PROVINCA: Formal Technical Whitepaper

Version: Live Date: April 2026 Classification: Technical Specification Status: Draft — Pre-Audit

Abstract

PROVINCA is a dual-token, dual-treasury stablecoin system designed to implement the benefit-sharing principle of the 1967 Outer Space Treaty (OST). The system issues a price-stable transactional currency (DING) and a fixed-supply mulki token (MULKI) backed by a separated treasury architecture that enforces investor/backstop segregation. Stabilization is achieved through natural-ceiling perpetual bonds sold via Dutch auction, with a hard 20% liability cap. Phase progression is encoded in contract logic, transitioning from full collateralization (Phase 1) through citizen distribution (Phase 3) to a terminal celestial-revenue state (Phase 5). MULKI operates through a unified voting pool with natural decay, an LLM constitutional delegate at Phase 4, and an anonymous developer federation for emergency pause.

1. Introduction

1.1 Motivation

Existing stablecoins fall into three categories, each with a critical failure mode:

Category	Examples	Failure Mode
Fiat-backed	USDC, USDT	Administrative freeze risk; single-point censorship
Algorithmic	UST/Luna	Uncapped liability growth; death spiral
Over-collateralized	USDC, LUSD	Capital inefficiency; scalability constraints

PROVINCA introduces a fourth category: natural-constraint stabilization. The system uses over-collateralized backing with a bond-based contraction mechanism that carries a mathematically hard ceiling. The design objective is not perfection but best implementable — the most credible and resilient monetary system buildable with current technology and institutional capacity.

1.2 Scope

This document specifies:

Token architecture and parameters (Section 3)
Monetary mechanics: mint, redeem, bond auction (Section 4)
Treasury separation and revenue waterfall (Section 5)
MULKI: unified pool, LLM delegate, pause architecture (Section 6)
Security model and wargaming framework (Section 7)
Phase transition logic and criteria (Section 8)
Economic analysis and stress testing (Section 9)
Risk factors and falsification conditions (Section 10)

1.3 Definitions

Term	Definition
DING	Price-stable transactional token; elastic supply
MULKI	Fixed-supply mulki token; 21,000,000 max
CR	Collateral Ratio; ratio of backing assets to DING supply
PAR	Target price; anchored to $1.00 USD in Phase 1-4, CPI-indexed in Phase 4+
Bond	Perpetual claim on Protocol Treasury revenue; purchased by burning DING
Protocol Treasury	Investment reserve; takes risk for return
DIWAN Treasury	Backstop reserve; buyer of last resort
sGOV	Staked MULKI; earns 2x voice multiplier

2. Protocol Overview

2.1 Design Principles

Natural constraints over privileged logic. Every mechanic is evaluated against: does this create a natural constraint encoded in tokenomics, or does it require privileged contract logic?
Credibility from impossibility. Critical commitments are enforced by code absence (e.g., no reversion from Phase 5) rather than by promise.
Dual-treasury separation. The same entity cannot be both investor and backstop.
Earning-only governance. The protocol never sells MULKI tokens.

2.2 System Architecture

+--------------------------------------------------+
| Users |
+----------+---------------------------------------+
 | Mint (USDC + MULKI) | Redeem (USDC + MULKI)
 v v
+----------+---------------------+------------------+
| DING Token (Elastic Supply) |
+----------+---------------------+------------------+
 | Burn for bonds | Buy from AMM
 v v
+----------+---------------------+------------------+
| Bond Auction | AMM (DING/USDC) |
| (Dutch, 20% cap)| Constant-product AMM |
+----------+---------------------+------------------+
 | Revenue | Price feed
 v v
+----------+---------------------+------------------+
| Protocol Treasury | DIWAN Treasury |
| (Investment, risk-taking) | (Backstop, no risk)|
+----------+---------------------+------------------+
 | Yield | Bond purchases
 v v
+----------+---------------------+------------------+
| Revenue Waterfall (Phase 4+) |
| 1. Debt service 2. CPI defense 3. Distribution |
+--------------------------------------------------+

3. Token Architecture

3.1 DING Token

Parameter	Value	Rationale
Type	ERC-20	Standard composability
Supply	Elastic	Expands via minting; contracts via redemption/bonds
Peg Target	$1.00 (Phases 1-3); CPI-indexed (Phase 4+)	DING purchasing power
Minting	Deposit USDC + MULKI at CR	Collateral-backed creation
Burning	Redeem for USDC + MULKI; or burn for bonds	Supply contraction mechanisms
MULKI	None	Separation of money and politics
Blacklist	None	Censorship resistance
Upgradeability	Timelocked (7 days)	Emergency response without instant capture

