Mechanism Under conventional p…wing to more productive users —– a central concern in the econ…p.pdf) Depreciating Licenses —– the paper the next section co…ng measure on business assets.

Investment versus allocative e… second-order investment cost —– and symmetrically at the rent…real-world resource licensing —– radio spectrum, fishing right…l extraction rights, and land —– and note that pricing the rec…ger-style self-assessed taxes.

Blockchain experiments De la R…on, sketched concrete designs —– Harberger pixel maps, attenti…s, and community access slots —– and observed that tax revenue…gital collectibles under COST —– tradeable music rights and ba…-style always-for-sale assets —– and described Harberger-taxed…ent in the asset is desirable —– assumptions that do not hold …ion equals the purchase price —– an intuitive figure for patro…e may buy at the posted price —– with the tax paid to the arti…ruary 2026, carrying 30 forks —– the template a copy of this d…ership. The Geo Web (https://web.archive.org/web/20260121162636/https://docs.geoweb.network/) , livedeployed on Optimism, divides the glob…l under three rules (https://web.archive.org/web/20260311165936/https://docs.geoweb.network/concepts/partial-common-ownership/) : the licensor publicly decl…published parameters (https://web.archive.org/web/20250814180352/https://docs.geoweb.network/community-…-governance/network-parameters/) set the network fee at 10% …es as network funds (https://web.archive.org/web/20260121152320/https://docs.geoweb.network/concepts/network-funds/) for public goods, and descr…ng quadratic funding (https://web.archive.org/web/20260208082525/https://docs.geoweb.network/concepts/streaming-quadratic-funding/) pilot run with Gitcoin and …eoweb.network) on 7 May 2026. Its domain, geoweb.network, now serves a parking page (read 6 October 2026), so the documentation linked here is the Internet Archive’s copy.

Relevance to Caper Harberger-s…t must allocate scarce rights —– featured placements, named ro… or other exclusive positions —– without running repeated manu… taken from them at any price.

References - Eric A. Posner an… University of Chicago, 2017) —– the version Posner and Weyl c…sartworkisalwaysonsale.com/) —– a Harberger-taxed artwork run…ial Common Ownership (https://web.archive.org/web/20260311165936/https://docs.geoweb.network/concepts/partial-common-ownership/) and Network Parameters (https://web.archive.org/web/20250814180352/https://docs.geoweb.network/community-…-governance/network-parameters/) . Geo Web documentation.

Topic Property-rights and taxa…ship self-assessed tax (COST); partial common ownership (PCO); self-assessed licenses Key t…i/economics/transaction-costs)

Blockchain experiments De la R…urning up in the same designs. Land at scale: the Geo Web The largest standing deployment uses the name RadicalxChange gave the regime, partial common ownership. The Geo Web (https://docs.geoweb.network/) , live on Optimism, divides the globe into digital land parcels to which publishers anchor augmented-reality content, and it administers every parcel under three rules (https://docs.geoweb.network/concepts/partial-common-ownership) : the licensor publicly declares a For Sale Price, pays a network fee set as a percentage of that price, and anyone can force a transfer by paying it. The fee is streamed per second in ETHx rather than billed, and a licensor whose stream runs dry loses the parcel to a Dutch auction that falls from the old price to zero, with the proceeds going to the former holder. Its answer to the investment objection above is a softer forced sale. A bidder posts a fully collateralised bid, and the licensor has seven days either to accept it or to keep the parcel by paying the network a penalty of 10% of the bid – in effect the fee they avoided by declaring too low. The published parameters (https://docs.geoweb.network/community-and-governance/network-parameters) set the network fee at 10% of the For Sale Price a year, the rejection penalty at 10% of the bid, the response window at 7 days and the foreclosure auction at 14, all adjustable by governance; the market opened with a fair-launch Dutch auction that ran from 15 December 2022 to 14 January 2023. The docs define the fees as network funds (https://docs.geoweb.network/concepts/network-funds) for public goods, and describe a streaming quadratic funding (https://docs.geoweb.network/concepts/streaming-quadratic-funding) pilot run with Gitcoin and Superfluid from 21 February to 21 April 2024 – the tax-to-commons loop de la Rouviere sketched in 2018, attached to a working registry, and a live variant of quadratic funding (/wiki/dao-governance/concepts/voting/quadratic-voting-and-funding) . The core contracts (https://github.com/Geo-Web-Project/core-contracts) were last pushed on 29 March 2024; the project's site repository (https://github.com/Geo-Web-Project/geoweb.network) on 7 May 2026.

