# Efficiency

`kaal:entity:efficiency`

**Status.** derived

This node is assembled mechanically from the 41 claims that carry the concept tag `efficiency`. 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

41 claims across 27 works, 2011 to 2023.

**2011**

- [1908473-017](https://wulfkaal.github.io/claims/1908473-017) [mechanism/asserted] -- Contingent capital securities are likely to be more efficient than raising capital requirements, because the capital arrives only when it is needed.
  > CCS will likely be more efficient than raising capital requirements because the capital arrives only when it is needed.
  Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473
- [1908473-036](https://wulfkaal.github.io/claims/1908473-036) [mechanism/argued] -- Contingent capital with increased voting rights delivers a more flexible and efficient outcome than Chapter 11, because it requires neither court involvement nor a threshold of creditor approval.
  > The proposal in this Article would, however, create a far more flexible and efficient solution than Chapter 11. Neither court involvement nor a threshold of creditor approval would be required.
  Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473
- [1908473-039](https://wulfkaal.github.io/claims/1908473-039) [mechanism/argued] -- Contingent capital is more efficient than prepackaged plans or preplan sales because it provides a resolution mechanism outside formal proceedings and free of their restrictions, since the Bankruptcy Code does not regulate conversion or the use of increased voting rights.
  > CCS could be more efficient because CCS could provide the basis for a resolution mechanism outside of formal resolution proceedings and without the restrictions of prepackaged plans or preplan sales. The Bankruptcy Code does not regulate CCS conversion or the use of increased voting rights.
  Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473

**2012**

- [1998455-009](https://wulfkaal.github.io/claims/1998455-009) [mechanism/argued] -- Installing contingent capital can be more efficient than raising capital requirements, because the capital injection becomes available only when it is needed and only enough securities convert to recapitalize the firm.
  > Installing contingent capital could be more efficient than raising capital requirements because the capital injection is available only when it is needed.
  Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012). SSRN: https://ssrn.com/abstract=1998455

**2017**

- [2998033-023](https://wulfkaal.github.io/claims/2998033-023) [mechanism/asserted] -- Because blockchain is transparent, verifiable, self authenticating and self enforcing, financial transactions can be executed instantaneously at near zero transaction cost, which raises efficiency for businesses and individuals exponentially.
  > Because blockchain technology is transparent, verifiable, self- authenticating, and self-enforcing, financial transactions can be executed instantaneously at near zero transaction costs, increasing the efficiency for business and individuals exponentially.
  Wulf A. Kaal, Blockchain Innovation for Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2998033
- [3067615-001](https://wulfkaal.github.io/claims/3067615-001) [mechanism/argued] -- Initial Coin Offerings are the most efficient means of financing entrepreneurial initiatives in the history of capital formation, because they minimize transaction cost and democratize finance while dis-intermediating banks.
  > Initial Coin Offerings (ICOs) are the most efficient means of financing entrepreneurial initiatives in the history of capital formation. ICOs minimize transaction cost and democratize finance while dis-intermediating banks.
  Wulf A. Kaal, Marco Dell'Erba, Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags (2017). SSRN: https://ssrn.com/abstract=3067615
- [3071378-032](https://wulfkaal.github.io/claims/3071378-032) [empirical/argued] -- Eliminating bias-driven inefficiencies removes the associated diseconomies of scale and waste, estimated at around one trillion dollars annually in the existing centralized business infrastructure.
  > eliminates bias-driven inefficiencies in the market economy and the associated diseconomies of scale and waste, which have been estimated at around $1 trillion dollars annually in the existing centralized business infrastructure.103
  Wulf A. Kaal, Blockchain Technology and Race in Corporate America (2017). SSRN: https://ssrn.com/abstract=3071378
- [3071378-038](https://wulfkaal.github.io/claims/3071378-038) [mechanism/argued] -- Unlike traditional hierarchical organizations where face-time and unproductive meetings are the norm, the self-governing DAO token optimizer avoids corporate hierarchy inefficiencies and the bad outcomes that come from top-down direction.
  > Unlike in traditional hierarchical organization where face-time and unproductive meetings are the norm, the self-governing DAO token optimizer avoids any such corporate hierarchy inefficiencies and frees herself from top-down inefficiencies and bad outcomes.
  Wulf A. Kaal, Blockchain Technology and Race in Corporate America (2017). SSRN: https://ssrn.com/abstract=3071378

