# The engine, step by step > Moving or still, money in a wallet pays in; the fund pays out only above its floor; and what it pays out comes back around. Gavin Robert McGowen · interstellarblends.com. This site describes a patent application. It offers no token, security or investment. Canonical: https://velocityprosperity.com/engine/ ## The scalpel - Money that moves pays “a transaction fee”; money that sits pays “a holding fee”; both are “directed to economic-stimulation fund 400”. - The fund pays the spender through “a rewards pool” and pays “an eligible worker or other approved recipient for an eligible activity”, whose pay is spent again. - Every payment first checks the balance it would leave: the treasury disburses “responsive to the balance remaining at or above the reserve floor” (claim 11). - The floor moves with the work: it “is calculated from an average disbursement from the treasury over a trailing plurality of ledger intervals” (claim 12). - And the fund cannot pile up: above “a target reserve calculated from the reserve floor”, the surplus goes to “at least one additional approved initiative” (claim 12). - The fund runs on its own fees: “a transaction-derived fee rather than an externally administered subsidy”. - Every change to a rate is bounded by “an authorized transition rule” and switched on every node “at the effective ledger interval” (claim 2). ## In plain words Money pays in whether it moves or sits: a small fee on each purchase, a holding fee on idle balances. The fund pays the fees back out, to the people who spend and to people paid for work, and they spend again. Before any payment, the fund checks what it would have left. If that would fall below its floor, the payment does not go out. So it never pays out what it does not have. ## The engine as a movement *The engine drawn as a watch movement. At the center, the fund, with a hand that rises and falls between a floor and a target. Around it, eight wheels carried on a ring, one of them gold, passing the eight operations numbered on the dial, all meshing inside a fixed ring marked circulation. Above, a swinging weight engraved in motion or at rest; below, a balance wheel beating with its escapement.* The engine drawn as a watch movement: both fees wind the fund at the center; a gold wheel carries one payment through the eight operations on the dial; the hand rises with fees and falls with payments, which stop at the floor, and what passes the target goes out; and the balance beats the bounded steps. ## One turn, eight operations 1. **Spend** “a network participant 110 may transfer value to a merchant participant,” 2. **A fee goes to the fund** “a transaction fee may be deducted and directed to economic-stimulation fund 400,” 3. **The fund feeds a rewards pool** “economic-stimulation fund 400 may allocate a portion of the received fee to a rewards pool,” 4. **The spender is rewarded** “the rewards pool may credit a spending reward to the transacting network participant 110,” 5. **Idle money pays a holding fee** “a holding fee may be periodically deducted from an unspent wallet balance and directed to economic-stimulation fund 400,” 6. **The fund reinvests** “economic-stimulation fund 400 may allocate a further portion to reinvestment and participation support 170,” 7. **Workers are paid** “reinvestment and participation support 170 may pay an eligible worker or other approved recipient for an eligible activity,” 8. **The pay is spent again** “and the recipient may spend the received value with a merchant participant, thereby returning transaction-derived value to transaction activity and circulation 120.” ## The parts **The gold wheel** One payment It carries one payment through all eight operations and back to the first, “thereby returning transaction-derived value to transaction activity and circulation 120”. **The rotor** Both fees It winds the fund in motion or at rest: a purchase pays “a transaction fee”; an idle balance pays “a holding fee”. **The sun** The fund At the center, “economic-stimulation fund 400”: both fees are “directed to” it, and it makes every allocation that follows. **The hand** The floor and the target It rises as fees come in and falls as payments go out, and no payment takes it below the “reserve floor” (claim 11); above “a target reserve”, the surplus goes out (claim 12). **The ring** Circulation Every wheel runs inside it: “an aggregate movement of value among network participants 110 over time”. **The balance** The control loop It lets change through in measured beats: each update bounded by “an authorized transition rule” and switched on “at the effective ledger interval” (claim 2). **The open back** On the record Open to view: the transparency interface may display “a stability measure, a transaction-volume measure, a use of economic-stimulation fund 400, a security-audit result”. ## What comes in, what goes out In Every purchase pays “a transaction fee”, “directed to economic-stimulation fund 400”. Every idle balance pays “a portion of the unspent balance at a defined interval, such as a monthly interval”. Out To the spender through “a rewards pool”, which “may credit a spending reward to the transacting network participant 110”. To work through “reinvestment and participation support 170”, which “may pay an eligible worker or other approved recipient for an eligible activity”. To liquidity, first a share to “liquidity assurance pool 3706 before disbursing a remaining share to societal initiatives 3708”. To societal initiatives which “may fund a job-creation program using an amount received from economic-stimulation fund 400”. The surplus above “a target reserve calculated from the reserve floor”, to “at least one additional approved initiative” (claim 12). Before any payment leaves the treasury, one check: the balance it would leave must “remain at or above a reserve floor” (claim 11). ## Why it never pays out what it does not have 1. Before a payment, the treasury determines “whether a balance of the treasury after the proposed disbursement would remain at or above a reserve floor” (claim 11). 