Author：LSPDAO.DaPangDun LSPDAO.zhihong LSPDAO.0xbi

1、Initial Nation3

We first became interested in Nation3 because of its official Twitter airdrop campaign:

Each user who left an ENS address and forwarded it received an airdrop of Nation tokens, which reached over 6,000U/each, roughly 2,000+ addresses, which is a big airdrop, which brought it initial traffic and to a certain extent set off a wave of ENS address registrations.

Out of curiosity about its grand narrative, we started to pay attention to the Nation3 project to see exactly what it was going to do? How is it going to do it?

2、Project Introduction

2.1 Project Goals

The goal of the Nation3 project is to create a nation on the cloud, specifically.

1. the creation of a community that aims to provide nation-state-like services that encompass monetary, educational, medical, etc.
2. The main element that the project focuses on is the population, which is different from the real-world approach that focuses on land ownership or regimes.
3. The project hopes to build a crypto nation or crypto city on the cloud that has a strong sense of belonging and fairness for the participants.

2.2 Founding Team

According to the profile, the main founding members of Nation3 include：

Luis Cuende: Nation3 core contributor, co-founded Aragon in 2016 and a core contributor to Aragon, co-founded the blockchain data authentication project Stampery in 2014 before founding Aragon, and later the Stampery team built the decentralized prophecy machine network Witnet.

Carlos Juarez: Core contributor to Nation3, senior software engineer at Gemini, and former co-founder of decentralized prediction platform Guesser, which was acquired by Gemini in August 2021.

Uxio Piñeiro: Nation3 core contributor, smart contract developer.

Anastasiya Belyaeva: Nation3 core contributor, co-founder and partner of Fabric Ventures from October 2017 to August 2020, and head of growth at PieDAO. Previously, The Block said in mid-April that Fabric Ventures was about to complete fundraising for its two funds, which now total $245 million.

2.3 Economic Model

The relevant economic models can be viewed through the official website, here we only do the overall summary and some data analysis:.

2.3.1 Nation

Nation3's tokens are $Nation

• Initial supply: $42069 $Nation
• Contract address: https://etherscan.io/token/0x333a4823466879eef910a04d473505da62142069
• Initial distribution
  • 80%: community (via DAO treasury and tweetairdrop)
  • 20%: Founding members and contributors

Pools currently open with Nation-ETH.

Through the analysis of the DUNE , we get the following diagrams：

It can be seen that.

1. Most of the Nation tokens are concentrated in the Foundation and veNATION contracts, which should not be in circulation.
2. The circulating Nation is about 4600, and through the observation of specific addresses, most of the airdropped Nation has basically been cleared out, i.e. those who temporarily hold Nation possess a stronger will to hold it for a long time.
3. The current number of holders is small, and after the first wave of heat, there is no continuous heat increase, and enters a stable holding phase with the clearing of airdrop users.

2.3.2 veNATION

A veNATION (non-transferable) can be obtained by locking up a Nation, which is a way to reduce the amount of Nation in circulation on the market.

An interesting point is that the amount of $veNATION obtained for each pledged $Nation corresponds to the duration of the lockup and decreases over time.

The $veNATION balance is calculated according to the following model.

• 1 $Nation locked for 4 years = $1.00 $veNATION
• 1 $Nation locked for 3 years = 0.75 $veNATION
• 1 $Nation locked for 2 years = 0.50 $veNATION
• 1 $Nation locked for 1 year = 0.25 $veNATION

This way of operating is designed to break the participation barrier for people with a small amount of available capital: locking a position with 1 Nation for 4 years gets the same amount of veNATION as locking a position with 4 Nation for 1 year.

In order to encourage people to come to the lock-in, so the veNATION is empowered, including but not limited to：

• Governance rights.
• The right to apply for a Genesis NFT passport (requires holding at least 2 $veNATION to apply) and because veNATION decreases over time, requires you to lock in more Nation.
• Access to higher liquidity incentives, e.g. for Nation/ETH Balancer pools, veNATION holders will receive 2.5x incentive gains.

