Chapter 26: System Integration
"A monetary system is not four separate systems bolted together—it's one system with four interdependent functions. Integration is where the design succeeds or fails."
Overview
Chapters 21-25 described each K-Dollar subsystem individually. This chapter shows how they work together: the data flows, dependencies, timing, and coordination that make the K-Dollar system function as an integrated whole.
Chapter Structure:
- Integration Architecture — The four subsystems as one system
- Data Flow Map — What moves between subsystems
- Critical Dependencies — What must happen before what
- Timing and Synchronization — Coordinating across subsystems
- Event Processing — How changes propagate
- Failure Modes — What happens when subsystems fail
- Integration Points — Where subsystems connect
26.1 Integration Architecture
The Four Subsystems
┌─────────────────────────────────────────────────────────────────────────┐
│ K-DOLLAR SYSTEM INTEGRATION │
├─────────────────────────────────────────────────────────────────────────┤
│ │
│ ┌─────────────────────────────────────────────────────────────────┐ │
│ │ GOVERNANCE │ │
│ │ • Voting weights • Policy rules • Access control │ │
│ └───────────────────────────────┬─────────────────────────────────┘ │
│ │ │
│ ┌───────────────────────┼───────────────────────┐ │
│ │ │ │ │
│ ▼ ▼ ▼ │
│ ┌───────────────┐ ┌───────────────┐ ┌───────────────┐ │
│ │ │ │ │ │ │ │
│ │ VERIFICATION │◄────►│ ISSUANCE │◄────►│ SETTLEMENT │ │
│ │ │ │ │ │ │ │
│ │ • Production │ │ • Creation │ │ • Transactions│ │
│ │ • Validation │ │ • Allocation │ │ • Balances │ │
│ │ • Attestation │ │ • Destruction │ │ • Clearing │ │
│ │ │ │ │ │ │ │
│ └───────┬───────┘ └───────┬───────┘ └───────┬───────┘ │
│ │ │ │ │
│ └──────────────────────┼──────────────────────┘ │
│ │ │
│ ▼ │
│ ┌─────────────────────────┐ │
│ │ BLOCKCHAIN ANCHOR │ │
│ │ (Audit Layer) │ │
│ └─────────────────────────┘ │
│ │
└─────────────────────────────────────────────────────────────────────────┘
Subsystem Responsibilities
| Subsystem | Primary Function | Outputs To | Inputs From |
|---|---|---|---|
| Verification | Confirm energy production | Issuance, Governance | Sensors, satellites, auditors |
| Issuance | Create/destroy K-Dollars | Settlement | Verification, Governance |
| Settlement | Process transactions | Account holders | Issuance, participants |
| Governance | Make decisions | All subsystems | Verification (weights), voters |
26.2 Data Flow Map
Primary Data Flows
┌─────────────────────────────────────────────────────────────────────────┐
│ PRIMARY DATA FLOWS │
├─────────────────────────────────────────────────────────────────────────┤
│ │
│ FLOW 1: Production → Voting Weight │
│ ┌─────────────────────────────────────────────────────────────────┐ │
│ │ Verification ──verified production──► Governance (weight calc) │ │
│ │ │ │
│ │ Verified energy production determines voting weight │ │
│ │ Frequency: Annual recalculation; quarterly validation │ │
│ └─────────────────────────────────────────────────────────────────┘ │
│ │
│ FLOW 2: Production → K$ Allocation │
│ ┌─────────────────────────────────────────────────────────────────┐ │
│ │ Verification ──verified production──► Issuance (allocation) │ │
│ │ │ │
│ │ Verified production triggers K$ creation │ │
│ │ Frequency: Continuous (as production verified) │ │
│ └─────────────────────────────────────────────────────────────────┘ │
│ │
│ FLOW 3: Issuance → Balances │
│ ┌─────────────────────────────────────────────────────────────────┐ │
│ │ Issuance ──new K$ created──► Settlement (account credit) │ │
│ │ │ │
│ │ Newly created K$ appear in recipient accounts │ │
│ │ Frequency: Per issuance event (weekly-monthly) │ │
│ └─────────────────────────────────────────────────────────────────┘ │
│ │
│ FLOW 4: Redemption → Destruction │
│ ┌─────────────────────────────────────────────────────────────────┐ │
