The Mechanism
The Mechanism
A social or financial entrepreneur believes she spotted a Stag — a certain opportunity that increases the payoff of its rational participants. She posts a Hunt, and individual users or agents discover it and contemplate. An agent deciding to join signs cryptographically an intent to join — an intendo — conditioned on a sufficient number of others joining too.
The signed intendos accumulate and Pack, in an opaque process, during which more agents opt in but also may opt out at will. Once some subset of agents crosses the threshold, satisfying internally the threshold conditions of all of its members, the Hunt snaps and executes together.
Glossary
Stag — Coordination market instance; defines target outcome, execution logic, and community eligibility.
Pack — Accumulation phase; intendos cluster around a Stag, aggregate state is opaque.
Hunt — Resolution: a qualifying subset is found and execution triggers atomically; remaining intendos persist for future resolution.
Intendo — A cryptographically signed conditional commitment: “I will do X if N others do X.” Supports heterogeneous thresholds — a tenured professor might come out of the closet provided 5 colleagues do so; an assistant professor might require 50.
Four Axioms
Four properties are axiomatic for the core primitive of Coordination Markets:
I. Coordinated Atomicity
The commitments of the qualifying subset execute simultaneously across all participants. No partial execution, no gradual commit — this would undermine the assurance. The pack hunts together or not at all.
II. Accumulation Opacity
No one — neither participants nor operators — can determine how close the initiative is to activation. The threshold crosses or it does not. This protects early signalers from retaliation, front-running, and social pressure.
III. Capital Multiplexing
Users can co-commit the same capital across different markets. A user backing a liquidity bootstrap and a supply lock with the same $1,000 — whatever commitment activates first applies. Crucial for capital efficiency, UX scalability, and participation in overlapping markets.
IV. Composability
The output of one market is a valid input to another, and can compose with other shared state contracts. Coordination markets as lego blocks — users switch platforms and LP positions migrate to the same venue; public endorsements commit and capital deploys to the endorsed cause — all in one atomic event.
Both composability and capital multiplexing are unique to crypto rails. Traditional payment services operate behind isolated APIs — you can’t lego-compose API calls, and you can’t pre-authorize pull-based payments without statically delegating your funds to the service provider.
Privacy and Propagation
CMs must allow shielding one’s intendo. But collaborating in a dead dark forest is unlikely to catch momentum. The design must balance privacy with social propagation.
Designated Verifiable Proofs (DVPs) resolve this tension. DVPs enable off-the-record messaging: they allow a prover to convince a peer (or set of peers via Multi-DVP) that a statement is correct whilst maintaining full deniability if the proof is leaked.
In practice: group chat messages that are internally verifiable yet practically unleakable. You can show your friends you signed an intendo without exposing yourself to the public.
A Worked Example
A stag is spotted — a better equilibrium: “Move to a new social platform if enough users commit, and pay $5/month.”
No one moves yet. Everyone waits to see whether others will move.
Pack. Users join the pack by submitting conditional commitments: “I migrate if at least N others migrate.” Each participant sets their own threshold. Commitments accumulate privately. No one risks moving alone.
Hunt. Eventually a subset of commitments satisfies all their thresholds. At that moment, the pack hunts. The migration executes atomically. Accounts activate, communities appear, and the network launches with users already there.
Composability. These hunts compose — like Lego blocks. A set of investors might sign commitments: “I invest $10 million if this hunt completes.” When the hunt resolves, all commitments execute atomically. Users move, capital deploys, infrastructure appears.
Emergent behavior. Nobody specific coordinated this or engineered society for one opportunity. Decentralized. No Leviathan, no superintelligent singleton.
The Flow
- Entrepreneur spots a Stag
- Seeds a Hunt (DAC-backed)
- Intendos accumulate (participants paid if hunt fails)
- Signals propagate peer-to-peer via DVPs
- Pack grows opaque
- Compute scans for satisfiable subset
- Threshold hits — Hunt snaps, atomic execution
The Stack
Beyond generic support for market mechanics, coordination markets require several new components:
Intendo Layer
Aggregating persistent intents of users. Limited implementations exist (CowSwap intent system), but far from the flexibility required for CM composability and multiplexing.
Pack Solver
An efficient data structure and incremental algorithmic framework to resolve pack states: “what is the current maximum subset with internally-satisfying thresholds?” For large sets of intendos including thresholds defined in participant count or capital amount, resolving belongs to the class of monotone fixed-point computation — admitting incremental algorithms of time complexity O(polylog) or O(1) amortized.
Computation Fees
A fee mechanism appropriate for the algorithmic framework. Includes both metering the cost (“computation gas”) per signed intendo and dictating the payment mechanism, potentially distributing it across the set.
Threshold FHE
A cryptographic protocol supporting opaque accumulation. Standard interactive sMPC is incompatible with continuous evaluation over an open permissionless validator set. Threshold FHE (thFHE) distributes a shared public key at the outset (DKG) and runs lightweight sMPC only for decryption. Feasibility requires mixed-mode deployment — hiding only essential parts of the computation.
Why Real-Time Decentralization
Coordination by definition leads to large market moves and cascading effects. Any gap between pack formation and execution increases the manipulation surface and multiplies pressure points.
To eliminate this gap, CMs must run on infrastructure that satisfies censorship resistance, permissionlessness, and fairness in real time. This metaproperty is what we call Real-Time Decentralization (RTD).