The Problem
Two Demons. One Is Wrong.
We are told that society's great enemy is Moloch — the demon of defection. The Prisoner's Dilemma. Rational actors defecting even when everyone would be better off cooperating. The natural response: build central institutions that restrain selfish behavior.
But Yonatan Sompolinsky — Kaspa's co-founder, Harvard researcher, and author of the foundational essays on hashd.ag — argues we have misidentified the enemy. Most social failures are not defection problems. They are coordination problems. He names the true demon Azazel.
Two players would both benefit from cooperating, but each has an incentive to defect. The Prisoner's Dilemma. Even when both would gain from cooperation, selfishness wins. Solution: coercion. Regulation. Central planning. Restrain the defector.
Remedy: Institutional CoercionTwo hunters can collaborate on a stag and eat well, or each hunt a hare alone. Both prefer the stag. Neither wants to defect. The problem is the fear that the other won't show up. No selfishness — just missing assurance. Solution: binding commitments.
Remedy: Coordination MarketsThe distinction matters enormously. If you believe society is trapped by Moloch, you build central authorities to coerce behavior. If the demon is Azazel, the answer is different: people already want to cooperate. What they lack are mechanisms to communicate commitment and bind themselves to shared actions.
Coordination markets are that mechanism. And Kaspa is the base layer that makes them trustless.
The Mechanism
Stag. Pack. Hunt.
A coordination market runs in three phases. The mechanism is designed so that no participant risks moving alone, no one can see how close the threshold is, and execution is atomic — all or nothing, all at once.
An entrepreneur spots a better equilibrium — a platform to migrate to, a cause to fund, a market to bootstrap. She posts a Hunt defining the target, the threshold, and the execution logic.
Users submit intendos — cryptographically signed conditional commitments: "I will do X if N others do X." Each sets their own threshold. The pack accumulates opaquely. No one can see how close activation is.
A subset of intendos crosses all their mutual thresholds. The pack hunts. Execution triggers atomically — everyone moves simultaneously. The platform launches with users already there. Capital deploys. The equilibrium shifts.
Four Axiomatic Properties
Any mechanism satisfying these four properties can facilitate large-scale coordination between people and agents who share preferences but could not, until now, safely express actionable commitment.
The qualifying subset executes simultaneously across all participants. No partial execution. No gradual commit. If any threshold is unmet, nothing happens. The pack hunts or it does not.
No one — neither participants nor operators — can determine how close the pack is to activation. This eliminates manipulation, sniping, and the revelation risk of signaling too early.
Users can co-commit the same capital across multiple coordination markets simultaneously. Whatever activates first applies. Unique to crypto rails — structurally impossible on traditional payment APIs.
The output of one coordination market is a valid input to another. Hunts chain into multi-stage sequences. Capital, users, and contracts can cascade atomically across layered coordination events.
Stags in the Wild
Where Coordination Markets Actually Work
The broadest category of coordination market utility is escaping network effect traps — apps that everyone uses but nobody likes, platforms that aggregate users through inertia rather than quality.
Superior DeFi infrastructure exists, but liquidity is trapped on legacy chains. LPs don't migrate because moving alone means providing liquidity to an empty pool. Each LP sets a threshold for migrating to Kaspa — $5M, $50M, $500M — whatever they need to feel safe. Their capital stays productive until a subset's thresholds are mutually satisfied. Capital multiplexing means the same capital can back multiple competing destinations.
A new streaming platform with a different content agenda faces the cold-start problem: users won't subscribe without content, and content creators won't produce without subscribers. Coordination markets let users intendo-commit subscription fees conditional on sufficient others joining. When the threshold crosses, the platform launches pre-funded, pre-subscribed, pre-viable.
Revealing political preferences in a hostile environment is costly. Designated Verifiable Proofs (DVPs) allow intendos to propagate peer-to-peer with full deniability — privately verifiable by trusted peers, unprovable to hostile third parties. Political coordination without the exposure risk that keeps individuals trapped in silent majorities.
A set of investors signs: "I invest $10M if this user migration completes." When the migration hunt resolves, investment commitments execute atomically alongside it. Users migrate, capital deploys, infrastructure appears — all in one atomic event triggered by coordinated conditional commitments chained across markets.
"The internet gave us free speech, constant participation — and almost no capacity to govern itself. It has near-total free speech but lacks methods to act on agreement. Yes you can freely transact with other internet members — but you are still relying on external institutions to enforce those transactions. What we need is an association layer."
The Infrastructure
Why Coordination Markets Need Kaspa
Coordination markets are not just a software problem. They require an underlying settlement layer that is atomic, censorship-resistant, permissionless, and fast enough to resolve coordination in real time. No existing infrastructure satisfied all four requirements until Kaspa.
Kaspa's real-time decentralization (RTD) — the property that each consensus epoch comprises a majority of honest blocks, finalized within one internet RTT — is the precise guarantee coordination markets require. High-stakes collective action is a target for censorship and manipulation. RTD makes that manipulation economically infeasible.
Kaspa's Crescendo upgrade (May 2025) achieved 10 blocks per second. Coordination market rounds finalize in seconds — fast enough for liquidity migrations, political endorsements, and flash collective action. Target: 100 BPS.
Kaspa's UTXO model with covenant upgrades enables conditional spending rules at the base layer — the cryptographic foundation for intendo commitment enforcement without trusted intermediaries.
Kaspa's vProgs framework uses zero-knowledge proofs anchored to Layer 1 to verify off-chain coordination state. The opacity axiom requires cryptographic accumulation hiding — vProgs provides it.
High-stakes coordination is a political target. Kaspa's proof-of-work makes censorship economically costly and structurally difficult — the same guarantees that protect Bitcoin, at internet speed.
Designated Verifiable Proofs enable off-the-record social spreading of intendos. Privately verifiable by trusted peers. Publicly deniable. P2P coordination without revealing yourself to the wrong audience.
Fair launch. No VC allocation. No insider supply. Coordination markets must run on a ledger no single party can censor or front-run. Kaspa's genesis is the cleanest in PoW history.
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