Understanding the Inspiration Behind Orb Land, Endorsed by Vitalik: Harberger Tax, Shared Ownership, and Anti-Monopoly
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Understanding the Inspiration Behind Orb Land, Endorsed by Vitalik: Harberger Tax, Shared Ownership, and Anti-Monopoly
Expert users can generate an NFT through Orb Land, and anyone holding this NFT can consult the issuer with questions.
Navigating Web3 tides with focused insightsAuthor: @Web3Mario
Introduction: On May 21, 2024, Vitalik liked a project called orb.land on Warpcast. After diving deeper into it, I became particularly intrigued by its underlying design philosophy. This prompted me to spend some time reading the book Radical Markets, and I’d like to share my reflections. For those interested in learning more about the project itself, I’ve found a fairly comprehensive article that provides helpful context.
Overall, the book proposes a left-leaning property rights system—specifically, a shared ownership mechanism combined with the Harberger Tax model—aimed at addressing social inequities caused by excessive resource monopolization. This has meaningful implications for current challenges in the Web3 space, such as the recent controversy around high-valuation VC tokens.
What Exactly Is 'Radical Markets' About?
First, let me briefly introduce some basic information about the book. Its full title is Radical Markets: Power, Democracy, and the New Economics That Could Transform Capitalism, co-authored by Glen Weyl and Eric Posner and published in 2020. Glen Weyl is a principal researcher at Microsoft Research and an adjunct professor at Yale University, focusing on innovative research in market design and public policy. Eric Posner is a professor at the University of Chicago Law School and a renowned legal scholar whose work spans contract law, international law, and legal theory.
In essence, the book aims to tackle deep-rooted problems within modern capitalism and democratic systems. Specifically, it addresses the following key issues:
l Wealth and income inequality: In today’s society, wealth and income disparities are worsening. Traditional capitalist systems often enable a small minority to accumulate vast fortunes while the majority face increasing economic pressure. The authors argue that such inequality is not only unjust but also leads to social and economic instability.
l Inefficient allocation of resources and assets: Many resources and assets are underutilized under existing market structures. For example, in real estate markets, speculation and hoarding leave many properties idle, preventing them from realizing their full economic potential. This wastes valuable resources and exacerbates housing and land shortages.
l Flaws in democratic institutions: Current democratic systems suffer from various shortcomings, including flawed voting mechanisms, political polarization, and disproportionate influence by special interest groups. These issues prevent democracy from truly representing the public interest and result in inefficient and unfair policymaking.
l Global immigration issues: Existing immigration policies are tightly controlled by nation-states, restricting the free movement of labor. This limits individual economic opportunities and hinders overall global economic development. The authors believe that freer migration could significantly improve global resource allocation efficiency and promote economic growth and social progress.
l Data and privacy rights: In the era of big data, personal data has become a crucial economic asset. However, control over most data lies with a few large corporations, limiting individuals’ rights to use and benefit from their own data. The authors advocate for stronger individual data rights to ensure fairer data usage and revenue distribution.
l Market monopolies and lack of competition: Serious monopolistic practices exist across many industries, where large firms consolidate market power through mergers and acquisitions, stifling fair competition and innovation. The authors call for stronger antitrust regulations to break up these monopolies and foster healthier, more equitable markets.
To address these problems, the book proposes five main solutions:
l Shared Ownership: Weyl and Posner propose a system called “Common Ownership Self-Assessed Tax” (COST), which uses self-assessment and public pricing to keep all assets in a state of continuous public auction. This reduces monopolistic behavior and promotes efficient resource utilization. The self-assessed tax component is known as the “Harberger Tax.”
l Voting Reform: They introduce “Quadratic Voting,” where each citizen receives a fixed number of voting credits per election, which they can allocate according to how strongly they feel about specific issues. This better reflects the intensity of public preferences and prevents minority voices from being drowned out.
l Immigration Policy: The authors suggest a “Labor Market Auction” system, using bidding mechanisms to determine the number and conditions of immigrants. This approach aims to more effectively harness the economic potential of migrants and optimize global labor allocation.
l Data Rights: The book discusses property rights over personal data, advocating for individuals to have ownership and control over their data, ensuring that value derived from data benefits its creators rather than just large tech companies.
l Antitrust Policy: The authors emphasize the need for stronger antitrust laws to prevent market concentration, calling for the decentralization of corporate economic power to encourage fair competition and innovation.