**2018**

- [3249860-041](https://wulfkaal.github.io/claims/3249860-041) [mechanism/evidenced] -- Tokens experimenting with alternative consensus protocols typically change the transfer process in an effort to become more efficient.
  > Tokens experimenting with alternative consensus protocols often change the transfer process in an effort to become more efficient.
  Wulf A. Kaal, Crypto Economics - The Top 100 Token Models Compared (2018). SSRN: https://ssrn.com/abstract=3249860
- [3266953-039](https://wulfkaal.github.io/claims/3266953-039) [design/argued] -- A decentralized network of DAOs is significantly more efficient than a centralized platform because the centralized intermediary fee, twenty five percent in Uber's case, can instead be shared between the driver members and the passengers.
  > Second, the decentralized network of DAOs is significantly more efficient because the centralized fees, e.g. in Uber's case 25%, can be shared between the drivers / DAO members and the passengers.
  Craig Calcaterra, Wulf A. Kaal, Gopinath Sivalingam, Reputation Protocol for the Internet of Trust - Conceptual Whitepaper (2018). SSRN: https://ssrn.com/abstract=3266953

**2019**

- [3373393-002](https://wulfkaal.github.io/claims/3373393-002) [predictive/asserted] -- Blockchain technology produces a substantial increase in the efficiency of the agency relationship and lowers agency costs by orders of magnitude.
  > Blockchain technology facilitates a substantial increase in efficiency in the agency relationship and lowers agency costs in orders of magnitude.
  Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393
- [3373393-027](https://wulfkaal.github.io/claims/3373393-027) [mechanism/asserted] -- The removal of checks and balances, agent monitoring, audit requirements, disclosure regimes, market pressure, and executive compensation schemes produces a qualitative shift in efficiency in the agency relationship and in corporate governance overall.
  > The removal of checks and balances in corporate governance, monitoring of agents, audit requirements, disclosure regimes, market pressure, executive agent compensation schemes, among many others, provides a qualitative shift in efficiency in the agency relationship
  Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393
- [3402701-023](https://wulfkaal.github.io/claims/3402701-023) [condition/argued] -- Determining what fraction of a currency is hot money is necessary for efficient defense of its stability, because the reserve requirement follows from that ratio rather than from a blanket full-backing rule.
  > Therefore determining the fraction of a currency that is hot money is necessary for efficient defense of its stability
  Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019). SSRN: https://ssrn.com/abstract=3402701
- [3402701-031](https://wulfkaal.github.io/claims/3402701-031) [design/argued] -- When a fundamental shift in value occurs, repegging the currency at its more accurate value is more efficient than soldiering on with tax mechanisms to restabilize at the old peg.
  > but it is more efficient to repeg the currency after discovering its more accurate value
  Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019). SSRN: https://ssrn.com/abstract=3402701
- [3405401-005](https://wulfkaal.github.io/claims/3405401-005) [mechanism/asserted] -- Smart contracts benefit business by simplifying and automating transactions, removing transaction costs, and creating certainty for counterparties, and they are inexpensive to run on a blockchain.
  > Smart contracts are intended to simplify and automate business, removing transaction costs and creating certainty for counterparties. They make business transactions fully secure and efficient. It is also inexpensive to run smart contracts on a blockchain.
  Wulf A. Kaal, Decentralized Commerce – A Primer on Why Decentralized Reputation Verification Systems Are Needed (2019). SSRN: https://ssrn.com/abstract=3405401
- [3405401-007](https://wulfkaal.github.io/claims/3405401-007) [mechanism/asserted] -- The inherent mathematical logic of computerized code in smart contracts can clarify the parties' intent optimally, which increases certainty, creates efficiency, and thereby incentivizes commerce.
  > The inherent mathematical logic of computerized code in smart contracts can optimally clarify parties' intent. It also increases certainty and creates unparalleled efficiency which in turn incentivizes commerce.
  Wulf A. Kaal, Decentralized Commerce – A Primer on Why Decentralized Reputation Verification Systems Are Needed (2019). SSRN: https://ssrn.com/abstract=3405401
- [3409548-008](https://wulfkaal.github.io/claims/3409548-008) [mechanism/argued] -- In the Numerai model, using artificial intelligence to synthesize competing data scientist models into a meta model raises efficiency and improves capital allocation by reducing overhead costs.
  > In the Numerai model, the use of artificial intelligence increases efficiency and optimum capital allocation by reducing overhead costs.
  Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548
- [3441904-009](https://wulfkaal.github.io/claims/3441904-009) [mechanism/argued] -- DAOs can be more productive than hierarchical organizations because their information allocation and feedback effects allow them to distribute the optimal amount of power to the optimal talent at the optimal point in time.
  > DAOs can be more productive in comparison with hierarchical organizations because the information allocation and feedback effects allow them to distribute the optimal amount of power to the optimal talent at the optimal point in time.
  Wulf A. Kaal, Blockchain-Based Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3441904

