Wardeum Protocol: Value Transfer

A value transfer protocol enables compensating nodes in a distributed system from customers for their services. While a payment mechanism is part of the solution, the full benefits are lost if customers must pay each node individually and directly, and if payments are valid regardless of whether the node provides service.

To address this, we propose an out-of-band payment intermediary between customers and service providers. This intermediary defines service parameters and facilitates fund disbursement based on proof of service. Proof of service, including share tokens generated by customers and embedded within traffic, serves as both authorization for service providers and a representation of value for the service provided. Service providers collect these share tokens and submit them for validation and compensation. Compensation is distributed proportionally among service providers based on the number of valid share tokens they accumulate relative to the total number submitted for a specific service plan.

INTRODUCTION

In a distributed system, achieving widespread adoption and scalability is often hindered by significant challenges. While ideology may drive initial participation, sustaining long-term scalability and ensuring fair compensation for service providers necessitates a robust economic incentive mechanism.

To tackle this issue, we advocate for the implementation of generic abstraction layers capable of accommodating various usage profiles and requirements. These layers would decentralize accounting, authentication, and authorization processes, fostering equal participation within an open marketplace.

This paper introduces a solution centered around a proportional share-based value transfer protocol designed specifically for distributed systems, with a focus on the internet's distributed traffic routing network layer. The proposed economic incentive mechanism aims to guarantee equitable compensation for services rendered.