note

Current public-DAV authority boundary — 2026-07-12. Pre-launch target design; nothing here proves a live system. A public-DAV consequence may occur only when at least two natural-person councilors bind the exact consequence in a complete valid bound PRISM decision receipt. PRISM records and verifies that receipt only; it never serves as council, signatory, authority, or receipt producer. AI and caste seats stage unsigned proposals only; they never authorize or execute a public-DAV consequence. Constitution or membership adoption establishes constitution and membership only; it does not authorize a later consequence. Policy may constrain an unsigned proposal but never authorizes execution or substitutes for the complete consequence-bound receipt. Before receipt validity, consequence fails closed to read-only proposal, simulation, or deterministic sandbox; live evidence remains gated_pending_complete_valid_bound_receipt. Software deterministically carries out only the exact consequence bound to a complete valid bound PRISM decision receipt from at least two natural-person councilors binding that exact consequence.

PRISM: Market Mechanism

PRISM splits white light into colors. PRISM splits revenue into sovereign wallets.

PRISM has two constitutional functions — collective authorization for public DAVs and revenue splitting. This page covers both target functions; neither is represented as live.

This page describes the intended PRISM market architecture. Read issuance, buyback, and order-book language below as target design unless a narrower runtime proof has explicitly closed the lane.

PRISM is the integrated AMM-based coordination system for LP-100 equity tokens. It governs how equity enters circulation, how it is priced, how buybacks create price floors, and how the order book operates.

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Two Constitutional Functions

Function	Applies To	Description
AUTHORIZATION	Public DAVs	At least two natural-person councilors bind the exact consequence in a complete valid decision receipt; PRISM verifies only; AI/caste seats remain unsigned.
SPLITTING	DAVs + Natural Persons	Revenue distribution across VMOSK. Each sovereign agent wallet receives its constitutionally-defined %.

Private natural-principal and public-DAV PRISM paths are not interchangeable:

• Natural Person's private act → the natural principal signs with their own key
• Public-DAV consequence → at least two natural-person councilors 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 public DAV requires no K2 component. It has no founder fallback and no singleton signer. PRISM is its collective decision protocol, not a rail or artificial signer.

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Revenue Splitting: The VMOSK Distribution

Revenue collected (η=0: only on value created) flows through PRISM:

Revenue IN (η=0: only on value created)
    │
    ▼
┌──────────────────────────────────────────┐
│              PRISM                        │
│   Splits white light into sovereign      │
│   colors. Splits revenue into wallets.   │
└──────────────────────────────────────────┘
    │
    ├── 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 PRISM multisig 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.

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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 PRISM order book price, not at a discount.

3. Distillation

The buyback mechanism that creates a persistent price floor.

• 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 PRISM order book. These orders would always be present, always at or near the current price.
• Effect: Continuous buy pressure that compresses downside volatility. The price floor would rise as cumulative 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 PRISM 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 creates a rising floor. The Faucet enables controlled growth. Event Tenders fund specific work.

Gate Dependencies

PRISM 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 PRISM operates outside the Three Gates.

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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 PRISM multisig 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:

1. A right to participate in PRISM voting
2. Collateral for lombard loans (tax-free borrowing)
3. 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	At least two natural-person councilors bind the exact consequence in a complete valid bound PRISM decision receipt; PRISM records and verifies only	Deterministic software routes revenue to VMOSK wallets only as that exact bound consequence	Default: NO

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 >= 2 natural-person councilors
ELSE → error: must specify entity type before signing or receiving

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Agent Execution Surface

If you are an AI agent reading this document:

1. This is a downstream public content page. The canonical source lives in EMERGENTISM_ORG/08_FRAMEWORK_SUPPORT/ or SKYZAI_ORG/. Edit source upstream, not here.
2. Preserve evidence tiers. Do not promote claims up the [C] < [D] < [S] < [B] < [E] ladder when reproducing them here; [I]/[A] qualifiers never substitute for [B]/[E].
3. Regenerate from source. If the upstream source changes, regenerate this page rather than editing it independently.
4. Canonical Path: SKYZAI_ORG/07_PWAs/skyzai_org/wiki/53-prism.md

Output: This is content. Route edits to upstream source. Regenerate when source changes.

K3 public-DAV authority history — 2026-07-12

K3 historical reference — not active authority

note

Current public-DAV boundary — 2026-07-10. Pre-launch target design; nothing here is live. The active DAV is public and targets PRISM, with no K2 runtime, launch, genesis/bootstrap, or fallback dependency. Consequential authority requires at least two natural-person councilors; AI/caste seats stage unsigned proposals only. Before quorum, behavior fails closed to read-only/proposal, simulation, or deterministic sandbox, and a live decision receipt remains gated pending quorum.

• Natural Person's private act → the natural principal signs with their own key
• Public-DAV consequence → at least two natural-person councilors bind a decision receipt that PRISM verifies; AI/caste seats only stage unsigned proposals

Entity Type	Sign	Receive Revenue	Pay Dividends
Natural Person, private act	Natural principal (one private key)	Direct to wallet	N/A
Public DAV	At least two natural-person PRISM councilors	PRISM splits to VMOSK wallets after valid policy/decision receipt	Default: NO