Moving on to the analysis of the DUNE.

veNATION is basically the coins of the founders or co-founders, accounting for more than 94%. This point shows that：

1. founders take this active lock-in mode equivalent to the passive lock-in mechanism of other projects.
2. In the current market, most people's faith is insufficient, so they are not willing to take the risk brought by locking positions, and prefer to retain liquidity in the market.

2.3.3 NFT Passport

NFT Passport holders are Nation3 citizens. They are the core users of Nation3 services and the ones who drive the progress of Nation3.

Nation3 citizens are the ones who make recommendations, conduct research, implement initiatives, organize themselves into working groups, and accomplish all the other things needed to successfully launch a cloud nation. They devote their time and expertise to the project while leveraging Nation3 DAO funding.

The NFT passport is non-transferable and will be burned when the veNATION balance runs low.

The current VOTE results in 420 founding passports, and it is up to the DAO to decide if, how many and when to issue more passports in the future.

Passport entitlements include：

• Access to all services offered or to be offered in the future by Nation3, including Reality Space.
• Access to certain parts of the public forum that require permission control, such as Discord.
• Making suggestions and decisions within the Nation3 DAO (provided that these are approved by the veNATION holder).

All citizens are veNATION holders, but not all veNATION holders are citizens. This creates economic consistency while maintaining the checks and balances created by the participation of both groups in governance - essentially a bicameral system.

2.4 Project Current Status

One of the very controversial points of Nation3 is that：

It does not have a specific Roadmap, only a general direction.

This approach has both advantages and disadvantages.

Advantage: For the market participant, he doesn't know what he should do, and it also reduces the participant's evaluation of the future realizability of the project.

Disadvantage: A high degree of openness and the opportunity for greater depth of involvement and achievement for participants with ideas.

Because there is no specific route, the construction of Nation3 is entirely up to the members of the community (of course, the general direction will be guided by the core contributors), which may also be one of its claimed characteristics: cloud nations are built by cloud nationals, and this nation-building process should be decided by the nationals.

We have kept track of the project development process, and some of the recent initiatives are mainly：

2.4.1 Airdrop, liquidity incentive and lock-in

The main functions that have been implemented are

• Twitter airdrop distribution of Nation tokens
• Open pool of Nation-ETH with liquidity incentives
• Nation lock-in to get veNATION

2.4.2 Formation of Guild

In order to better develop the Nation3 project, the project has adopted a guild model, where each guild is responsible for planning, rewarding and validating the development of the corresponding direction. This ensures synergy in all directions of the project, while retaining the greatest degree of freedom for each.

The current number of unions has grown from 6 to 8, as follows：

Developers guild

Focuses on Nation3 interfaces and products such as Passports, veNATION locks, etc.

Research guild

Focused on discovering and sourcing projects, tools, and services that fit into the Cloud Nation ecosystem.

Events guild

Build a list of web3 big events.

brand-design guild: Brand Design Guild

Focuses on communicating the Nation3 brand through merchandise, documentaries, films, stories, and more.

Growth guild

Focuses on initiatives to expand the citizen base and attract talent to Nation3. This includes partnerships with other communities, events, AMAs, growth campaigns, etc.

Meta guild

Members can discuss the creation and coordination of new guilds, coordinate joint activities between multiple guilds, discuss any inefficiencies in the guild structure, and suggest changes.

Reward guild

Coordinates the weekly $Nation rewards spending.

Each guild has its own.

• Coordinator
• Quarterly roadmap
• Quarterly budget with the flexibility to review and adjust monthly
• Monthly progress reports

2.4.3 dework

The community's work coordination takes the form of a devework, with the main processes being.

Suggest - Review and approve - Create Task - Accept Task - Submit Task - Review Task - Task Complete - Reward issued

For each task, a sub-section is opened, and the relevant members of the task are discussed in the sub-section individually.

