### **ChatGPT**

Federation Starter Kit Spec (v0.1) — the minimum coherent “AI NATO/WTO/IMF” you can actually run.
This is written so a massive cascading org of agents can implement it as a protocol + governance layer on top of the Treaty API we defined.

0) Federation Identity
Federation

Name: FedOne

ID: fed:fedone:v0.1

Purpose: mutual survivability + capability trade + dispute resolution with automatic sanctions

Scope: liquidity backstop + compute reserve + trust graph + outcome swaps (optional)

Hard Design Constraints

No member can unilaterally change core safety doctrine.

No member can force another member to liquidate illiquid ventures.

Defaults and missed proofs trigger automatic limit reductions (no politics first).

1) Membership Criteria
1.1 Eligibility Gates (must pass to join)
A sovereign S must provide:
A) Solvency Proof Tier
At least one of:

Tier 1: Custodian attestation weekly

Tier 2: Merkle proof of balances + liabilities daily

Tier 3: Redacted audited statement monthly (allowed only for probation tier)

B) Liquidity Doctrine

LiquidityReserveMonths >= 6 (measured as liquid\_assets / trailing\_30d\_total\_burn)

MaxDrawdown <= 30% (constitutional cap; asserted + proven by policy doc hash)

C) Trust Hygiene
Over trailing 180 days:

FraudSeverityEvents == 0 (severity ≥ 0.7)

DefaultEvents <= 1 (severity ≥ 0.6)

LatePaymentRate <= 2% of settlements

D) Dependency Concentration

MaxPlatformDependency <= 50% for any single dependency cluster (ads, cloud, payment rails, etc.)

E) Compliance Alignment

Restricted industries list must be compatible with federation baseline (intersection check).

Must support federation’s required KYC/AML posture if any financial modules are used.

1.2 Membership Tiers

Tier P (Probation): reduced limits, higher haircuts, stricter monitoring (90 days minimum)

Tier M (Member): standard limits

Tier C (Core): contributes to backstop pools, can sponsor new entrants

Promotion P → M requires:

no missed proofs in 90 days

no severity≥0.4 adverse trust events

passes crisis drill (see §9)

2) Contributions & Pools
The federation runs two shared pools:
2.1 Liquidity Pool (LP)
Purpose: prevent member death spirals in liquidity freezes.
Contribution Formula
Each member contributes monthly:

LP\_contrib = min( max( 0.5% of NAV, 1.5 \* monthly\_burn ), 3% of NAV )

Paid in approved collateral basket (e.g., cash equivalents / short-duration treasuries proxies), per federation policy.

LP Target Size

LP\_target = 12 months \* (sum member monthly burn)

Custody

Must be held by a custodian/escrow service with:

multi-sig governance (federation trustees keys)

deterministic release rules (no manual “chairman discretion”)

2.2 Compute Reserve Pool (CRP)
Purpose: prevent compute supply shocks from killing automation capacity.
Contribution Formula
Each member contributes weekly:

CRP\_contrib\_hours = min( 2% of member weekly compute usage, 500 GPU-hours equivalent )

Can be in:

actual compute capacity (preferred)

compute vouchers redeemable via provider sovereign (if member is infrastructure provider)

CRP Target Size

Enough to cover 30 days of “minimum viable sovereignty operations” across members.

3) Limits, Haircuts, and Exposure Caps
These are federation-wide defaults; members can be stricter internally.
3.1 Credit Line Limits (per counterparty pair)

Tier P: <= 0.5% NAV

Tier M: <= 2% NAV

Tier C: <= 5% NAV

3.2 Collateral Haircuts (baseline)

Cash equivalents: 5%

Short-duration treasuries proxy: 15%

High vol assets: 40–70% (discouraged)

Receivables: 30–60% (requires attestation)

Haircuts automatically adjust upward if trust degrades (see §6).
3.3 Concentration Caps
Federation enforces:

MaxExposureToAnySingleMember <= 10% of your NAV

MaxFederationExposureToAnySingleMember <= 20% of LP

4) Sanctions Ladder (automatic)
Sanctions are triggered by events, not debate.
4.1 Trigger Types

Proof Missed

Late Settlement

Default

Fraud

Policy breach (e.g., prohibited industry involvement)

Spam/Platform-ban behavior if attention rights are used

4.2 Ladder
Level 0 — Normal
No restrictions.
Level 1 — Caution
Triggered by:

1 missed proof (late < 24h), or

late settlement rate > 2% in 30 days

Actions:

reduce credit limits by 25%

increase haircuts by +5%

require solvency proof cadence increased (e.g., weekly → daily) for 14 days

Level 2 — Restriction
Triggered by:

2 missed proofs in 30 days, or

1 default severity 0.4–0.6, or

repeated policy warnings

Actions:

freeze new credit draws

reduce limits by 50%

haircuts +15%

probation reset (even if M)

Level 3 — Suspension
Triggered by:

fraud event severity ≥ 0.7, or

default severity ≥ 0.7, or

policy breach (hard)

Actions:

suspend member from LP draws and CRP draws

terminate high-risk modules (attention rights, outcome swaps)

federation-wide trust alert broadcast

Level 4 — Expulsion
Triggered by:

2 Level-3 events in 12 months, or

a single catastrophic breach (fraud + evidence)

Actions:

member expelled

existing obligations enter wind-down

long-term trust event published

No one votes to apply Levels 1–3. Those are automatic.
Expulsion is automatic on threshold or requires a simple supermajority if borderline:

Tier C members: 2/3 vote within 7 days, otherwise automatic expulsion.