Relevance to Caper Harberger-s…lable to on-chain communities. The nearest thing in a caper is its bonding curve (/wiki/markets/bonding-curve) , and it is the opposite regime in one respect that matters: the unsold inventory is always for sale at a price set by formula rather than by anyone's self-assessment, while no holder's tokens can ever be taken from them at any price.

References - Eric A. Posner an…r/thisartworkisalwaysonsale) . - Geo Web (2022–). Partial Common Ownership (https://docs.geoweb.network/concepts/partial-common-ownership) and Network Parameters (https://docs.geoweb.network/community-and-governance/network-parameters) . Geo Web documentation.

Blockchain experiments De la R…munity pools, bonding curves (/wiki/markets/bonding-curve) , curation markets (/wiki/economics/curation-mark…h as cadCAD to model outcomes. The rate in production That 100% figure is not only a proposal. De la Rouviere’s own This Artwork Is Always On Sale (https://thisartworkisalwaysonsale.com/) has run a modified COST on Ethereum since 21 March 2019: the owner must always post a sale price, the contract deducts patronage from a deposit at a fixed annual rate, and anyone may buy at the posted price — with the tax paid to the artist as a perpetual royalty rather than into a public purse. The first edition carries a 5% patronage rate and was restored in 2021 after damage was found; a second edition launched in June 2020 at 100% a year, the rate the post above argues for, in the project’s own words “in order to continue experimentation”. The site was last updated in February 2026 and its contract repository (https://github.com/simondlr/thisartworkisalwaysonsale) was last pushed on 2 February 2026, carrying 30 forks — the template a copy of this design starts from. The same author states on that site that he co-invented and popularised token bonding curves (/wiki/markets/bonding-curve) , which is part of why the two mechanisms keep turning up in the same designs.

References - Eric A. Posner an…onage-markets) . simondlr.com. - Simon de la Rouviere (2019–). This Artwork Is Always On Sale (https://thisartworkisalwaysonsale.com/) — a Harberger-taxed artwork running on Ethereum since March 2019, with the contracts on GitHub (https://github.com/simondlr/thisartworkisalwaysonsale) .

Mechanism Under conventional p…ove the asset. Posner and Weyl's analysis of COST quantifies report the size of that trade rather trade: with tax rates of roughly 2.5–7% per year, the scheme captures an estimatedhan derive it. The calibration is Weyl and Zhang's: across most of their calibrations, Harberger taxation reaches 70–90% of the maximum possible allocative welfare gains, whiland the investment distortions consume only about 10–20% of those gainlosses erode only 10–20% of those gains. The paper Posner and Weyl cite for that result is Weyl and Zhang's 2017 Coase-Sandor working paper Ownership of the Means of Production, later retitled (https://anthonyleezhang.github.io/pdfs/ownership.pdf) Depreciating Licenses — the paper the next section covers. On the rate the COST paper gives no single figure: its abstract puts the likely range at 5–10% a year for most assets, while the body reports roughly 2.5% as near-optimal when only investment and allocative efficiency are traded off, rising to about 7% once the ancillary value of the tax revenue is counted, 7% being the annual turnover Weyl and Zhang measure on business assets.

References - Eric A. Posner an…conomic Policy 14(3): 422–448. Earlier circulated as Ownership of the Means of Production (https://anthonyleezhang.github.io/pdfs/ownership.pdf) (Coase-Sandor Institute for Law & Economics Research Paper No. 765, University of Chicago, 2017) — the version Posner and Weyl cite for the welfare calibration reported above. - Simon de la Rouviere (2018)…onage-markets) . simondlr.com.

Topic Property-rights and taxa…treasury management (/wiki/daos-governance/concepts/treasury/dao-treasur…i/economics/transaction-costs)

A Harberger tax is a property …set perpetually for sale. The mechanism (/wiki/economics/mechanism-design) was formalized by Eric Posner …lways-for-sale digital assets.

