Shattering the Firm

Sophia Ames wakes up to start her first job in mid-nineteenth-century Lowell, Massachusetts. She was recruited the previous week by a driver the Merrimack Manufacturing Company sent through her farm town to collect daughters for labor. After some debate, her father decided to send her off to help gather money for the family. There was no organized labor market, so Merrimack went out and created one. During Sophia’s trip, she watched as her wagon crossed a dam the company built across the Merrimack. It then passed a wheelhouse the company raised over the river to turn the wheels of its textile mill.

On her first day, a loom broke in the weaving room. It was repaired by the company’s own mechanics and the replacement part came from the company’s own machine shop, because no one in America sold power looms at the time. When night came, Sophia went to the company owned boardinghouse staffed by a company employed widow. Come Sunday, Sophia went to the company built church run by a minister on the company’s payroll. Sophia was also assured that her salary would be put in a savings bank run by the company. She was told if she fell ill, the hospital that would take care of her would also fall under the Merrimack umbrella. If Sophia decided to leave without giving notice, her name went to every mill in Lowell, and none would take her.

Clearly, the Merrimack Manufacturing Company was the champion of all vertically integrated companies to ever exist. Manually stacking power, machines, housing, food, credit, medicine, religion, reputation, and going as far as cultivating the labor supply itself. This was done not because it wanted to, but because it had built a factory in an era where none of those things could be bought.

Firms do what they must before they do what they can.

As the inputs a firm consumes become commoditized, its shape changes and adjusts to its substrate. Think of the firm as a cell, a region of planned order in the plasma of the market, with a membrane marking where the plan ends and the market begins. It grows into whatever the surrounding economy won’t reasonably sell it, and shrinks away from whatever it will. In 1840, the Lowell mills had to organize a river, because energy was not yet something you could buy. A textile plant in Vietnam today plugs into a grid and orders its machines off a shelf. The membrane retreated because the plasma they operate within changed. As schools, hospitals, grocers, and builders appeared around them, the company towns became the inefficient option, and the membrane pulled back to the mill.

Modern firms still operate in a substrate where information is scattered and judgment is expensive, so they keep the planning layer inside the membrane the way Lowell mills had kept reputation lists of their employees. This is the last frontier. Intelligence is the next input to commoditize, and when planning can be bought by the token there is nothing left for the membrane to enclose. The firm doesn’t retreat from that. It shatters. Chicxulub is on its way, and only the small will survive. Evolutionary gigantism will once more be punished.

This leaves us with a capital allocation question. If thinking, building, and labor all commoditize, capital allocation can no longer route through systems that lean on relationships and character judgment. That’s the all-too-human part. A fragment run by an agent has no character to judge, so capital may route on contracts a machine can hold. Our company goal is to create completely mechanical capital for the cold, hard economy. To achieve this, we have a strategy which we have outlined, beginning with the creation of synthetic markets for commodities with opaque pricing data.

If the firm shrinks, and if agents are to eventually run their own production lines for their own companies, mechanical capital is imperative. Agent trust is much different than human trust, given the constraints one can place on agents. With fewer unknowns, there comes an enhanced ability to streamline systems to automate capital funding systems. To begin, typically one of the most critical aspects of funding new production lines of already commoditized goods are offtake agreements to allow agents to hedge against future production. This allows them to create these agreements in synthetic markets to finance buildout. Essentially, liquid financial markets evolve towards being harnesses.

This is all a very large goal, and this requires a cohesive vision plan over the course of the next few years, as our world shifts. To undertake these goals, we propose the long term goal of the creation of the Amoeba Farm L1.

Inheritance

Solana is a general purpose chain, and utilizing a general purpose chain means you are downstream of any engineering decisions this environment hosts. Given the long term orientation of our project, a vertically integrated stack is going to be critical, giving the protocol a full range of motion to adapt and shift for the dynamic world we live in. Coming up with the idea for a new asset class is quite easy, most of the concepts we use are simply older ideas rehashed or combined into unique patterns. However, to cut through the market you need a hot knife, and you need some freedom of choice to heat that knife. An excellent example is the history of perpetuals. They had been around for a while before Hyperliquid picked them up, but none of the incumbents then had the vision or range of motion to act and find a weak point in the market to exploit. Concentrated pushes backed by vision and goals allow for walls to come down that no one ever expected.