2. It pays “responsive to the balance remaining at or above the reserve floor”; in the specification’s words, “only when a resulting treasury balance would remain at or above a reserve floor”. 3. Fees only add to the balance, and a payment goes out only after it passes that check. 4. So no payment, and no run of payments however long, takes the balance below the floor it is checked against. 5. The floor moves with the average payout (claim 12), so after heavy payouts it can stand above the balance; then every proposed payment is withheld until one would again leave the balance at or above the floor. The fund gives only from what it has collected, and no payment ever takes it below its floor. ## Why it keeps turning 1. Money in a wallet is either spent or left unspent; there is no third state. 2. Spent, it pays “a transaction fee”; unspent, “a holding fee”; both are “directed to economic-stimulation fund 400”. 3. Locked as savings, it leaves the wallet for work: a portion “is locked into a job-creation project or another societal initiative”, and the locked amount “may, for example, be exempted from a holding-fee mechanism”. 4. The fund pays the fees out above its floor, to the spender and to work, and in the cycle the pay is spent again, “thereby returning transaction-derived value to transaction activity and circulation 120”. 5. So whatever the fund pays out lands in a wallet, where it is again spent or unspent and pays in again, or is locked into work. 6. The fund needs no outside subsidy: it sustains its reinvestment with “a transaction-derived fee rather than an externally administered subsidy”, in a “recurring, self-sustaining transaction-activity-and-circulation cycle”. 7. So no step uses up what the next one needs: the money the fund pays out goes on paying in, moving or still, or works in a project while it is locked, for as long as it stays in VP2.0. Money in a wallet pays in, moving or still, and savings locked into a project go to work; what the fund pays out comes back around while it stays in VP2.0. The fund runs on its own fees, with no outside subsidy. ## What follows from it Each conclusion below is ours, reasoned from the application’s own words, with every step written out. 01 ## Hoarding hands itself back A balance left sitting goes back to work, a share at a time, interval after interval. 1. An idle balance pays “a portion of the unspent balance at a defined interval, such as a monthly interval”. 2. The fee is “directed to economic-stimulation fund 400”, which pays it back out to spenders and to work. 3. So the longer money sits, the more of it the fund receives to pay back out: at 1% a month, inside the example range of “approximately 0.5% to 2%”, a balance idle for a year sends about 11% of itself to the fund. A saving balance can be locked out of the fee: it “may, for example, be exempted from a holding-fee mechanism”. 02 ## Lost money comes back to work Money stranded in a lost wallet finds its way back into the economy. 1. The holding fee is “periodically deducted from an unspent wallet balance”. 2. A wallet whose keys are lost is still an unspent wallet balance, and the deduction asks nothing of its owner. 3. So money whose keys are lost does not leave circulation for good: the fee returns it to the fund, a share at a time, and the fund pays it back out. 03 ## A slump pays toward its own recovery When spending stalls, the money that stops still pays in, and the fund can pay it out as wages. 1. In a slump, money sits: Fisher found “the average dollar circulates only about a third as fast as usual”. 2. Money that sits pays “a portion of the unspent balance”, so the more that sits, the more it pays. 3. The holding fee funds the work “without depending on continued transaction activity alone”. 4. So when spending stalls, the fund is still fed, and fed more by the money that has stopped; above its floor it can pay that money to workers, and in the cycle their pay is spent again. 04 ## The cushion grows with the work The more the fund does, the larger the reserve it must keep before it pays. 1. The fund pays only if its balance “would remain at or above a reserve floor” (claim 11). 2. The floor “is calculated from an average disbursement from the treasury over a trailing plurality of ledger intervals” (claim 12). 3. So the more the fund pays out in an ordinary interval, the more it must hold before it pays again: the cushion scales with the work it funds. 05 ## The fund cannot hoard either The fund keeps a cushion, not a hoard: what rises above its target goes out to approved initiatives. 1. Above “a target reserve calculated from the reserve floor”, the treasury routes “a surplus portion of the balance of the treasury to at least one additional approved initiative” (claim 12). 2. The specification gives the reason: “avoiding an unbounded accumulation of unallocated value”. 