when paying with Hertz in cult merch shop● Minting local currencies on the Communities dapp

Deflationary Mechanisms

● Buyback and burn 0.05% of every trade made on Cyberswap● Burn 75% of Hertz used to pay the selling fee for NFT's on the Market of Zion (25% used

for insurance)● Burn 25% of the Fees charged on the Agency Dapp● Burn 2% of every yield harvest in Hertz single stake pool● Burn 20% of Hertz spent on lottery tickets● Burn 100% of Hertz used for Profile creation● Burn 10% of Hertz used to participate in Faction competitions● Burn 1% of Hertz transferred to/from a smart contract network to the X live testnet● Burn 10% of Hertz from XDAO-FTM Lp melting rewards● Buyback and burn HTZ purchased using 5% of ETH/FTM raised by projects launching

on X Starter● Burn 100% of Hertz used to mint local currencies in the Communities dapp.

Token Distribution

The Emission rate of Hertz is 0.35 tokens per block or 11 mil tokens a year on Fantom assuming1 second block times. 11% of harvested tokens will go to the X DAO reserve address.

Half of the coins sent to the X DAO reserve wallet are used formarketing/bounties/development/reserve which after transition will be fully controlled by theDAO, half are burned (this can be increased).

Initial total supply: 11 million tokens

Supply after 1 year: 23 million tokens (Minus burned tokens)

Initial circulating supply: 1 million tokens

Circulating supply after 1 year: 16 million tokens (Minus burned tokens)

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9 million - Private sale, 25% unlocked each year over 4 years.

1 million - Initial liquidity (50% Locked, 50% removed; FTM pays for ongoing development, HTZairdroppd to LP's in various ways)

1 million - The X Foundation. 25% unlocked each year over 4 years.

The Cyberswap initial listing price was 0.04 FTM.

NFT’s

Children Of X Storyline

The Children of X storyline will follow the adventures of multiple different characters inthe X DAO world. Plot points, recurring characters, and other decisions will be voted for by thecommunity allowing them to influence the evolution of the story. Members of the community canalso create their own characters and have them fit into the official lore.

The first storyline arc will contain 3 different stories with NFT’s ranging from characters, comics,news articles, voice recordings, animations, etc. Storyline NFT's sold by the X DAO(such as thecharacters on our websites) will be 1 of 1 in order to maximize their value and ownershipsatisfaction. This way, when you buy the animation containing Yun Seo’s street race, you ownthat part of the story exclusively forever! Badges and other NFT's such as trading cards are notnecessarily limited.

Our setting is based in a cyberpunk world in 2048 and draws many parallels to the society welive in or are headed to today. Cyberpunk themes are known to contain megacorporations,corruption, and other features that show why we need to create a decentralized world. Wechose this setting because we can use the narrative to educate newer crypto enthusiasts abouttrue crypto and decentralized values through a more engaging format.

Incognition

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“Incognition” is our upcoming NFT trading card game which revolves around trying to breach thesecurity of each of your opponents servers. Once you breach all 5 servers you are able toaccess each private key for the multisignature wallet that controls your opponents memorystorage on the United Government database. You can then access everything that they haveever known and eliminate them from existence. Further gameplay and card prototypes will berevealed soon.

Roadmap

2021-22 (Elements)

● Initial dapps release● First projects raise funding in X starter● First Arc of the storyline is released● First iteration of Incognition released

2023-24 (Millenium Falcon)

● X testnet● Test network token swap opens (using Hertz)● Initial Communities app released● X testnet upgrade 1● Dapp upgrades and completion of incubated dapps● Disruptive mainstream marketing campaigns for dapps (targeting centralized competition

where they are weakest)

2025 (2525)

● X testnet upgrade 2● New roadmap created for the next 5 years

2036+ (Brave New World)

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● Global cell phone adoption hits 70%+● X becomes reserve currency for certain businesses● 67% of global population vote for X’s open source economic and political system - The

Transition begins

2040+ (Dawn)

● Ai algorithms are used to determine the best economic policies and evolve based on thetrends in the underlying populations by accessing their private information on theirphones(without human visibility of the inputs or outputs of this information)

The Transition

Why should the world transition?

