The Solarity: Network Capital Theory, Token Supply Dynamics & the Threshold of Free Solar Energy

Abstract

This paper develops a framework for cryptocurrency protocol valuation, with application to renewable energy incentivization. Analyzing 84 fiat currencies representing 95% of global monetary base (M0), we find a strong correlation (r = 0.869, R² = 0.755) between network participation and protocol value, with per-capita utility converging to approximately $125 per $1,000 of GDP per capita and a log-log elasticity of 1.05 — statistically indistinguishable from proportional scaling.

The central insight is that for reward-based protocols, network size is necessary but not sufficient for price appreciation: protocol design — the ratio of utility generated to tokens distributed — determines the equilibrium around which price converges, with implications for incentive mechanism design across renewable energy and other positive-externality domains.