Status: pre-launch. This page describes target design; this document does not establish a deployed service.
Phi-Split: The Equity Market Mechanism
PRISM verifies decisions. Phi-Split routes revenue into sovereign wallets.
These are two separate mechanisms that are easy to confuse because both sit at the constitutional layer. PRISM is the collective-authorization verifier for public DAVs (see Typed Authority); Phi-Split is the equity and revenue-routing mechanism this page describes. Neither is represented as live.
This page describes the intended Phi-Split market architecture. Read issuance, buyback, and order-book language below as target design unless a narrower runtime proof has explicitly closed the lane.
The retained Phi-Split research discusses issuance, pricing, buybacks and order-book mechanisms. This page does not establish adopted LP-100 rights, distribution terms or implementation.
Two Separate Mechanisms
| Mechanism | Applies To | Description |
|---|---|---|
| PRISM (AUTHORIZATION) | Public DAVs | the signer(s) required by applicable law, the entity's governing instrument, or a valid competent mandate bind the exact consequence in a complete valid decision receipt; PRISM verifies only; AI/caste seats remain unsigned. |
| Phi-Split research | Proposed distribution models | Rights, recipients, rates and wallet responsibilities require separate owner reconciliation. |
Private natural-principal and public-DAV authorization paths are not interchangeable:
- Natural Person's private act → under applicable law, the natural principal signs the exact private act with their own key
- Public-DAV consequence → the signer(s) required by applicable law, the entity's governing instrument, or a valid competent mandate bind the exact consequence in a complete valid bound PRISM decision receipt; PRISM records and verifies only; AI/caste seats stage unsigned proposals; software deterministically carries out only that exact bound consequence
The repository supplies no singleton or multi-signer default for the public DAV; applicable law, its governing instrument, or a valid competent mandate supplies the signer(s), threshold, and procedure. PRISM records and verifies externally created authority evidence; it is neither a collective decision-maker, rail nor artificial signer. Phi-Split, described below, is a separate unresolved revenue proposal.
Current reading — 2026-09-27
This compatibility page preserves earlier Phi-Split issuance and distribution proposals. PRISM only records and verifies externally created authority evidence; it is not a collective decision-maker. Dividend, reinvestment, buyback, dilution and recipient-right alternatives are not reconciled here. No percentage, tax treatment or continuous liquidity is promised. [I]
This is an editorial boundary, not a new runtime contract, upstream repeal or proof of adoption. See current status and the product roles. Original revision dates remain as recorded below.
Historical research draft — retained on 2026-09-27; not current terms or implementation instructions
Revenue Splitting: The VMOSK Distribution
Revenue collected (η=0: only on value created) flows through Phi-Split:
Revenue IN (η=0: only on value created)
│
▼
┌──────────────────────────────────────────┐
│ PHI-SPLIT │
│ Splits revenue into sovereign wallets │
│ across the VMOSK levels below. │
└──────────────────────────────────────────┘
│
├── V → Vision seat → sovereign wallet
├── M → Mission seat → sovereign wallet
├── O → Objectives seat → sovereign wallet
├── S → Strategies seat → sovereign wallet
├── K → KPIs seat → sovereign wallet
└── A → Agent seats → sovereign wallets
The VMOSK vote: The Phi-Split council participants vote on the percentage distribution of revenue across VMOSK levels. Each vote is constitutional — once passed, the distribution is automatic and irreversible until re-voted.
Five Components
1. Opening Sale
The initial distribution of LP-100 tokens when a DAV launches.
- Mechanism: Target design: order book, not batch auction. Buyers place limit orders at their chosen price. Sellers (the DAV genesis) fill orders from highest bid downward.
- Why order book: Batch auctions hide price discovery. An order book reveals demand at every price level. Transparency >= 90% (Gate B) requires that buyers know what they are paying relative to others.
- Proceeds: In the target design, SKY received from the Opening Sale enters the DAV treasury, subject to phi-split (61.8% to equity holders, 38.2% to operations).
2. Faucet
Continuous, controlled dilution for growth capital.
- Truth-gated (Gate B): In the target design, the Faucet only operates when the DAV's Transparency score is >= 90%. Below 90%, the Faucet closes. No transparency, no new equity.
- OCR > 1: The On-Chain Revenue ratio must exceed 1 (revenue > expenses). Unprofitable DAVs cannot dilute.
- 3% dilution cap: Maximum 3% of outstanding LP-100 per period. This is a hard ceiling, not a target.
- Price: New LP-100 is issued at the current Phi-Split order book price, not at a discount.
3. Distillation
The buyback mechanism that returns protocol revenue to LP-100 holders.
- Source: In the target design, 38.2% of all protocol revenue (the operational share of the phi-split) is allocated to buybacks.
- Execution: The protocol would place standing buy orders on the Phi-Split order book. These orders would always be present, always at or near the current price.
- Effect: Continuous buy pressure that compresses downside volatility. Cumulative buybacks would reduce circulating supply as revenue grows.
- No discretion: Distillation is meant to be automatic. No governance vote would decide whether to buy back. The 38.2% allocation is a constant.
