In the FlexUp Economic Model, Equity has a specific meaning that differs from its general meaning in the conventional economic system.

What is Equity?

In FlexUp, Equity refers to a category of flexible commitments that have the lowest payment priority — specifically, the credit or token priority levels.

Equity holders receive payment only after all higher-priority obligations — Firm, Preferred, Flex, and Superflex — have been met.

These commitments have the following characteristics:

• Can only be issued by an Account that has signed a FlexUp Charter and in the context of contracts that are governed by that Charter.
• The account that issues the equity (the payor) is referred to as the “Project”.
• The account that receives the equity (the payee) is referred to as the “Associate”.
• The contract is referred to as an “Associate Contract”.
• They are processed once per year during the Annual Resolutions Cycle.
• Equity commitments are conditional: they are only payable if the Project has sufficient Net Excess Cash at the end of the year.

Why create this new type of equity?

The term equity is used because it fulfills a similar role to shareholder equity in the conventional economic system: it represents a participation in the risks and rewards of the Project.

• However, the FlexUp model extends the meaning of equity equity by making it available to all participants in a Project, not just shareholders, and for any type of Project, not just companies.
• To provide maximum flexibility, and to cover the wide range of possible situations, the FlexUp model allows for two types of equity commitments: credits and tokens.

This model ensures that all Associates are aligned with the success of the Project and that both risks and rewards are shared fairly and transparently.