A dapptools/foundry-ready library for charging Harberger taxes on non-fungible property.

Installation | License | Usage

Why use libharberger?

• It has high test coverage and uses solmate's high-precision fixed-point number arithmetic.
• It implement's ERC721's Metadata interface extension but it's not an ERC721. Wallets can hence still load any property like an ERC721 but detect that transfers shall be disabled.
• Implementing Harberger taxes as "deprecating licenses," this library structurally minimizes gas costs for sales.

Installation

With dapptools:

dapp install attestate/libharberger

Or foundry:

forge install attestate/libharberger

Usage

pragma solidity ^0.8.6;

import {Harberger, Period, Perwei} from "libharberger/Harberger.sol";

function tax() pure {
  uint256 price = 1 ether;

  Period period = Period(0, block.number);
  Perwei taxRate = Perwei(1, 100) // == 0.01
  uint256 nextPrice = Harberger.getNextPrice(taxRate, period, price);

  //...
}

Caveats & Mechanic

An actual implementation of a Harberger tax would include charging a property owner a tax rate periodically e.g. every month. In, let's say, the traditional banking system: that'd mean the property owner transfers the tax in a transaction monthly. The spiritual predecessor of this library bin-studio/harberger-ads-contracts indeed implemented a collectTaxes method that's supposed to be called periodically by the contract operator.

However, as since then gas prices on Ethereum mainnet have increased significantly and as periodically calling functions seems wastful, we're implementing the Harberger tax as a periodically reduced price value.

Say you buy property X for price p_x = 1 ether at block b_x, where x = 0, then for each block b_x+1 we reduce p_x+1 by the tax rate. If say the tax rate was t = 0.01, then property X price at block 1 b_1 is p_1 = 1 ether - 1 ether * 0.01 = 0.99 ether and at b_2, p_2 = 0.99 ether - 0.99 ether * 0.01 = 0.9801 ether and so on.

We decrease the price in that way until it reaches zero, for when a new buyer can buy the property for free. By taxing this way, we don't need to periodically call a collectTaxes method.

Changelog

0.3.0

• Rename Percentage struct to Perwei
• Add further tests to confirm precision of up to 18 decimal points

NOTE: We only noticed now that between 0.0.1 and 0.2.0, we've made a mistake in semantic versioning as "0.2.0" should actually be "0.1.0". But we're deciding to stick with the mistake and we'll try to properly produce ascending numbers in the future.

0.2.0

• Simplify pricing mechanism

0.0.1

• Initial release

License

See LICENSE file.