3. So the fund works between two marks: no payment takes it below its floor, and what rises above its target goes out to an approved initiative. 06 ## No reward is printed Every reward is paid with money already collected, so rewards add no new money. 1. Rewards are paid from fees already collected: the fund “may allocate a portion of the received fee to a rewards pool”. 2. Validators are paid a share of the same fees: the network may adjust “a validator-operation parameter using the fee allocation”, and that parameter “may, for example, include a validator reward share”. 3. The only minting the application describes is at a bridge, which may mint “a representative token amount responsive to a confirmed lock event”: a copy on another network, made against tokens locked on this one. 4. So paying a reward moves money that already exists; it adds no new money. 07 ## Influence gets dearer as it grows Each added vote costs more than the last, and a fortune left idle pays its fee every interval. 1. To hold more is to pay more: the holding fee is “a portion of the unspent balance”. 2. To vote more is to pay the square: “a square of the number of votes cast” (claim 10). 3. So on one ballot, 100 times the tokens buys 10 times the votes, and an idle fortune pays its fee every interval. 08 ## The most a fee can be is set in advance No fee the network tunes can pass its range, or move further than its rule allows. 1. The transaction fee is clamped to “an authorized range”, in the example “from approximately 0.5% to approximately 2%”, “independently of an output produced by deep Q-network 1200”. 2. The range does not come from the model: the specification describes “Committing an authorized range independently of the model output”. 3. Every change must pass “an authorized transition rule” and takes effect “at the effective ledger interval” (claim 2). 4. So before a fee is charged, the most it can be and the soonest it can change are already set. ## The hardest question about the fund No. 14 The economist ## Doesn’t a reward bigger than the fee run the fund dry? The case The application’s sample reward, “approximately 5% to 10% of the transaction value”, is larger than its sample fee of “approximately one percent”. Paid on every purchase, it would cost more than the purchase brings in. The answer The sample rates are examples. What binds is the rule: rewards come out of a pool the fees fill, and nothing is paid below the floor, so rewards can never outrun what has come in. - A reward is paid from a pool, not promised from nowhere: the fund “may allocate a portion of the received fee to a rewards pool”, and “the rewards pool may credit a spending reward”. - Every payment out of the treasury first checks the balance it would leave, and goes out “responsive to the balance remaining at or above the reserve floor” (claim 11). - The rates are set together, not alone: claim 1’s mechanism is “configured to optimize transaction fees and user rewards in real-time”, and the sample rates are “illustrative, non-limiting”. - So a reward can be paid only from what the fees have brought in: the pool cannot credit what it does not hold, and the floor stops any payment the treasury cannot make. [All 14 hard questions](https://velocityprosperity.com/hard-questions/) The question ## Can the VP2.0 fund run out? Not below its floor: before any payment, the treasury checks the balance the payment would leave, and pays only if it stays at or above a reserve floor set from its average payouts (claims 11 and 12). Its income is a share of money moving and money sitting, so it is fed either way. The question ## Does the VP2.0 fund need outside money to keep paying out? No. In the design the fund runs on its own fees: the fund sustains its reinvestment with “a transaction-derived fee rather than an externally administered subsidy”, in a cycle “operating without a central administrator or external subsidy”. **The sources in full every quotation on this page, where it stands** > “Continuing the illustrative eight-operation economic cycle, a network participant 110 may transfer value to a merchant participant, a transaction fee may be deducted and directed to economic-stimulation fund 400, economic-stimulation fund 400 may allocate a portion of the received fee to a rewards pool, the rewards pool may credit a spending reward to the transacting network participant 110, a holding fee may be periodically deducted from an unspent wallet balance and directed to economic-stimulation fund 400, economic-stimulation fund 400 may allocate a further portion to reinvestment and participation support 170, reinvestment and participation support 170 may pay an eligible worker or other approved recipient for an eligible activity, and the recipient may spend the received value with a merchant participant, thereby returning transaction-derived value to transaction activity and circulation 120.” > — VP2.0 specification > “disburse the proposed disbursement to a recipient responsive to the balance remaining at or above the reserve floor and the recipient satisfying a committed eligibility criterion.” > — VP2.0 · Claim 11 > “the reserve floor is calculated from an average disbursement from the treasury over a trailing plurality of ledger intervals, and” > — VP2.0 · Claim 12 > “the treasury subsystem is further configured to route a surplus portion of the balance of the treasury to at least one additional approved