A Deep Dive into the Inspiration Behind V God’s Endorsement of Orb Land: Hauser Tax, Shared Ownership, and Antitrust

Author: @Web3Mario

Introduction: On May 21, 2024, Vitalik liked a project called orb.land on Warpcast. After delving into it, I found the design philosophy behind it quite intriguing. So, I spent some time reading the book "Radical Markets" and have some insights I would like to share. Of course, I found a detailed article introducing the project itself, which I hope will help everyone understand it better. In general, the book proposes a left-leaning ownership system—shared ownership mechanism—paired with the Habermas tax model, aimed at addressing social inequities caused by resource monopolization. This is enlightening for solving the current issues faced by the Web3 industry, such as the recently popular overvalued VC tokens.

What Does "Radical Markets" Actually Discuss?

First, I would like to briefly introduce some basic information about this book, which is titled "Radical Markets: Uprooting Capitalism and Democracy for a Just Society," co-authored by Glen Weyl and Eric Posner in 2020. Glen Weyl is a principal researcher at Microsoft Research and a visiting professor at Yale University, focusing on innovative research in market design and public policy. Eric Posner is a professor at the University of Chicago Law School and a well-known legal scholar whose research areas include contract law, international law, and legal theory.

Overall, this book aims to address a series of deep-rooted issues in modern capitalism and democratic systems. Specifically, it involves the following key issues:

1. Wealth and Income Inequality: In modern society, the phenomenon of wealth and income inequality is becoming increasingly severe. Traditional capitalist systems often lead to a small number of people accumulating vast wealth while the majority face economic pressure. The authors argue that this inequality is not only unjust but also leads to social and economic instability.

2. Inefficient Allocation of Resources and Assets: Many resources and assets cannot be effectively utilized under the current market system. For example, in the land and real estate markets, many assets are left idle due to speculation and hoarding, failing to realize their economic potential. This not only wastes valuable resources but also exacerbates housing and land shortages.

3. Flaws in Democratic Systems: The current democratic systems have many issues, such as flaws in voting systems, political polarization, and excessive influence from interest groups. These problems make it difficult for democratic systems to truly represent the interests of the people, leading to inefficiency and unfairness in policy-making.

4. Global Immigration Issues: Existing immigration policies are often subject to strict national controls, limiting the free movement of labor. This not only affects individuals' economic opportunities but also hinders overall global economic development. The authors believe that the free movement of immigrants can significantly improve the efficiency of global resource allocation, promoting economic growth and social progress.

5. Data and Privacy Rights Issues: In the era of big data, personal data has become an important economic resource. However, the control of most data is held by a few large companies, limiting individuals' rights to use and benefit from their own data. The authors propose that individuals should be granted more data rights to achieve fairer data usage and benefit distribution.

6. Market Monopolies and Insufficient Competition: Many industries face serious market monopoly issues, with large companies controlling the market through mergers and acquisitions, hindering fair competition and innovation. The authors argue that stricter antitrust policies are needed to break these monopolies and promote fair and healthy market development.

In response to these issues, the book offers several solutions, summarized as five points:

• Shared Ownership: Weyl and Posner suggest adopting a system called "Common Ownership Self-Assessed Tax" (COST). This system keeps all assets in a state of continuous public auction through self-assessment and public pricing, thereby reducing monopolistic behavior and promoting effective resource utilization, with this self-assessment tax being the so-called "Habermas tax."
• Voting Reform: They propose "Quadratic Voting," where each citizen has a certain number of voting credits that can be allocated based on the importance of an issue. This can more accurately reflect public preferences on different topics, preventing minority opinions from being overlooked.
• Immigration Policy: The authors suggest establishing a "Labor Market Auction" to determine the number and conditions of immigrants through bidding. This method aims to more effectively utilize the economic potential of immigrants and optimize the allocation of global labor resources.
• Data Rights: The book also discusses the property rights of personal data, advocating for individuals to have ownership and control over their data, ensuring that its use truly benefits the data creators rather than just large tech companies.
• Antitrust Policies: They emphasize the need for stronger antitrust laws to prevent market monopolies and advocate for the decentralization of economic power among large enterprises to promote fair competition and innovation.

It can be said that the economic model designed by Orb Land for Web3 personal consulting services refers to the first mechanism, namely the Common Ownership Self-Assessed Tax system, hereinafter referred to as the shared ownership system. So what is the shared ownership system, and what effects does it have?