**2020**

- [3606663-027](https://wulfkaal.github.io/claims/3606663-027) [mechanism/argued] -- DeFi is more efficient than existing financial intermediation including FinTech, and that superior efficiency traces to its extensive reliance on code and automation, which removes large parts of the human element and the errors and inefficiencies that come with it.
  > DeFi is more efficient than existing financial intermediation, including FinTech. Its superior efficiency can be traced to its extensive reliance on code and automation that remove large parts of the human element and the associated errors and inefficiencies.
  Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663
- [3606663-032](https://wulfkaal.github.io/claims/3606663-032) [mechanism/argued] *(failure mode)* -- Because human interactions in business are often too complex to be fully codified objectively, DeFi systems that exclude all non objective information from their analysis do not fully utilize available information, which limits their efficiency and usefulness.
  > However, human interaction in business are often too complex to be fully codified objectively. By excluding all non- objective information from the product analysis, all available information may not be fully utilized which limits efficiency and potential usefulness of DeFi
  Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663
- [3709041-010](https://wulfkaal.github.io/claims/3709041-010) [mechanism/argued] -- Decentralism generates efficiency through higher levels of connectivity rather than through the linear cost cutting and economies of scale that capitalism and socialism debate.
  > decentralism creates efficiency not in linear forms but via higher levels of connectivity
  Kaal, Blockchain Technology for Good (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3709041

