I have a suggestion for a piece of metadata for inclusion in the protocol. Its based on a bit of monetary economics. If the total monetary value proposition of the protocol is represented by (Price x Quantity)/Velocity, as suggested by classical monetary economics, and we are interested in solving for theoretical price/value, it would be useful to be able to track and monitor Velocity of circulation (V). Quantity is pretty easy - its circulating supply, but Velocity isn’t as simple as adding up all the ADA transacted on any given day via the block explorer, and building a time series. Some of the blockchain transactions represent real economic activity and should be included, but some (for example me transferring ADA between my own wallets) does not represent transactions, and should not be included.
Is there any way to include some meta-data flag to make a distinction between “administrative” transactions and “real” ones, so that this could be reported through the block explorer?
There is the wider issue of how we should determine which fit into which category. Perhaps it can be inferred from a flag baked into the transaction payload, or even something as simple as self-classification or “wisdom of crowds” evaluation by the staking pool participants - I’m just throwing it out there for discussion?
If this could be achieved this would give ADA an unparalleled level of transparency in its monetary statistics, which would give additional rigour to adoption metrics, would help damp speculative volatility, and give the price a more robust empirical underpinning.
Over time, I would expect the value transacted within the ADA ecosystem to increase, the velocity to increase, and the increased velocity to contribute to exponential second-order increases in utility. We can model nominal inflation/deflation through the staking process etc., so this is the missing link to really good understanding of the whole picture, and something that would help inform Treasury decisions going forward, and be useful for on-chain governance.
Any ideas out there?