3.2 MULKI Token

Parameter	Value	Rationale
Type	ERC-20	Standard composability
Max Supply	21,000,000	Fixed; non-inflationary
Protocol Treasury Reserve	61% (12,810,000)	Minting reserve and backstop
Rewards Pool	21% (4,410,000)	Staking and participation incentives
Circulating (genesis)	18% (3,780,000)	Initial liquidity and ecosystem
MULKI	Yes	Unified pool voting
Transferable	Yes	Secondary market price discovery
Blacklist	None	Censorship resistance

3.3 Token Comparison Matrix

Feature	DING	MULKI
Supply	Elastic	Fixed
MULKI	No	Yes
Staking	N/A	Yes (2x multiplier)
Minting	Collateral deposit	Protocol never sells
Burning	Redemption / bonds	No burn mechanism
Use case	Medium of exchange	MULKI + collateral

4. Monetary Mechanics

4.1 Minting

Function: mintStable(daiAmount, govAmount)

Formula:

stableMinted = daiAmount / CR
requiredGOV = stableMinted * (1 - CR) * govPrice / daiPrice

Where:

CR = current collateral ratio (0.90 to 1.00)
govPrice = TWAP price of MULKI in USDC terms

Constraints:

CR >= minimumCR (phase-dependent)
govAmount >= requiredGOV
No maximum mint per transaction

4.2 Standard Redemption

Function: redeemStable(stableAmount)

Formula:

daiOut = stableAmount * CR * (1 - redemptionFee)
govOut = stableAmount * (1 - CR) * (1 - redemptionFee)

Redemption Fee Schedule:

Collateral Ratio	Fee
> 98%	0.1%
95% - 98%	0.3%
90% - 95%	0.5%
< 90%	1.0%

4.3 MULKI-Only Redemption

Function: redeemGovOnly(stableAmount)

Formula:

govOut = stableAmount * (1 / govPrice) * (1 - govRedemptionFee)

Where govRedemptionFee = 2x standard redemption fee.

Purpose: Preserve USDC in Protocol Treasury during stress. Self-healing mechanism.

4.4 Bond Mechanism

4.4.1 Bond Structure

Parameter	Value
Type	Perpetual
Face Value	1 DING
Interest	Variable; determined by Dutch auction
Redemption	FIFO by interest rate (highest first)
Ceiling	20% of circulating DING supply

4.4.2 Dutch Auction

Function: startAuction()

Price Descent:

rate(t) = PAR + 10% * (1 - t / 86400)

Where t = seconds since auction start, capped at 86,400 (24 hours).

Clearing: Auction clears when cumulative bid volume equals auction lot size, or at 24-hour minimum rate.

4.4.3 Ceiling Enforcement

require(
 totalBondsOutstanding + newBonds <= stableSupply * MAX_BOND_RATIO,
 "Bond ceiling exceeded"
);

Where MAX_BOND_RATIO = 0.20 (20%).

Behavior at ceiling: New auctions pause automatically. Existing bond redemptions continue. System enters "stress hold" until supply contracts or ceiling resets through redemption.

4.5 AMM Specification

Parameter	Value
Type	Constant-product AMM (x * y = k)
Pair	DING / USDC
Fee	0.30%
Protocol Fee	0.05% to Protocol Treasury
TWAP Window	1 hour
Primary Oracle	AMM-TWAP
Fallback	On-chain TWAP

5. Treasury Architecture

5.1 Protocol Treasury

Address: TBD Type: Smart contract with LLM delegate interface (Phase 4+) Risk Appetite: High

Authorized Assets:

Asset Class	Max Allocation	Rationale
USDC (yield-bearing where available)	60%	Liquid reserves; yield via lending protocols
MULKI	25%	Protocol reserve; non-inflationary backing
Extractive Equity	10%	Revenue-generating equity claims
Celestial Claims	5% (Phase 4+); scaling to 50% (Phase 5)	Future revenue stream

Investment Constraints:

No leverage exceeding 2x
No single position > 15% of treasury
No assets with administrative freeze function as primary holding
Monthly rebalancing via LLM delegate (Phase 4+)