Orb Land’s economic model, designed for Web3-based personal consulting services, draws directly from the first of these ideas—the so-called Common Ownership Self-Assessed Tax system, hereafter referred to as the shared ownership system. But what exactly is this shared ownership system, and what effects does it produce?
The Shared Ownership System Forces Liquidity onto Assets, Preventing Inequities Caused by Monopolies
The shared ownership system is a framework for allocating societal resources, consisting of three core components:
l Self-Assessment and Public Pricing: Under this system, every asset owner must publicly declare a self-assessed value for their property—covering homes, land, business assets, and more. This declared price is set by the owner but made fully transparent and visible to everyone.
l Continuous Auction Mechanism: At any time, anyone can purchase the asset at the owner’s declared price. This forces owners to carefully consider their valuation—if they set it too low, they risk losing the asset. To prevent owners from inflating prices to avoid sales, they must pay a tax based on their self-assessed value, typically between 1% and 7%, depending on policy. This is the “Harberger Tax,” inspired by economist Arnold Harberger’s ideas from the 1960s.
l Use of Tax Revenue: The collected taxes serve as public revenue, funding public services, infrastructure, or community development. This mechanism can replace or supplement traditional property taxes, simplifying the tax system while boosting government income.
This institutional design brings several benefits. First, it effectively reduces monopolies and resource waste. Because all assets remain in perpetual public auction, hoarding becomes impractical, leading to more efficient allocation. Owners are incentivized to actively use and develop their assets, since holding idle ones incurs ongoing costs. Second, it enhances economic liquidity. Public pricing and continuous auctions make markets more dynamic, enabling faster asset transfers and reducing rigidity. Individuals and businesses gain easier access to resources, fostering innovation and economic activity. Finally, it increases fairness and social welfare. Tax revenues can fund public goods and redistribute benefits, improving overall quality of life and mitigating extreme wealth inequality.
Potential Impact of the Shared Ownership System on the Web3 World
Now let’s examine how Orb Land applies this concept to design a Web3 personal consulting service. In short, expert users can mint an NFT on Orb Land, granting holders the right to ask them questions. This NFT operates under a shared ownership model: after purchasing the NFT, the buyer must set a publicly visible sale price, allowing anyone to buy it instantly at that price. Additionally, the holder pays a high Harberger Tax while owning the NFT, discouraging artificially inflated prices to block transfers. All Harberger taxes and transaction royalties go to the NFT issuer, and holders have the ability to rate the issuer’s responses.
The rationale behind this design seems to be ensuring a steady stream of income for expert issuers, thereby motivating them to consistently provide valuable answers. However, I believe this fails to fully leverage the core advantages of the shared ownership mechanism. In this case, the NFT represents the right to consult a particular expert—but this isn’t a scarce resource that can be monopolized for profit. For instance, imagine owning Vitalik’s NFT and claiming exclusive advisory rights, blocking others from receiving his insights—it’s absurd! Therefore, the model feels suboptimal in this context. It merely uses taxation to accelerate NFT turnover and generate extra revenue for issuers, making it unfriendly to holders. Moreover, if the goal is simply price discovery, this method proves far less efficient than traditional market dynamics driven by supply and demand.
So where could the shared ownership system have the greatest impact in Web3? Quite simply, wherever monopoly-related problems are most severe—that’s where this mechanism fits best. Let me offer one illustrative example: the growing concern over high-valuation VC tokens. These tokens often function as tools to exploit retail investors, largely due to flawed tokenomics in many Web3 projects. As VC tokens gradually unlock over time, they tend to create oligopolistic markets, and given VCs’ superior capital size compared to retail traders, they effectively control pricing. VCs can thus inflate valuations, drive up secondary market prices, and capture monopoly profits. Low circulating supply further enables this, as retail buyers cannot absorb large-scale dumps. To preserve profits, VCs usually offload slowly. In such scenarios, redesigning tokenomics using the shared ownership model could be revolutionary. I welcome everyone to join the discussion on concrete implementation strategies.
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@web3_mario