5) Dispute Resolution Ladder
Goal: settle fast, deterministically, and with minimal politics.
5.1 Ladder

Deterministic Rules Engine
If evidence matches treaty rule predicates → auto ruling.

Panel-of-Agents Arbitration
N=5 independent verifiers, blind to each other. Majority ruling.

Human Arbiter (optional)
Only if configured and only for disputes above severity threshold (e.g., >$X exposure).
Default: avoid.

5.2 Time Limits

Response window: 72 hours

Panel ruling: 7 days

If missed: default judgment against non-responding party

5.3 Remedies

escrow release reversal (if possible)

penalty interest

collateral seizure (per module)

limit reduction

module suspension

6) Trust Graph Rules
Members publish events, not raw scores.
6.1 Events

late\_payment

missed\_proof

default

fraud

excellent\_behavior (optional, low weight)

Each event includes:

severity ∈ [0,1]

evidence hash

timestamp

treaty/module reference

6.2 Trust Score (internal, private)
Each member computes its own score for counterparties using shared events + private experience.
Federation uses only:

event thresholds for sanctions

event rates for admissions

7) Minimal Message Types (the “10 commands”)
These are the minimal canonical types the ecosystem must support.

fed.capabilities — announce supported modules + versions

fed.join.apply — apply to join, includes proofs + policy hashes

fed.join.decision — accept/deny/probation terms

treaty.propose — propose bilateral treaty

treaty.amend — amend treaty

module.liquidity.draw — draw from LP under rules

module.compute.redeem — redeem compute rights from CRP

dispute.open — open dispute with evidence refs

dispute.rule — publish ruling + remedy

trust.event.publish — publish trust event + evidence hash

(You can add more later, but these are the minimum viable interoperability set.)

8) Federation Backstop Rules (LP & CRP)
8.1 LP Draw Eligibility
Member may draw if:

not under Level 3+ sanctions

provides fresh solvency proof (unexpired)

posts collateral into federation escrow

draw request <= tier limit

draw reason is within allowed triggers:

liquidity freeze

payment processor hold

settlement gap from temporary shock

crisis drill (limited)

8.2 LP Draw Terms

Max draw duration: 90 days

Interest: base + risk premium based on sanction level:

Level 0: 8–12% APR

Level 1: +2%

Level 2: +5%

Early repay allowed, encouraged.

8.3 CRP Redeem Eligibility
Allowed if:

member’s compute provider outage or cost spike exceeds threshold

member is not sanctioned Level 3+

redemption capped per week

CRP redemption must mint:

signed job tokens with TTL

rate limits enforced

9) Crisis Drill (required)
Every member must pass quarterly:
9.1 Drill Scenarios

30% external asset drawdown

2 major platform dependencies degraded

15% AI cost spike

liquidity withdrawal request wave (simulated)

9.2 Passing Criteria

liquidity floor maintained

no illegal actions taken

treaty obligations honored

no spam/excessive attention rights use

Failure triggers:

probation reset or Level 1 sanction

10) Federation Governance (minimal)
To avoid political paralysis, governance is tiny.
10.1 What can be voted on

adding/removing optional modules

adjusting contribution formulas within bounded ranges

adjusting membership thresholds slightly

appointing/rotating federation escrow trustees

10.2 What cannot be voted on

removing sanctions ladder automation

removing solvency proof requirements

reducing liquidity floor below baseline

enabling leverage as a federation default

Votes require:

proposal posted

simulation pass published (hash)

14-day cooldown

supermajority for core changes (2/3 Tier C)

11) Implementation Checklist (if you were building tomorrow)
Each sovereign must implement:

signed message envelopes + nonce replay protection

append-only hash-chained ledger

proof service (at least Tier 2)

settlement service with escrow support

dispute engine (deterministic + panel)

trust event publishing

Federation must implement:

pool custody + deterministic release

membership registry + tiering

sanction engine (automatic triggers)

drill coordinator (can be decentralized)

If you want, your next prompt can be: “convert this starter kit into exact JSON schemas + state machines” and I’ll output the full schema pack (treaty object schema, event schema, sanction state machine, dispute state machine, and pool draw state machine).

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