initiative, responsive to the balance exceeding a target reserve calculated from the reserve floor.” > — VP2.0 · Claim 12 > “AI-driven dynamic adjustment mechanism 101 and economic-stimulation fund 400 may sustain a reinvestment mechanism using a transaction-derived fee rather than an externally administered subsidy.” > — VP2.0 specification > “a parameter-transition control mechanism configured to constrain the parameter-state update according to an authorized transition rule;” > — VP2.0 · Claim 2 > “each validation node is configured to verify the parameter-state package, activate the constrained parameter-state update as an activated parameter state at the effective ledger interval responsive to the verification, and apply the activated parameter state during ledger operation to control transaction admission, validation operation, and ledger-record formation, and” > — VP2.0 · Claim 2 > “determine, for a proposed disbursement from the treasury, whether a balance of the treasury after the proposed disbursement would remain at or above a reserve floor, and” > — VP2.0 · Claim 11 How it is read in the eight-operation cycle both fees go to the fund, and the rewards pool, the reinvestment and the pay for work are each allocated from it. > “Transaction activity and circulation 120 may represent an aggregate movement of value among network participants 110 over time.” > — VP2.0 specification > “The transparency interface may, for example, display a stability measure, a transaction-volume measure, a use of economic-stimulation fund 400, a security-audit result, and/or an economic-impact measure derived from ledger-operation telemetry, such as obtained through network telemetry and subsequent-cycle feedback 180.” > — VP2.0 specification How it is read a drawing of the mechanism set out on this page; each part is named in the key beside it, with its receipt. > “The holding-fee mechanism may, for example, periodically deduct a portion of the unspent balance at a defined interval, such as a monthly interval.” > — VP2.0 specification > “Allocating a share of transaction fees 3702 to liquidity assurance pool 3706 before disbursing a remaining share to societal initiatives 3708 may reduce a likelihood that a discretionary disbursement reduces a resource available for sustaining market liquidity.” > — VP2.0 specification > “Societal initiatives 3708 may fund a job-creation program using an amount received from economic-stimulation fund 400.” > — VP2.0 specification > “An illustrative, non-limiting holding-fee rate may fall within a range of approximately 0.5% to 2% of the unspent balance per interval, while an illustrative, non-limiting spending-reward rate credited to a network participant 110 responsive to a transaction may fall within a range of approximately 5% to 10% of the transaction value.” > — VP2.0 specification How it is read each month keeps 99% of what was left the month before; after 12 months 0.99¹² ≈ 0.886 remains, so about 11.4% has gone to the fund. How it is read each interval takes a share of what sits and sends it to the fund, which pays it out. > “In a savings-tier configuration of that embodiment, a locked value amount may, for example, be exempted from a holding-fee mechanism described above and may be associated with a principal-protection condition, together with a return calculated at a rate lower than a return associated with an investment-tier configuration.” > — VP2.0 specification How it is read the network deducts the fee at each interval; it does not wait on the holder. How it is read the two steps above, with the fund paying out what it collects, as the eight-operation cycle sets out. How it is read a lost wallet is still an unspent wallet balance, so the fee still reaches it. > “In depression times, the average dollar circulates only about a third as fast as usual so that a turnover of twice a week becomes twelve times the depression average for conventional money.” > — [Fisher, Stamp Scrip (1933), ch. III](https://userpage.fu-berlin.de/~roehrigw/fisher/stamp3.html) How it is read a fee that is a share of a balance grows in step with the balance. > “Applying a holding-fee mechanism together with a spending-reward mechanism may, for example, advantageously enable the system to autonomously discourage indefinite accumulation of an unspent balance while continuing to fund reinvestment and participation support 170, without depending on continued transaction activity alone.” > — VP2.0 specification How it is read the three steps above, with the worker’s pay spent again as the eight-operation cycle sets out. How it is read read as a multiple of the average payout, a floor set from it rises as the average payout rises. > “Ranking eligible recipients by a committed impact score, and routing a surplus balance to an additional initiative or an alternative buyback/burn operation under a governance-adjustable rule, may, for example, advantageously allow economic-stimulation fund 400 to direct a limited resource toward a higher-priority recipient while avoiding an unbounded accumulation of unallocated value.” > — VP2.0 specification How it is read claim 11 stops any payment that would leave the balance below the floor; claim 12 routes what exceeds the target. > “Quantum-resistant blockchain 201 may adjust a validator-operation parameter using the fee allocation received from AI-driven dynamic adjustment mechanism 101.” > — VP2.0 specification > “The validator-operation parameter