Relevance to Caper Harberger-s…treasury management (/wiki/daos-governance/concepts/treasury/dao-treasur…lable to on-chain communities.

Topic Property-rights and taxa…treasury management (/wiki/daos/concepts/treasury/dao-treasury-management) , Tr…i/economics/transaction-costs)

Relevance to Caper Harberger-s…treasury management (/wiki/daos/concepts/treasury/dao-treasury-management) . Cap…lable to on-chain communities.

Topic Property-rights and taxation mechanism Also known as Common ownership self-assessed tax (COST); self-assessed licenses Key trade-off Allocative efficiency vs. investment efficiency Related Voting mechanisms (/wiki/governance/voting-mechanisms) , DAO treasury management (/wiki/dao/concepts/dao-treasury-management) , Transaction costs and property rights (/wiki/economics/transaction-costs)

A Harberger tax is a property arrangement defined by two rules: owners publicly self-assess the value of what they hold and pay a recurring tax on that declared value, and anyone may buy the asset at any time by paying the declared price. Understating the value invites a forced sale; overstating it inflates the tax bill. The combination pushes owners toward honest valuations and keeps every taxed asset perpetually for sale. The mechanism was formalized by Eric Posner and E. Glen Weyl as the common ownership self-assessed tax (COST) (https://academic.oup.com/jla/article/9/1/51/3572441) , and it has since been studied as a design for public resource licensing and adopted by blockchain developers as a template for always-for-sale digital assets.

Mechanism Under conventional private property, an owner who does not wish to sell can hold out for a price far above their true valuation. A widely read 2018 explainer by Simon de la Rouviere argues that the Harberger forced-sale rule eliminates this seller holdout (https://medium.com/@simondlr/what-is-harberger-tax-where-does-the-blockchain-fit-in-1329046922c6) : because anyone can take the asset at its self-assessed price, owners can no longer demand inflated prices, removing a deadweight loss that otherwise blocks assets from flowing to more productive users — a central concern in the economics of transaction costs and property rights (/wiki/economics/transaction-costs) . The gain is not free. As the same explainer summarizes: Harberger tax reduces investment efficiency at a gain in allocative efficiency of ownership.An owner who may be bought out at any moment has weaker incentives to improve the asset. Posner and Weyl's analysis of COST quantifies the trade: with tax rates of roughly 2.5–7% per year, the scheme captures an estimated 70–90% of the maximum possible allocative welfare gains, while investment distortions consume only about 10–20% of those gains.

Investment versus allocative efficiency The formal treatment of this trade-off is given by E. Glen Weyl and Anthony Lee Zhang in Depreciating Licenses (https://www.aeaweb.org/articles?id=10.1257/pol.20200426) (2022). They show that no existing license design achieves the first-best on both margins: perpetual tradable licenses give owners strong incentives to invest but let them hold out for high prices in secondary markets, distorting reallocation, while short-term licenses allocate efficiently but destroy the incentive to invest. Their proposed instrument, the depreciating license, is a perpetual license that decays at a chosen rate τ. Each period the administrator issues a fraction τ of new equity in the license and sells it in a second-price auction; the incumbent, holding the remaining 1−τ, either buys out the administrator's share at τ times the second-highest bid or sells to a higher bidder. The design is an explicit partial property right interpolating between short-term rental (τ = 1: fully allocatively efficient, no investment incentive) and perpetual ownership (τ = 0: fully investment efficient, distorted allocation). The paper's main theorem is that the optimal depreciation rate lies strictly between these extremes: adding a small amount of depreciation to a perpetual license yields a first-order allocative welfare gain, through reduced markups, at only a second-order investment cost — and symmetrically at the rental end. Absent investment and private values, τ leaves total government revenue unchanged; when they are present, depreciation reduces revenue relative to perpetual sale, but the loss is second-order near τ = 0, so an administrator weighing revenue against welfare still optimally sets τ above zero. Extensions covering transaction costs, private-valued investments, additional competing buyers, and multi-period investment payoffs lower the optimal rate but never push it to a corner. Weyl and Zhang target real-world resource licensing — radio spectrum, fishing rights, pollution permits, mineral extraction rights, and land — and note that pricing the reclaimed share by competitive auction rather than owner self-assessment addresses a key critique of pure Harberger-style self-assessed taxes.

