There are a number of direct protocols and protections that act as fundamental backstops in protecting a token’s value. These protocols are designed to install trust in GST and in the stability of our token’s price on the open market.

Note: Some of the protocols listed here are planned to be implemented in the future when possible. 

Value Transparency

Land deeds and appraisals will be verified and placed on-chain, thus ensuring full transparency regarding land holdings and accuracy in the valuation of DAO land. Access to view all deeds and appraisals will be available for both members and non-members. This is designed to install trust in the valuation of GST.

Land Deeds

• Purpose: Proves ownership of land
• Validation: 3rd party multi-signature verification process
• Occurrence: Once and locked on-chain

Appraisals

• Purpose: Proves equity held by nonprofit 
• Validation: 3rd party appraisal with multi-signature verification process
• Occurrence: Annual (range will be between 6-18 months)

The appraisal process will impact the overall value per token. In the diagram below we have visualised the appraisals being added on-chain alongside the land deeds. Though land deeds only need to be placed on-chain once (upon minting), appraisals must be added regularly to ensure our total land equity is accurately calculated to provide a trusted value or cost per token.

The minting price may increase or decrease over time as land values change, therefore the value per token will also change as this mirrors the land value, as illustrated in the diagram above. 

Liquidation 

Although we plan to hold and protect land forever, we cannot force DAO members to keep said land. This is the rationale behind the liquidation protocols detailed below (for full details view the Constitution). 

Partial Liquidation

• External Governments: Should we be forced to sell land due to national laws and regulations, proceeds will be used to purchase more land which DAO members will be able to vote on.
• DAO: Members can also voluntarily request that land be sold off – in order for this request to proceed to an actual sale, the DAO will have to vote in favour of a voluntary liquidation of particular parcels of land.
• Treasury or Commercial Ltd company: Should either off-chain entity wish to sell land for a reason other than in adherence to national laws this will also require a DAO vote. 

Total Liquidation

• DAO members can vote to liquidate all on-chain land assets with the proceeds distributed proportionately among them. This may not provide a 1:1 value, as in a total liquidation event, the sale price may not equate to the land’s actual value as a large “sell-off” could flood the market. To reduce this impact we would gradually sell land off over a responsible period of time. There could also be parcels of land that are locked and can only be sold to certain groups or for certain uses, which could also impact the sale price and time. 

It is also important that it remains possible, though improbable, for DAO land to be sold in order for GST to retain its value. If something can never be sold, does it have a value? The liquidation protocols listed in the Constitution are designed to address this. 

Liquidity Pool

This protocol is planned to be introduced at a later phase providing regulatory and financial conditions permit it. This will not be implemented upon launch and is also dependent on DAO vote.  

The target is to have a liquidity pool amounting to a percentage of the total value of all held land, as set by the DAO members. It is likely this will consist of a fiat stablecoin, enabling our members to liquidate their GST, although DAO members will be able to vote on the holdings. 

Land is an illiquid asset, therefore to protect both GSTs valuation and our members financial security this protocol will be important. It must be noted that DAO members will be able to vote on whether to increase or decrease the set percentage dependent on their collective risk appetite. It must also be noted that this will only be implemented when the legal and financial conditions allow. 

Asset overdraft 

This protocol is planned to be introduced at a later phase providing regulatory and financial conditions permit it. This will not be implemented upon launch and is also dependent on DAO vote. 

The aim of this protection measure is to ensure the value per token does not decrease significantly. For example, should there be an economic depression whereby land prices decrease, the asset overdraft is designed to stabilise the value per token. It is worthwhile noting that once land values recover, the assets are removed from the green standard calculation and returned to a separate overdraft wallet that sits outside the purview of the value per token calculation.

This protection will be funded using different sources, including profit or revenue share agreements with Land Stewards, any land or financial donations, government grants or any other form of assets that are acceptable to our members. 

The overdraft facility may represent a percentage of the total value of land assets and may be set by DAO members and may be comprised of the following assets:

• Additional land/property
• Other digital-assets
• Gold and other precious-metals
• Index stock portfolio etc 

Below is an example of how sudden drops in the value of held land would be impacted with a range of 5% – 20% of the total land value in secondary assets held in the asset overdraft facility. The numbers are based on $100m in land with 100m GST in circulation with a value per token of $1.