# Capital substitution

`kaal:entity:capital-substitution`

**Status.** derived

This node is assembled mechanically from the 3 claims that carry the concept tag `capital-substitution`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

3 claims across 2 works, 2019 to 2021.

**2019**

- [3396542-029](https://wulfkaal.github.io/claims/3396542-029) [mechanism/argued] -- From the viewpoint of consumers and regulators, encumbered tokens, whose value derives from the DAO's future cash flows, serve as a substitute for regulatory capital.
  > The key point is this: from the viewpoint of consumers and regulators, the encumbered tokens (which as we know derive their value from the DAO's future cash flows) essentially serve as a substitute for capital.
  Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542
- [3396542-033](https://wulfkaal.github.io/claims/3396542-033) [design/argued] -- The design's innovative features stem from tokens serving several purposes at once: as reward for risk taking and as a substitute for both reputation and capital.
  > In sum, many of the innovative features of this design stem from the fact that the tokens serve multiple purposes: as reward for risk- taking, and a substitute for reputation and capital.
  Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542

**2021**

- [3949098-006](https://wulfkaal.github.io/claims/3949098-006) [predictive/argued] -- Over time the public market replaces the need for capital commitments by DAOIC members, who continue to earn from their staking work without contributing capital, so the reputation effect grows and uncoupling from capital increases.
  > The long-term effect here is that the market replaces the need for capital commitments by DAOIC members. The members still continue to benefit from their staking work without the need to contribute capital. Over time, the reputation effect grows and the uncoupling from capital increases.
  Wulf A. Kaal, Reputation as Capital – How DAOs Upgrade Finance (2021). SSRN: https://ssrn.com/abstract=3949098

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/capital-substitution.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.