System Attributes
System Operating Model
The operating model describes how the system delivers its core service on a day-to-day basis.
| Category | Description | Illustrative Examples |
|---|---|---|
| Off-Chain Business | A system that depends on centralised entities for essential operational inputs and does not permit independent suppliers except where explicitly allowed. | Circle, Tether |
| On-Chain Protocol | A system whose economically critical coordination, measurement, and settlement are enforced on-chain, even where some work is performed off-chain by independent operators. | Bitcoin, Ethereum |
| Hybrid | A system that depends on both off-chain entities and on-chain protocol components to deliver the core service. | Binance, Optimism |
System Value Creation
Value creation identifies where the productive activity that generates the core product or service actually occurs.
| Category | Description | Illustrative Examples |
|---|---|---|
| On-Chain Value Creation | The core product or service is generated entirely by an on-chain protocol or cryptoeconomic system. | Bitcoin, Uniswap |
| Off-Chain Value Creation | The core product or service is generated primarily by off-chain businesses or service providers. On-chain components mainly serve distribution, settlement, or accounting roles. | Nexo |
| Hybrid Value Creation | The product or service depends on a material combination of on-chain and off-chain production. | Binance, Optimism |
System Value Capture and Routing
Value capture and routing identifies where value ends up after the service has been delivered. A system can create value in one place and capture it somewhere else.
| Category | Description | Illustrative Examples |
|---|---|---|
| On-Chain Value Capture and Routing | Value is captured or routed within the cryptoeconomic system itself or to participants within that system. | Bitcoin, Uniswap |
| Off-Chain Value Capture and Routing | Value is captured or routed to off-chain entities with privileged roles in the system. | Circle |
| Hybrid Value Capture and Routing | Value is captured through both on-chain and off-chain components. | Binance, Nexo |
System Governance
System governance is analysed on a component basis. A governance category should reflect who holds binding decision rights over material system components.
A component is material where a unilateral change could materially affect delivery or access of the core service, monetary flows or asset balances, security assumptions or privileged actors, or user access for a material share of users.
An entity-run interface is not treated as a governed component by default. It becomes material where it is a privileged distribution channel, for example, because it controls exclusive access, has protocol-granted privilege, applies material interface fees, or can materially gate access.
Systems may exhibit multiple governance types across different components.
| Category | Description | Illustrative Examples |
|---|---|---|
| Token-Based Governance | Binding decision rights derive from ownership of freely transferable tokens. Non-binding polls or signalling do not qualify as system-level token-based governance. | Arbitrum, Aave, Uniswap |
| Participant-Based Governance | Binding decision rights are held by privileged participants who satisfy an additional role or identity condition, such as validators, sequencers, councils, or allowlisted operators. | Bitcoin nodes, Ethereum validators, Optimism Citizens' House |
| Entity-Based Governance | Binding decision rights are held by an identifiable off-chain organisation or a small group of organisations. Typical examples include Development Companies and Foundations. | Circle, Tether, Nexo |