The Shared Ownership System Brings Liquidity to Assets Through Coercive Means, Avoiding Unfair Issues Caused by Monopolies

The shared ownership system is a social resource allocation system, and its design mainly includes the following three aspects:

1. Self-Assessment and Public Pricing: This system requires each asset owner to publicly self-assess the value of their assets. This includes all types of property, such as houses, land, and commercial assets. The self-assessed price is not only determined by the owner but is also public, allowing anyone to see this price.

2. Continuous Auction Mechanism: At any time, anyone can purchase the asset at the owner's self-assessed price. This means that owners must be very careful in setting their assessment prices because if set too low, they may lose their property. Additionally, to prevent owners from overestimating their asset's value to avoid potential transactions, they will be required to pay a tax based on a certain percentage of the self-assessed price. This tax can range from 1% to 7% of the asset's value, depending on specific policies, and this tax is also referred to as the "Habermas tax," inspired by the concept proposed by economist Arnold Habermas in the 1960s.

3. Use of Tax Revenue: The collected taxes will serve as public revenue to provide public services and infrastructure or be distributed to communities to support economic development. Meanwhile, this tax mechanism can replace or supplement traditional property taxes, simplifying the tax system and increasing government revenue.

The design of the above mechanisms brings several benefits. First, this mechanism can effectively reduce monopolies and resource waste. Since all assets are in continuous public auction, monopolistic holding of resources will be reduced, and resource allocation will become more efficient. Additionally, people will be more proactive in using and developing their assets, as the cost of holding unused assets increases. Second, it promotes economic liquidity; the public self-assessed asset pricing and continuous auction mechanism will enhance market liquidity, allowing assets to be transferred more quickly and reducing market rigidity. At the same time, businesses and individuals can more easily access resources, driving innovation and economic activity. Finally, it increases fairness and social welfare; the taxes collected through this system can be used for public projects and welfare, improving the overall quality of life in society. This approach can help reduce extreme wealth and resource inequality.

Potential Impact of the Shared Ownership System on the Web3 World

Next, let’s look at how Orb Land utilizes this concept to design a Web3 personal consulting service system. In simple terms, some expert users can generate an NFT through Orb Land, and anyone holding that NFT can consult the issuer with questions. This NFT incorporates a shared ownership mechanism; first, when a user purchases the NFT, they must set a public selling price, and others can buy the NFT at that price anytime, anywhere. Secondly, when holding the NFT, the holder must bear the high Habermas tax, thus preventing users from setting exorbitant selling prices to avoid the NFT being sold. All Habermas taxes and royalties from NFT transactions will belong to the issuer, while NFT holders have the ability to rate the responses given by the issuer.

The reason for designing such a mechanism is that Orb Land aims to provide a continuous cash flow for experts as NFT issuers, ensuring their motivation to actively provide valuable answers. However, I believe this does not fully leverage the core advantages of the mechanism because, in this scenario, the NFT represents the right to consult a specific expert user, which is not a scarce resource. It is difficult to extract monopolistic profits through monopolization. For example, if you own an NFT issued by Vitalik, you could monopolize his speaking rights, turning him into your exclusive consultant, while others would be unable to receive any advice from him. This is clearly absurd! Therefore, the value of this model in this use case appears unsatisfactory, as it merely aims to promote rapid circulation of NFTs through taxation and increase the issuer's revenue, making the mechanism very unfriendly to holders. Meanwhile, if this mechanism is only used for price discovery of an asset, you will find that its efficiency is far lower than that achieved through free market policies, which determine pricing based on supply and demand in the market.

So, what is the potential impact of the shared ownership system on the Web3 world? In simple terms, this mechanism is applicable where the problems caused by monopolies are most severe. Here, I would like to propose a scenario, namely the recently popular issue of overvalued VC tokens. The reason why overvalued VC tokens are a tool for cutting retail investors is that the tokenomics design of most Web3 projects leads to a gradual evolution into an oligopolistic market as VC tokens are continuously unlocked. Meanwhile, due to the significant advantage of VC funding compared to retail investors, this gives VCs pricing power. Thus, VCs can inflate secondary market transaction prices through high valuations, thereby earning monopolistic profits. The reason for the low liquidity is that the number of retail investors willing to take over is limited and cannot absorb the large-scale sell-off by VCs in the short term. Therefore, to maintain profits, VCs typically choose to sell gradually. In this scenario, if Web3 projects combine the shared ownership system to redesign their tokenomics, it would be exciting! As for specific proposals, I welcome everyone to discuss together.