**2021**

- [3782191-001](https://wulfkaal.github.io/claims/3782191-001) [mechanism/asserted] -- Centralized organization achieves efficiency through hierarchy: hierarchical structures let centrally organized entities allocate resources with minimal energy loss and identify and remove waste in the system.
  > Because of hierarchical structures, centrally organized entities allocate resources with minimal loss of energy and can identify and remove waste in the system.
  Craig Calcaterra, Wulf A. Kaal, Preface to (2021). SSRN: https://ssrn.com/abstract=3782191
- [3782191-025](https://wulfkaal.github.io/claims/3782191-025) [mechanism/argued] -- Hierarchical centralization is optimally efficient for making big decisions affecting an entire organization, which is why it has historically outcompeted every other organizational structure, whether corporation, army, or government.
  > Hierarchical centralization is optimally efficient for making big decisions that affect the entire organization, and so it has historically outcompeted every other organiza- tional structure, be it corporation or army or government
  Craig Calcaterra, Wulf A. Kaal, Preface to (2021). SSRN: https://ssrn.com/abstract=3782191
- [3782191-033](https://wulfkaal.github.io/claims/3782191-033) [mechanism/argued] -- Centralized organizations are more effective and efficient than decentralized ones at the singular task they were designed for, because an optimally centralized structure has no redundancy while decentralization takes longer to locate the right components within its network.
  > Given a specific task, centralized organizations are more effective at the task they are designed for than decentralized organizations.
  Craig Calcaterra, Wulf A. Kaal, Preface to (2021). SSRN: https://ssrn.com/abstract=3782191
- [3782192-003](https://wulfkaal.github.io/claims/3782192-003) [condition/argued] -- Centralization is an optimal and natural evolutionary solution to most specific organizational problems, but only under static conditions, and competition is the most common driving force that produces a centralized structure.
  > Centralization is an optimal and natural evolutionary solution to most specific organizational problems, under static conditions. Competition is the most common driving force that leads to a centralized structure.
  Craig Calcaterra, Wulf A. Kaal, Introduction to Decentralization (2021). SSRN: https://ssrn.com/abstract=3782192
- [3782192-020](https://wulfkaal.github.io/claims/3782192-020) [mechanism/argued] -- Governing by transcendental values, ideals that everyone understands but no one can concretely attain, reduces members' motivation to probe the limits of acceptable behavior and therefore reduces the policing the organization must pay for.
  > If the or- ganization is governed by transcendental values—ideals that everyone understands yet they can never practically attain or properly instantiate concretely—then people have less motivation to probe the limits of acceptable behavior. Less policing is then required
  Craig Calcaterra, Wulf A. Kaal, Introduction to Decentralization (2021). SSRN: https://ssrn.com/abstract=3782192
- [3782192-025](https://wulfkaal.github.io/claims/3782192-025) [mechanism/argued] -- Advances in technology have given decentralized systems the efficiency they lacked in previous eras, the very deficiency that allowed them to be outcompeted by centralized systems; this is the book's central thesis.
  > The goal of this book is to show that advances in technology have given decentral- ized systems the efficiency they have lacked in previous eras and that allowed them to be outcompeted by centralized systems.
  Craig Calcaterra, Wulf A. Kaal, Introduction to Decentralization (2021). SSRN: https://ssrn.com/abstract=3782192
- [3782193-016](https://wulfkaal.github.io/claims/3782193-016) [mechanism/argued] -- Centralization is a powerful mechanism for rapidly building an efficient organization aimed at solving one specific problem, such as war in pre-unified China.
  > Centralization is a powerful mechanism for rapidly building an effi- cient organization for solving a specific problem (e.g., war in pre-unified China).
  Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193
- [3782198-031](https://wulfkaal.github.io/claims/3782198-031) [empirical/evidenced] *(failure mode)* -- Proof of work consensus is energetically wasteful because the entire global network redundantly computes wrong nonces, with the Bitcoin network consuming as much energy as the country of the Czech Republic.
  > The Bitcoin network is performing about #)!% =K55,555,555,555,555,555,555 hashes every second in June )5)5. That requires as much energy as the entire country of the Czech Republic.
  Craig Calcaterra, Wulf A. Kaal, Contemporary Decentralization (2021). SSRN: https://ssrn.com/abstract=3782198
- [3782205-018](https://wulfkaal.github.io/claims/3782205-018) [failure/argued] *(failure mode)* -- Bitcoin proved that a decentralized digital representation of value is possible, but it is not efficient enough for wide use because the rest of a decentralized economic environment does not yet exist around it.
  > Bitcoin proved it was possible to create a decentralized digital representation of value. Because this proof of concept technology doesn't have the rest of a decentralized eco- nomic environment to exist in, it is not efficient enough to use widely.
  Craig Calcaterra, Wulf A. Kaal, Eight Institutions for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782205
- [3782205-020](https://wulfkaal.github.io/claims/3782205-020) [failure/asserted] *(failure mode)* -- Ethereum will not be efficient until it operates inside a robust decentralized economy, and it will not last at all unless its governance is fixed.
  > Like Bitcoin, it won't be efficient until it lives in a robust decentralized economy. It won't last unless its gov- ernance is fixed.
  Craig Calcaterra, Wulf A. Kaal, Eight Institutions for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782205
- [3782210-003](https://wulfkaal.github.io/claims/3782210-003) [failure/argued] *(failure mode)* -- Strict legal enforcement is an inefficient remedy for opportunism because every unit of energy devoted to policing is energy that could instead have been used to cooperate productively.
