> For the complete documentation index, see [llms.txt](https://docs.rwa.vip/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.rwa.vip/ii.-economic-theory-of-rwa-ecosystem/internal-coordination-theory-applied-to-rwa-ecosystem-protocol.md).

# Internal Coordination Theory Applied to RWA Ecosystem Protocol

Internal coordination is equally important as price coordination in the RWA Ecosystem protocol. The set of rules in the protocol essentially includes three aspects:

* ***Staking** (Internal Coordination)*
* ***Bonds** (Price Coordination)*
* ***Treasury** (Reserves)*

This rule set is controlled by three main levers:

* ***Reward Rates and APY** (Internal Measure of Internal Coordination)*
* ***Bond Control Variables** (Internal Measure of Price Coordination)*
* ***Premiums above RFV***\
  *(Internal Measure of Price Coordination; RFV refers to Risk-Free Value, detailed in the whitepaper)*

Policy levers help the RWA Ecosystem self-regulate under unstable market conditions. These levers act as focal points, either counteracting or working with market forces to maintain productivity.

{% tabs %}
{% tab title="Staking (Internal Coordination)" %}
(3, 3) is a win-win where both players stake RWA tokens and receive compound rewards. Internal coordination—cooperation—generates more productivity than price coordination, which is competitive and zero-sum. Internal coordination synchronizes demand, while price coordination addresses supply.
{% endtab %}

{% tab title="Bonds (Price Coordination)" %}
(1, 1) is a lesser win-win. Bonds allow buyers to purchase RWA tokens at a discount by exchanging other assets. The discount is controlled by market forces and policy variables. Bond sales are limited by Treasury targets, with the discount decreasing as sales approach capacity.
{% endtab %}

{% tab title="Treasury (Reserve Support)" %}
Funds from bond sales support the value of RWA tokens. RFV, a stablecoin amount, backs each minted token. The Treasury must hold this RFV amount in stablecoins, with reserves in other assets that may be more volatile.
{% endtab %}
{% endtabs %}