may, for example, include a validator reward share.” > — VP2.0 specification How it is read the validator reward share is set from the fee allocation, so validators are paid out of the fees. > “The corresponding bridge contract deployed on Ethereum-compatible network 2602 may mint a representative token amount responsive to a confirmed lock event.” > — VP2.0 specification How it is read the specification, searched in full for “mint”, “issu”, “emission”, “block reward” and “print”, describes no other minting; “issu” finds only an issuer registering an asset by vote (FIG. 25). How it is read the three steps above. How it is read a reward is drawn from collected fees, and nothing in the application creates new tokens to pay it. > “the nonlinear function is equal to a square of the number of votes cast in the vote; the governance subsystem is configured to determine that the proposal has passed responsive to a participation rate meeting or exceeding a governance quorum and a total number of yes votes exceeding a total number of no votes; and” > — VP2.0 · Claim 10 How it is read on one ballot, if n votes cost n² tokens, then t tokens buy √t votes, and √100 = 10. > “Bounded-transition processing module 270, described with reference to FIG. 2, may clamp a calculated value of dynamic fee 1300 to an authorized range.” > — VP2.0 specification > “The authorized range applied to dynamic fee 1300 may, for example, extend from approximately 0.5% to approximately 2% of a transaction amount.” > — VP2.0 specification > “Clamping dynamic fee 1300 independently of an output produced by deep Q-network 1200 may reduce a likelihood that an anomalous model output produces a fee value falling outside the authorized range.” > — VP2.0 specification > “Committing an authorized range independently of the model output may, for example, advantageously prevent a deployed parameter value from exceeding a bound even where a training anomaly, a model-drift condition, or an unanticipated state-vector value would otherwise cause deep Q-network 1200 to produce an out-of-range candidate value.” > — VP2.0 specification How it is read the committed range caps the rate, and the rule and the effective interval fix how far and when it may move, all before the fee applies. > “The spending reward, the holding fee, and the transaction fee, and/or the allocations derived therefrom, may be (e.g., each) fixed, may be adjusted through a governance authorization committed by DAO governance module 300, and/or may be adjusted through a parameter-state update generated by AI-driven dynamic adjustment mechanism 101 and constrained by bounded-transition processing module 270.” > — VP2.0 specification How it is read each card names the words it rests on, and writes out the step that joins them. > “an AI-driven dynamic adjustment mechanism configured to optimize transaction fees and user rewards in real-time using a deep Q-network trained via reinforcement learning;” > — VP2.0 · Claim 1 How it is read a pool pays from what it holds; claim 11 releases a payment only if the balance after it stays at or above the floor; so the rewards paid can never exceed what has come in, and a reward set above what the fees bring in is paid only as far as the pool holds. > “As an illustrative, non-limiting example, a transaction amount of approximately one hundred dollars may result in a calculated transaction fee of approximately one percent, corresponding to approximately one dollar.” > — VP2.0 specification How it is read 5% to 10% of a purchase is more than about 1% of it. > “Some embodiments may advantageously reduce the risk of treasury depletion, such as by disbursing a proposed payment only when a resulting treasury balance would remain at or above a reserve floor.” > — VP2.0 specification How it is read fees are paid into the fund; what is paid out of it passes the check of claim 11 first. How it is read each payment goes out only if the balance after it stays at or above the floor in force, and fees only add; that holds for every payment in turn, however many there are. > “Economic-stimulation fund 400 may withhold the proposed disbursement responsive to the resulting balance falling below the reserve floor.” > — VP2.0 specification How it is read every payment out passes the floor check, and fees only add, so no payment takes the balance under the floor it is checked against. How it is read a balance either moves in a transaction or stays where it is. > “In some embodiments, economic-stimulation fund 400 may fund a liquidity-support initiative under which a portion of transaction-derived value is locked into a job-creation project or another societal initiative in exchange for a return of value to the locking network participant 110.” > — VP2.0 specification How it is read the first three steps, applied to the money the fund pays out. > “Autonomous velocity-governing operations may, for example, be implemented via the recurring, self-sustaining transaction-activity-and-circulation cycle described with reference to FIG. 1, operating without a central administrator or external subsidy.” > — VP2.0 specification How it is read every payment out returns to a wallet in VP2.0, where it pays in again or is locked into work, and the cycle needs no money from outside it; money changed out of VP2.0 leaves the cycle. How it is read money in a wallet is either spent or unspent, and pays a fee either way; money locked as savings has left the wallet for a project.