  > Strict legal enforcement is not efficient, because all energies devoted to policing are ener- gies that could be used to cooperate productively.
  Craig Calcaterra, Wulf A. Kaal, The Importance of Reputation for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782210
- [3782210-036](https://wulfkaal.github.io/claims/3782210-036) [design/argued] -- A meaningful reputational system with the potential for retrospective review would let a network rely on fewer nodes, since randomly selected nodes staking their reputation can do the polling work and be reviewed and punished later, which is one reason proof of stake is more efficient than proof of work.
  > But if we had a meaningful reputa- tional system with the potential for review, we could rely on fewer nodes. This mech- anism is one reason proof of stake is more efficient than proof of work.
  Craig Calcaterra, Wulf A. Kaal, The Importance of Reputation for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782210
- [3782214-012](https://wulfkaal.github.io/claims/3782214-012) [definitional/asserted] -- The authors stipulate corruption in an organization as any action that benefits a minority at the greater expense of the group, and locate its source in power that is distributed inappropriately as measured by efficiency.
  > We broadly define corruption in an organization as any action that benefits a mi- nority at the greater expense of the group. Corruption arises when power is distrib- uted inappropriately as measured by efficiency.
  Craig Calcaterra, Wulf A. Kaal, Decentralized Governance (2021). SSRN: https://ssrn.com/abstract=3782214
- [3782217-005](https://wulfkaal.github.io/claims/3782217-005) [failure/argued] *(failure mode)* -- Where a DAO is automated around a single centralized point of failure, the work of decentralizing and giving members redundant power is wasted, because the point of failure functions as a supreme leader and full centralization would be more efficient.
  > In that case it would be more efficient to completely centralize around the single point of failure the DAO is automated around. The effort you're making to decentralize and give each member redundant power is wasted, because the point of failure might as well be the supreme leader.
  Craig Calcaterra, Wulf A. Kaal, The Importance of History In Decentralization (2021). SSRN: https://ssrn.com/abstract=3782217
- [3782220-003](https://wulfkaal.github.io/claims/3782220-003) [mechanism/argued] -- Efficiency is only meaningful relative to goals, and understanding goals is the same as understanding values, so maintaining a system's efficiency requires adherence to its values.
  > In order to maintain efficiency, we must understand the answer to the question, "Efficiency in the pursuit of what goals?" Understanding our goals is effectively the same as understanding our values. Therefore, to maintain the system, to maintain its efficiency, we must adhere to our values.
  Craig Calcaterra, Wulf A. Kaal, The Importance of Transcendental Unifying Values for Decentralization (2021). SSRN: https://ssrn.com/abstract=3782220
- [3808852-033](https://wulfkaal.github.io/claims/3808852-033) [failure/argued] *(failure mode)* -- Decentralization is not always efficient, because centralized economies of scale can create the near-optimal efficiencies for economic growth and decentralization may therefore result in the loss of economies of scale.
  > In fact, decentralization may not always be efficient as centralized economies of scale create the near-optimal efficiencies for economic growth.
  Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852
- [3808867-006](https://wulfkaal.github.io/claims/3808867-006) [mechanism/asserted] -- Decentralism generates efficiency through higher levels of connectivity rather than through the linear cost reduction mechanisms that capitalism and socialism debate.
  > decentralism creates efficiency not in linear forms but via higher levels of connectivity
  Wulf A. Kaal, How Decentralized Systems Can Upgrade AI (2021). SSRN: https://ssrn.com/abstract=3808867
- [3808867-032](https://wulfkaal.github.io/claims/3808867-032) [failure/argued] *(failure mode)* -- Because of its autocratic and efficiency focused tendencies, centralized algorithmic automation is prone to create structures for the evolution of dataism, which ultimately denies the value of human inputs and individualism.
  > Because of it autocratic and efficiency focused tendencies, centralized algorithmic automation is prone to create structures for the evolution of dataism, which ultimately denies the value of human inputs and individualism.
  Wulf A. Kaal, How Decentralized Systems Can Upgrade AI (2021). SSRN: https://ssrn.com/abstract=3808867
- [3808873-011](https://wulfkaal.github.io/claims/3808873-011) [mechanism/argued] *(failure mode)* -- Centralization follows an S curve: in the expansion phase the benefits of centralizing power, capital and control rise faster than its costs, but in the decline phase the rising costs of centralization, including corruption, diseconomies of scale and cronyism, can no longer be offset, so centralized systems function less optimally and less efficiently.
  > Because of the increase in the cost of centralization, the benefits of centralization can no longer offset and outweigh the cost. As a result, centralized systems function less optimally and less efficiently.
  Wulf A. Kaal, Decentralization Neutralizers (2021). SSRN: https://ssrn.com/abstract=3808873

**2023**

- [4529715-016](https://wulfkaal.github.io/claims/4529715-016) [failure/argued] *(failure mode)* -- Without clear and effective governance mechanisms, DAO decision-making becomes slow and inefficient, delaying important changes and the resolution of internal issues.
  > Without clear and effective governance mechanisms, decision-making processes can become slow and inefficient, leading to delays in implementing important changes or addressing issues within the DAO.
  Wulf A. Kaal, Josh Bykowski, Decentralized Autonomous Organizations (DAO) – A Market Meta Analysis (2023). SSRN: https://ssrn.com/abstract=4529715

## 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/efficiency.md | sha256sum

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