Forex Ratchet Valuation: Why Joules Appreciate

External signals. Internal stability. Ratchet forward, never backward.

The Problem: The Timber Case Study

In 1993, I took a business class in college. The professor told us about a timber company that had been trading internally at $7/share for years.

One day, an external buyer offered $15/share. The shareholders thought: “200% gain! Amazing!” They sold.

After the buyer dismantled the company and sold off the assets, the real value was revealed: $4,800 per share.

The internal-only trading had completely missed the external demand signals. The shareholders left $4,785 per share on the table because they had no way to see what the outside world valued.

Lesson: Internal-only trading creates information vacuums. You need external signals.

The Solution: Forex Ratchet

Liana Banyan solves this with what I call the “Forex Ratchet” — a mechanism that:

1. Captures external signals at the moment of purchase
2. Locks that rate to the transaction
3. Never looks backward — only ratchets forward
4. Maintains internal stability while reflecting external reality

How It Works

FOREX MARKETS (external)
     │
     │ Daily rates per country
     │ (Already aggregates all trades, wars, inflation, booms)
     ▼
DIFFERENTIAL MECHANISM
     │
     │ Capture rate at PURCHASE TIME only
     │ Store with transaction
     │ Never look backward
     ▼
INTERNAL CREDIT ECONOMY
     │
     │ 1 Credit = 1 Credit (always)
     │ Completed work persists
     │ Ratchet prevents regression
     ▼
JOULE APPRECIATION
     │
     │ Locked rate + platform growth
     │ Convert at locked rate when spent
     │ "Forever stamp" value

Why Forex?

“We don’t pick milk or wheat — we take whatever the world decides via Forex, which incorporates all trades and transactions refined to a single factor per country.”

Forex markets are the ultimate aggregator. Every trade, every war, every inflation spike, every economic boom — it all gets distilled into a single exchange rate per country.

We don’t try to be smarter than the market. We just capture what the market already knows.

The Real Estate Principle

Why does real estate always appreciate? (Seriously, think about it.)

Answer:

• Limited supply
• Increasing demand
• Improvements compound
• Location value grows with surrounding development

Application to Joules:

Joules work the same way:

• Limited supply — You can only earn Joules by backing projects or completing work
• Increasing demand — As the platform grows, more people want Joules
• Improvements compound — Every completed bounty adds to the platform’s value
• Network effects — More members = more value = higher Joule worth

When you buy Joules, you’re buying a piece of the platform’s accumulated work. That work doesn’t disappear. It compounds.

The Ratchet Mechanism

What “Ratchet” Means

A ratchet only moves in one direction. You can tighten a ratchet wrench, but it won’t loosen when you pull back.

Our Forex Ratchet works the same way:

Key insight: You never lose value due to market fluctuations after purchase. The ratchet only moves forward.

Example

Day 1: You buy 100 Joules at 2x GAP rate
       Locked value: $200 credit-equivalent

Day 30: Market dips, new buyers get 1.5x GAP rate
        Your Joules: Still worth $200 (locked rate)

Day 60: Platform grows, new buyers get 3x GAP rate
        Your Joules: Now worth $300 (ratchet forward)

Day 90: You spend 50 Joules
        You get: $150 credit-equivalent (current rate)

Why Not Just Use Market Prices?

Because internal economies need stability.

If every Joule fluctuated with every market movement, you’d have:

• Unpredictable bounty payouts
• Anxiety about when to spend
• Gaming behavior (hoarding, panic selling)
• Distrust in the currency

The ratchet gives you the best of both worlds:

• External accuracy — Captures real-world value signals
• Internal stability — Your locked rate is guaranteed
• Upside participation — You benefit from platform growth
• Downside protection — Market dips don’t hurt you

The GAP Rate

GAP stands for “Global Appreciation Pool” — the mechanism that determines how Joules convert to credit-equivalent.

GAP Rate by Platform Stage

Early backers get higher multipliers because they took more risk. As the platform matures and risk decreases, multipliers normalize.

Practical Application

For Bounty Workers

When you complete a bounty paid in Joules:

1. Your Joules are locked at the current GAP rate
2. That rate is stored with your transaction
3. When you spend, you get at least that rate (probably more)

For Sponsors

When you buy Joules to sponsor the platform:

1. You lock in the current GAP rate
2. Your ownership stake is recorded
3. As the platform grows, your stake appreciates
4. You can use Joules for services or hold for appreciation

For Design Battles

When you ante Joules in a Design Battle:

1. Your Joules convert at current GAP rate
2. The pot is calculated in credit-equivalent
3. Winner receives payout in mixed currency
4. Your locked rate is preserved

The Timber Lesson Applied

Remember the timber company? Here’s how Liana Banyan avoids that trap:

We don’t let internal trading create information vacuums. We capture what the world knows, lock it in, and let it compound.

Summary

1. External signals matter — Forex captures what the world knows
2. Lock at purchase — Your rate is guaranteed
3. Ratchet forward — You benefit from growth, protected from dips
4. Real estate principle — Limited supply + compounding value = appreciation
5. Early backers rewarded — Higher multipliers for higher risk

Related

• Three-Gear Currency — Credits, Marks, and Joules
• Joules Economics: Model A — Full economic model
• Sponsor-to-Own — Own platform patents through Joules

“Ratchet forward, never backward.”