Blockchain experiments De la Rouviere's explainer also argued that blockchains are natural infrastructure for Harberger property: property registries (cadastres) map well onto immutable ledgers, and smart contracts can enforce the tax and forced-sale rules automatically. It identified NFTs and virtual worlds such as Decentraland as closed-loop economies suited to low-stakes experimentation, sketched concrete designs — Harberger pixel maps, attention and advertising markets, and community access slots — and observed that tax revenue becomes programmable, flowing into community pools, bonding curves (/wiki/economics/curation-markets) , or basic-income schemes rather than a traditional state treasury. Art and patronage In Radical Markets in the Arts (https://medium.com/radicalxchange/radical-markets-in-the-arts-13c27d3b7283) (2018), published with the RadicalxChange movement, de la Rouviere proposed applying COST to artistic intellectual property: creators self-assess a work's value, pay tax on the declaration, and anyone can buy the work at the declared price. Always-for-sale intellectual property, he argued, circulates more efficiently than fixed copyright terms, whose expiration dates amount to arbitrary guesses about when a work should be exploited. The essay explored blockchain-based digital collectibles under COST — tradeable music rights and badges, concert-ticket and digital-art memorabilia, and CryptoKitties-style always-for-sale assets — and described Harberger-taxed patronage seats, in which holding a status position requires ongoing tax payments that flow to the artist. Tax revenue could recycle into the commons so that "the arts, more directly, would fund more of the arts," with quadratic funding (Liberal Radicalism) as a complementary mechanism amplifying many small contributions to niche work. Choosing a tax rate A follow-up 2019 post framed the tax rate as the key open design question (https://home.simondlr.com/posts/exploring-harberger-tax-in-patronage-markets) for virtual collectibles and patronage markets. The academic literature recommends low rates, near an asset's expected turnover, because it targets physical assets where turnover is expensive and investment in the asset is desirable — assumptions that do not hold for virtual items. De la Rouviere argued that rates should instead vary by asset type: lower for items with use value, higher for pure collectibles and status assets. Extreme rates produce a pricing paradox: at 0.01% per annum, a patron wishing to give $100 a year must self-assess a prohibitive $1 million price, while at 10,000% per annum the price collapses to around $1, destroying any incentive to trade. For patronage markets he proposed roughly 100% per annum, so the annual donation equals the purchase price — an intuitive figure for patrons. The aim of such a rate is to direct capital to beneficiaries while retaining enough speculative interest to keep the market alive, though the post acknowledged unresolved tensions between altruism, status incentives, and market mechanics, and suggested simulation tooling such as cadCAD to model outcomes.

Relevance to Caper Harberger-style mechanisms are candidate tools for DAOs that must allocate scarce rights — featured placements, named roles, or other exclusive positions — without running repeated manual auctions: self-assessed pricing keeps such rights permanently contestable and converts their occupancy into a continuous revenue stream for the community. For communities on Caper, adopting such a mechanism would be a question of governance design (/wiki/governance/voting-mechanisms) and treasury management (/wiki/dao/concepts/dao-treasury-management) . Caper does not implement Harberger taxes; they are described here as part of the design space available to on-chain communities.

References - Eric A. Posner and E. Glen Weyl (2017). Property Is Only Another Name for Monopoly (https://academic.oup.com/jla/article/9/1/51/3572441) . Journal of Legal Analysis 9(1): 51–123. - Simon de la Rouviere (2018). What is Harberger Tax & Where Does The Blockchain Fit In? (https://medium.com/@simondlr/what-is-harberger-tax-where-does-the-blockchain-fit-in-1329046922c6) . Medium. - E. Glen Weyl and Anthony Lee Zhang (2022). Depreciating Licenses (https://www.aeaweb.org/articles?id=10.1257/pol.20200426) . American Economic Journal: Economic Policy 14(3): 422–448. - Simon de la Rouviere (2018). Radical Markets in the Arts (https://medium.com/radicalxchange/radical-markets-in-the-arts-13c27d3b7283) . RadicalxChange (Medium). - Simon de la Rouviere (2019). Exploring Harberger Tax Rates in Virtual Collectibles & Patronage Markets (https://home.simondlr.com/posts/exploring-harberger-tax-in-patronage-markets) . simondlr.com.