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Design Philosophy

How did Topl design its protocol?

Defining “sustainable and inclusive”

There are many terms that can describe the sort of new economic reality that Topl will power with its infrastructure, but we choose root ourselves in two—sustainable and inclusive—as the most appropriate.

Sustainable. A system is sustainable if (and only if) it can support itself indefinitely and on its own designs. If a system diminishes something (e.g. natural capital) away, it must also be able to regenerate what is taken away for it to be considered sustainable. While we’re all familiar with the ideas of environmental sustainability, the idea of sustainability is just as important in socio-economic terms. An economic system is not sustainable if it continually creates and accelerates wealth inequality or perpetually shifts incentives for investment to the short term from the long. To be sustainable, a system must actively provide the necessary support for both the environmental and social foundations on which it operates.

Inclusive. To ensure inclusivity in a system, we must always pay careful attention to both barriers to entry and power dynamics. Through our blockchain technology and community of builders and changemakers, Topl seeks to build a globally inclusive economic system that transcends borders. Our vision for inclusion entails providing the tools necessary for full and free economic participation without regard to geography, technological access, or language.

Why blockchain?

Considering Topl’s theory of change and vision for the future, we are faced with the natural question of “Why blockchain?” To answer, we must first understand what makes a problem well-suited to blockchain.

In our view, a problem should have three characteristics to be well fit for this disruptive technology.

  1. There is reliance on infrastructure that is outdated, under-resourced, or somehow insufficient—or a complete lack of infrastructure altogether.
  2. The situation involves a diverse and dynamic set of stakeholders representing different geographies, priorities, and arrangements.
  3. Interactions are strained or challenging due to a lack of trust between different participants.

The notion of investing in and accurately pricing both environmental and social externalities is key to building a sustainable economic system. A simplified way of looking at this is to say we need to create a market for externalities to ensure sustainability. To understand the applicability of blockchain technology to bootstrap and power new markets, we need to look no further than the myriad examples offered by non-fungible token (NFT) marketplaces, decentralized finance (DeFi), and in-game monetization to see web3’s ability to create markets where none previously existed.

Turning to the idea of inclusion, we again see the resonance between this key property and the potential of web3. While we acknowledge that the web3 space still has substantial room for improvement with regard to the usability of its tools, the idea of permissionless and equitable access to economic instruments and fully self-sovereign control of one’s information is as core to the blockchain movement as any other idea can claim to be.

Beyond the broad goals of sustainability and inclusion, we find a strong need for blockchain technology in the tangible verticals and use cases that will be key to achieving Topl’s goals. Consider global supply chains, regenerative finance (ReFi), and an overall focus on the Global South and emerging markets. These three areas align in their needs or challenges with those that make a problem best suited to blockchain technology.