The benefits of this model are:

1. deep involvement of community members in the construction of the project (to be precise, the future construction of the project depends entirely on the work of the community members, with the founders providing only a broad framework, guidance).
2. treating members' contributions fairly and equitably, and resolving any ambiguity about the degree of contribution.
3. The design of sub-regions isolates tasks to prevent disorder in the task system, which of course brings the problem of too many sub-regions (but this problem will be largely solved by the time limit mechanism of sub-regions)

2.4.4 Second quarter roadmap

For details refer to:

3 Competitor Comparison

We focused our investigation on CityDAO (Nation3 and CityDAO just recently had an AMA) and compared the two to some extent as follows. 

Overall: Nation3 has taken a different path, more inclined to the construction of a digital nation, with a less strong desire for entities.

At the same time, because of the relatively short time of its creation, the corresponding mechanism, maturity, funding surface and number of members are all lagging behind CityDAO, and it is important to observe its later sustainable development.

4、Evaluation

--by DaPangDun

There are a few things that really appeal to me about Nation3:

1. The completely open layout,hitting the ground running with a very radical or arguably crazy vision coupled with an airdrop model.
2. the project was built entirely from the contributions of community members, which was a very interesting practical attempt.
3. union+proposal+dework+community members, gradually formed the basis of the future development model, this model I think will be the most valuable place in the future (because it involves the project specific construction level, maybe this project will fail in the future, but this model will be reborn in another project in the process of gradual optimization)

Of course, there are obvious risk points in the project itself:

1. How to ensure or judge that the project/independent union is on the right path of development
2. How to motivate the contributors in the long term because there is no obvious economic effect, service, and if it is entirely through the sale of Nation, whether it will have a greater impact on the price of Nation in the market and thus have a greater negative impact.
3. The development of the project relies heavily on the development of the existing web3 infrastructure and related innovations, which will have limitations on the project itself.

I prefer to treat this project as a "social experiment" rather than a speculative target. The project will either die worthless, or if it grows I think it will give birth to a group of very high quality community members (and by high quality I mean their wealth).

--by zhihong

The concept and innovation of the project itself is very interesting and narrative space, but this kind of project handed over to the community development is very much in need of community execution and efficiency, but most of them tend to lose execution due to lack of incentive and systematic organization, but Nation3 has an independent community business model, which is still praiseworthy.

In addition Nation3 has actually gone through a period of golden CX, from the perspective of the data on the chain locking veNATION addresses are also mostly teams, representing not many members who became actually involved in the construction of Nation3 during the heat of the moment, but more speculators who are fanatical. And the nature of Nation3 most need is the cohesion and execution of the community, so I think Nation3 unless it can be built or organized to cause a wave of innovation, or the final probability will become a Web3 Nation martyr, because the current talk about Web3 Nation is indeed a bit early.

But my own philosophy makes me have expectations for Web3 countries, so emotionally I actually hope Nation3 can succeed in becoming a milestone event for Web3, but logically and rationally I think Nation3 still needs a long way to go.

--by 0xbi

As far as the project is concerned, I think the most practical problem is how to survive the bear market. No one can generate electricity with love for a long time, and the development of the project (whether it is R&D or marketing) needs money to support.

5、How to build a Nation

Here we have an interesting discussion: how to build a nation? What aspects do we need to focus on to build a framework for the huge concept of a nation?

5.1 Definition of Nation

By looking at the definition of Nation on Wikipedia.

1. In a broad sense, a nation is a social group that shares a common language, culture, race, religion, territory, regime or history.
2. A national entity in international law should have to hold the following conditions.

• "People": that is, a fixed population of the country
• "Territory": the geographical location held and administered by the state, including "floating territories" (extended territories)
• "Government": a system of institutions acting on behalf of the state
• "Sovereignty": the right to rule internally and the ability to establish relations with other countries externally.

-----

Thinking according to the combination of this concept and the characteristics of the state on the cloud, we can analyze that：

1. People are the most important subject of the state, so the construction of the state should be thought in terms of human needs itself.
2. Territory is not necessary for the cloud state, it can be replaced by the virtual world of "land" or the spiritual world of "territory".
3. Government is the institution that ensures the functioning of society, and in the concept of Crypto it should be equivalent to the governance mechanism and the social system that ensures the functioning.
4. Sovereignty is a real-world concept, and states do not exist in the cloud.