As mammals we are inherently social creatures and throughout history have organizedourselves in groups to develop infrastructure towards a common goal. This infrastructureattempts to fulfill the first 2 levels of Maslow's hierarchy of needs5 allowing us to focus on thehigher levels. In the past we could only organize ourselves by establishing centralized systemsas it was impossible to efficiently gather the opinions of people who were far away from youphysically. With the advent of the internet and the respective communication technologies wecan now organize ourselves just as easily from other sides of the world as we could if we wereall in the same room. This has led to many global communities from bitcoin to video game clans.Without ever meeting face to face with anyone you can join these communities, learn their rules,and participate in them. Our centralized systems have created ruling classes that were anecessary evil until now. Wars were fought to fill the pockets of leaders, while the people takingalmost all the risk and doing all the work received a quick death. Most famously this was seenduring Christmas 1914, when people realized for a few moments what they were actuallyfighting against (Themselves). Centralized systems say that you need them for protection butcreate more death and destruction with every disagreement since the leaders involved aresupported by their peers/populations for using aggression4. In a decentralized system where weall agree to make choices diplomatically, we are all partial leaders and the few who still chooseto use force can be easily combated. Today we can begin the evolution of society to a globalorganization and agree in a decentralized way whether we want to continue war or whether wewant to fight against disease, starvation, and other issues that affect us all. An agreementbetween 10 men in a special room will eventually deteriorate into war when one acts poorly. Anagreement between 7 billion humans will stand the test of time even if all 10 men act poorly.Let’s reach a decentralized consensus.

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Within 100 years we will reach nuclear annihilation or we will organize together.

What is the transition?

Once X has been fully/almost fully(allowing for some small amount to receive afterwardsif adoption of cell phones tails off as long as younger generations are fully penetrated.)distributed during the airdrop and a vote has been cast fairly evenly across all countries with aminimum of 67% support- the Transition can begin. There is a bounty inherent in this protocol'sadoption, since as the X DAO gains supporters the X airdrop will eventually grow to be worth aconsiderable amount in fiat currencies. This will help aid the adoption curve as people will getkyced in order to make sure they receive it. Some % of X DAO members will put some of theirwealth into testnet X and therefore will also increase the token price creating a knock on effectof more investors wanting to kyc because the perceived value of real X in the airdrop is nowlarge enough that the kyc is worth their “time”. When kycing on any of our apps for the X airdropyou will be asked if you would support this transition with your X tokens, you can change yourvote at any time, and before you vote and after voting you will see the totals for either side.Once the transition occurs we can then move a large amount of the 1.9 trillion dollars that isspent every year on military spending and spend it on improving the security and livelihood ofeveryone. Rich people will no longer need to fear the destruction of their work from leaders whothrow their country into war. The poor will no longer be used as cannon fodder in wars createdto keep military corporations in business or destabilize economic competition.

Conclusion

Core Tenets

Since the protocol will go through further and further decentralization of its development wehave created some core tenets to help guide the future community.

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1. The voting weight disparity between a user in the top 1% and one in the top 20% cannotexceed 100:1

2. The average person should be able to run a validating node with tools they already own andwithout causing detriment to their lifestyle

3. There should be no hierarchy of nodes which create "slave nodes". I.E. an oligarchy as seenin some systems where only a few nodes' opinions on truth actually matter.

4. The initial distribution should be provably fair to everyone regardless of race, creed, or otherdividing or distinguishing factors.

5. All code should be open source and all funds donated to the DAO should be split fairlybetween contributors to the protocol and its propagation based on quadratic voting3.

6. There should not be an unfair advantage for employees in any of the foundations.

7. Voting needs to reach a minimum threshold of 67% for the change in order to beimplemented.

Final Words

The X DAO is built around decentralization and our community will not stop building until thosegoals are reached.

X is a store of value and represents your ownership in the future global society. It is designed foradoption by all and apolitical in nature. Everyone starts with the exact same stake in the network

and will benefit from its growth.

Together we will decentralize the world

Links0. https://petertodd.org/2016/delayed-txo-commitments

1. https://arxiv.org/pdf/1905.10895.pdf

2. https://www.youtube.com/watch?v=qUoagL7OZ1k

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3. https://vitalik.ca/general/2019/12/07/quadratic.html

4. https://en.wikipedia.org/wiki/Axis_powers

https://en.wikipedia.org/wiki/Allies_of_World_War_II

5. https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs

6. https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html

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