An Integrated Ecosystem

Naturally, the protocol layers are themselves intertwined, and together form an integrated system that functions as a digital ecosystem. For example, the ability of the network to achieve optimal decentralization through a thermodynamic balancing approach ensures that endogenous bargaining power in the governance layer remains fairly distributed, and provides a means to future-proof this fair distribution by ensuring a persistent, generalized form of ASIC resistance. As argued in her speech entitled 'Running on Empty: A Proposal to Fill the Gap Between Regulation and Decentralization', SEC Commissioner Hester Pierce makes it clear that the very nature of compliance and the applicability of securities laws have their roots in the state of the network:

...token transactions would not be securities transactions if the network has matured into a decentralized or functioning network on which the token is in active use for the exchange of goods or services. To assess decentralization, the team must consider whether the network is not controlled and is not reasonably likely to be controlled, or unilaterally changed, by any single person, group of persons, or entities under common control. (Hester M. Pierce, SEC Commissioner, 2020)

The Zeno token satisfies both of these requirements -- it is fundamentally more decentralized and distributed than a standard Proof-of-Work (or indeed Proof-of-Stake) network due to the anti-centralization pressure exerted by the balancing protocol, and it is used to trade and exchange goods and services based on Smart Data.

A further function of the network protocol layer that arises from the balancing approach and subsequent ability for live monitoring of that balanced state of the network is the ability to offer service levels for the transfer of Smart Data assets; a party executing a particularly large or important transfer may wish to ensure that the network has reached a sufficient level of decentralisation and/or environmental efficiency before it is carried out. Such a function is easily written into a Smart Data contract within the data protocol layer.