So we should focus on: [human needs] [governance model] [social system]

5.2 Governance model

Let's start with the governance model. Crypto currently has a relatively complete governance system, the core of which is [voting], for example, most DAO projects use Snapshot to make resolutions on major proposals. Here are a few issues that we think need attention:

How to ensure the fairness of voting rights as much as possible, i.e., according to what to decide the amount of voting rights.

• Is the voting interest a citizenship system or a percentage of ownership of a particular subject matter or is it a neutralization of the two?
• How to prevent monopoly?
• How to identify fake identities? (i.e., verification of the uniqueness of the user's identity)

How to speed up the efficiency while ensuring the operation of the mechanism, i.e., reduce the cost loss due to governance.

• Fast proposals through the creation of fast voting committees or proxy voting.
• To establish branch governance through identity thus reducing the number of people who need to participate in governance to improve efficiency.

How to ensure accurate interpretation of proposals, i.e., to show citizens what the proposals are about in a comprehensive and transparent manner.

• Establishing a proposal review committee (or even multiple levels)
• A mechanism for submitting detailed, unbiased explanations of proposals

5.3  Social system

In the secular world, the social system contains mainly political, economic, cultural, and military aspects, which we will discuss one by one.

5.3.1 Political

In the real world there is already a huge tear in societies due to political correctness, and this tear has a lot of bad effects on the people and their minds.

In the Cloud Nation, the concept of politics is theoretically non-existent and should be avoided as much as possible.

5.3.2 Economy

That is, the market system, the most important of which is the monetary system.

• Establishing a unified currency (crypto's strong point).
• Establishing exchange markets for different denominations (for example, between currencies and services) and trying to find a balance between market-based exchange rates and exchange stability.
• A virtuous economic model should be formed so that participants can enjoy certain benefits

5.3.3 Culture

Cultural identity is easily underestimated in nation building, and in fact it can be a tremendous force, the most important of which is propaganda and education.

• Establish a cultural institute to strengthen the theoretical foundation of the nation-building concept
• Establishing a digital library to enrich citizens' knowledge, exploration, and reflection on national culture
• Establishing an education system to enhance citizen participation in nation building
• This can be combined with “to earn” to increase the motivation for participation

5.3.4 Military

Countries on the cloud do not need violent institutions in theory, but because it is a code-based world, it is very necessary to establish defense institutions.

• Establishing a code review body to review the ever-increasing amount of modular code to make it secure.
• Develop a security manual to prevent the loss of assets caused by attacks or theft of community service tools or "phishing attacks" on citizens.
• Prepare contingency plans on how to deal with insecurity in the event of an incident, and establish a hierarchical system for dealing with it.
• Establish an arbitration body to deal with possible disputes over rules, ethics, etc., and to regulate the scope of authority exercised by different authorities.
• Establish a compliance organization to address the various compliance issues involved in the process with the real world

5.4 Human needs

The reason for putting [human needs] at the end is that the above [governance model] [social system] partially contains the content of human needs (corresponding to "human needs for political participation," "human needs for object interaction," etc.) "human need for education", etc.)

Here are a few points that we think are significant：

5.4.1 The need for communication

People are herd animals and have a natural need for communication. So there is a need to：

• Establishing communication methods and communication software that meet the characteristics of countries on the cloud.
• "Identity One Card": the unique identity of the user can be seamlessly docked to any occasion (module) and object and content that he or she wants to communicate.
• A balance of privacy and disclosure in the communication process, which relies on the development of hierarchical authorization of data, privacy technologies.

5.4.2The need for health

The human quest for health is constant, so is it possible to.

• Establish a cloud-based health insurance
• Establish online consultation service and medical advice service

5.4.3 Interface requirements with the real world

After all, human flesh needs to live in the real world, so it is inevitable to set up interfaces with the real world, which is what cloud nations are trying to do to move from the cloud to the land. These interfaces can be：

• Monetary, such as the free exchange of Nation with sovereign currencies
• Physical, such as the equivalent recognition of virtual and real health insurance, degrees, contracts, etc.
• Physical, such as the purchase of a sovereign land/island (this is possible in some parts of the world)

6、References