4. Order Book
The continuous trading venue for LP-100 tokens.
- DAG fair ordering: Target design: orders are sequenced using Hedera's Directed Acyclic Graph consensus. No front-running. No MEV. Fair ordering is a property of the consensus layer, not a bolt-on.
- Transparent: Target design: all orders, fills, and cancellations would be receipted on the governed accounting surface (K0), with external anchoring where that lane is closed.
- Cross-DAV: Any LP-100 token from any DAV trades on the same Phi-Split infrastructure.
5. Event Tenders
Purpose-bound capital raises for specific initiatives.
- Mechanism: In the target design, a DAV publishes a tender (project description, budget, timeline, success criteria). SKY holders bid to fund the tender.
- Algorithmic TRO: Funds would be held in FLOW (1:1 direct primitive) Algorithmic TRO with milestone-based release.
- Accountability: Tender completion would be verified against the stated criteria. Failed tenders would trigger refund via the target exit and refund path.
Interaction Between Components
Opening Sale --> Order Book <-- Distillation (38.2% buyback)
^
|
Faucet (truth-gated, OCR>1, 3% cap)
|
Event Tenders (project-specific raises)
The Opening Sale seeds initial liquidity. The Order Book provides continuous price discovery. Distillation returns revenue to holders. The Faucet enables controlled growth. Event Tenders fund specific work.
Gate Dependencies
Phi-Split components are gated by the Three Gates:
| Component | Gate A (Receipt) | Gate B (Truth) | Gate C (Exit) |
|---|---|---|---|
| Opening Sale | All orders receipted | Transparency >= 90% at launch | Target design: Grace Exit would be available from day 1 (frozen claim until reconciliation complete) |
| Faucet | Dilution receipted | Transparency >= 90% required | Target design: NAV exit would remain open (frozen claim until reconciliation complete) |
| Distillation | Buybacks receipted | Target design: automatic (no discretion) | N/A |
| Order Book | All trades receipted | Full order visibility | Target design: positions would always be exitable (frozen claim until reconciliation complete) |
| Event Tenders | Algorithmic TRO receipted | Milestone verification | Target design: refund on failure |
No component of Phi-Split operates outside the Three Gates.
Dividend Prohibition (Constitutional Default)
By default: NO DIVIDENDS ARE PAID.
| Parameter | Default | Vote Required |
|---|---|---|
| Dividend % | 0% | Lane B (66.7% / 30 days) |
| Reinvestment % | 100% | Lane B (66.7% / 30 days) |
The Phi-Split council MAY vote to pay dividends, but the default is zero. This is intentional:
The DAV's purpose is φ=0 (zero-to-one breakthrough) and monopoly status. Dividends are misalignment — they extract value from the mission and distribute it to passive shareholders instead of reinvesting it in the breakthrough.
Equity in a DAV is NOT a dividend-paying instrument. It is:
- A right to participate in Phi-Split voting
- Collateral for lombard loans (tax-free borrowing)
- A claim on eventual monopoly status and φ=0 breakthrough value
Typed authorization by Person context
| Entity Type | Sign | Receive Revenue | Pay Dividends |
|---|---|---|---|
| Natural Person, private act | Natural principal (one private key) | Direct to wallet | N/A |
| Legal Person | Lawful external authority plus the executors required by jurisdiction; counsel conditional | To the entity’s lawful account or custody route | Per governing instruments and law |
| Public DAV | the signer(s) required by applicable law, the entity's governing instrument, or a valid competent mandate bind the exact consequence in a complete valid bound PRISM decision receipt; PRISM records and verifies only | Deterministic software routes revenue only under the applicable separately adopted accounting and distribution terms | Only under separately adopted distribution terms; no dividend default established by this page |
The constitutional routing rule:
IF entity.type == NATURAL_PERSON AND act.scope == PRIVATE → natural principal signs
IF entity.type == PUBLIC_DAV → require PRISM decision receipt with the signer(s) required by applicable law, the entity's governing instrument, or a valid competent mandate
ELSE → error: must specify entity type before signing or receiving
Historical predecessor wording — retained on 2026-09-27, not active rules
The displaced passages are preserved verbatim for lineage. This retention date is not their original authorship date.
Predecessor passage 1
singleton signer. PRISM is its collective decision protocol, not a rail or artificial signer. Phi-Split, described below, is a separate revenue mechanism.
Predecessor passage 2
Phi-Split is the integrated coordination system for LP-100 equity tokens. It governs how equity enters circulation, how it is priced, how buybacks return revenue to holders, and how the order book operates.
Predecessor passage 3
| Phi-Split (SPLITTING) | DAVs + Natural Persons | Revenue distribution across VMOSK. Each sovereign agent wallet receives its constitutionally-defined %. |
Historical predecessor wording — retained on 2026-09-28, not active rules
Editorial reconciliation of this public source only; no upstream contract is amended.
Predecessor passage 1
Deterministic software routes revenue to VMOSK wallets only as that exact bound consequence | Default: NO |