Given the novelty of what we are proposing, keeping money within the markets and constraining any potential sources of unwanted outflow is critical. Fees are the clearest example, not because they are large, but because on a chain we do not own they are not ours to remove. To build an orderbook on Solana, placing an order costs a transaction fee. That is an unwanted outflow. These fees inherently make our marketplace one great negative sum game. Small optimizations at lower levels bring great benefits over time.

Culture

A chain is not much different from a nation. It is a collective backed by many with a similar long term outlook, with players within the chain competing with one another to create and build up the ecosystem that exists inside. When players inside are cohesive, and share similar long term outlooks, negative sum games all become positive. When games become zero sum inside the borders of a chain or nation systems break down and permanent scarring can be left in the culture. To ensure a negative sum game does not emerge, we do not plan on earning off of fees in any manner. Instead we will have a protocol revenue tub that will primarily be market making to begin with. This new market is something that shouldn’t be walled or gated, by allowing it to diffuse across markets the TAM grows and we earn more by letting its wings grow independently of us.

The expansion of the perpetual world is a major inspiration here. Dreaming is important, but to dream you need to step away from the chaos and sleep, insulation is important for new markets to develop. Here, we are nationbuilding. Here we are cultivating the seed of our worldview, and forging it step by step in the way we envision it best. The boom and bust memecoin cycles of Solana, the attention cycles, are all ways to pervert the core of this project and must be avoided at all costs. Suppose Solana is a parent raising her children in an environment where the games around us are all negative sum, and extractors are rewarded over long term thinkers. How do you think her children will grow up? Unaffected by their environment with the agility to take their own path? Or have they been optimized through the environment to run within the world they know? Incentives wrote this culture, and these incentives can be altered to write a different one. That is what a constitution is for.

The Amoeba L1

Here we will give an outlook of our plans with the Amoeba L1. A full technical report will be published separately this upcoming weekend. Functionally, the Amoeba L1 is an orderbook chain specialized for settlement on our oracle, and on capped futures contracts. As important as the orderbook is the data pipeline for oracle submission work, which will scale as the markets themselves do. The only thing that will be offered on it are hardware markets, and a spot market for the AMBA token. Given we do not have liquidations on our platform, there is no margin engine to build here.

We plan to make the market neutral sum by eliminating fees, no maker fee, no taker fee. Either way, maker-taker was invented by Island ECN in the late ’90s as a venue-competition tactic. In a blue water market such as this, there is no venue to compete with. These markets are completely fresh and untouched. RAMX, NANDX, and BATX simply just trade in exactly one place. A maker who wants that exposure, or wants to earn the spread on it, has nowhere else to go.

To begin, we would closely follow the Hyperliquid path of bootstrapping a chain for a specific goal. A few colocated nodes operated by the Amoeba foundation to decrease geographical latency while in early phases would offer users a superior experience. The consensus engine will be built off of Malachite, the Tendermint-lineage BFT. Initially we are targeting ~25ms confirmation time for colocated users. We plan to be post-quantum from genesis, utilizing Falcon-512 root keys for every account. Your Solana key is used once, for the claim handshake.

To top the overview off, it goes without saying everything will be opensourced. Our consistent policy will be to take the action that allows these new markets to diffuse the neatest into existing markets and culture. We win by pushing the blueprint for the vision of the future we see.

How could you drop all of this on us so quickly?

The Solana market is going nowhere, and actually will continue to be strengthened over the course of the month at a similar pace we have seen in the past. Also, the token would come with you, we actually want to encourage multi-chain support for our market, but our focus will be shifted onto the custom chain after the shift is complete. The custom chain is a pretty straightforward hike in token use case here too.

When energy and unskilled labor commoditized we watched the textile mill retreat towards the textiles themselves. Now humanity observes as intelligence commoditizes, and the firm will adjust to this reality. This is for the firm that fits what’s left.