│ │ Settlement ──redemption request──► Issuance (K$ destruction) │ │
│ │ │ │
│ │ Redeemed K$ removed from supply │ │
│ │ Frequency: Per redemption event (rare) │ │
│ └─────────────────────────────────────────────────────────────────┘ │
│ │
│ FLOW 5: Governance → Policy │
│ ┌─────────────────────────────────────────────────────────────────┐ │
│ │ Governance ──approved policies──► All subsystems │ │
│ │ │ │
│ │ Policy decisions change subsystem behavior │ │
│ │ Frequency: Per governance decision │ │
│ └─────────────────────────────────────────────────────────────────┘ │
│ │
└─────────────────────────────────────────────────────────────────────────┘
Data Flow Detail
| Flow | From | To | Data | Frequency |
|---|---|---|---|---|
| Production verification | Verification | Issuance | Verified kWh, entity ID, period | Continuous |
| Voting weight | Verification | Governance | Verified production, weight calculation | Annual + quarterly |
| K$ creation | Issuance | Settlement | Issuance transaction, recipient, amount | Weekly-monthly |
| K$ destruction | Issuance | Settlement | Burn transaction, source account, amount | Per redemption |
| Policy update | Governance | All | New policy, effective date, parameters | Per decision |
| Balance query | Settlement | Governance | Account balance (for eligibility) | On demand |
| Audit trail | All | Blockchain | Merkle roots, attestations, timestamps | Daily-weekly |
26.3 Critical Dependencies
Dependency Chain
Some operations cannot proceed until others complete:
┌─────────────────────────────────────────────────────────────────────────┐
│ CRITICAL DEPENDENCY CHAIN │
├─────────────────────────────────────────────────────────────────────────┤
│ │
│ 1. VERIFICATION must complete before ISSUANCE │
│ ┌──────────────────────────────────────────────────────────────┐ │
│ │ Cannot create K$ without verified production data │ │
│ │ Issuance blocked if verification pending or disputed │ │
│ └──────────────────────────────────────────────────────────────┘ │
│ │
│ 2. ISSUANCE must complete before SETTLEMENT (for new K$) │
│ ┌──────────────────────────────────────────────────────────────┐ │
│ │ Cannot credit account until K$ created │ │
│ │ Settlement waits for issuance confirmation │ │
│ └──────────────────────────────────────────────────────────────┘ │
│ │
│ 3. VERIFICATION must complete before GOVERNANCE (for weight) │
│ ┌──────────────────────────────────────────────────────────────┐ │
│ │ Cannot calculate voting weight without verified production │ │
│ │ Weight disputes must resolve before voting │ │
│ └──────────────────────────────────────────────────────────────┘ │
│ │
│ 4. GOVERNANCE must approve before POLICY takes effect │
│ ┌──────────────────────────────────────────────────────────────┐ │
│ │ Subsystems don't change behavior until vote passes │ │
│ │ Effective dates enforced by all subsystems │ │
│ └──────────────────────────────────────────────────────────────┘ │
│ │
│ 5. SETTLEMENT must confirm before REDEMPTION destroys K$ │
│ ┌──────────────────────────────────────────────────────────────┐ │
│ │ Energy delivery must be confirmed │ │
│ │ K$ held in escrow until delivery verified │ │
│ └──────────────────────────────────────────────────────────────┘ │
│ │
└─────────────────────────────────────────────────────────────────────────┘
Dependency Matrix
| Operation | Requires | Can Block |
|---|---|---|
| Verify production | Sensor data, reconciliation | Issuance, weight calculation |
| Calculate weight | Verified production, population | Voting |
| Cast vote | Valid weight, proposal open | Decision |
| Issue K$ | Verified production, rate | Account credit |
| Settle transaction | Sufficient balance, authorization | None (terminal) |
| Redeem K$ | Balance, supplier, delivery | K$ destruction |
| Destroy K$ | Confirmed redemption | None (terminal) |
26.4 Timing and Synchronization
Time-Based Coordination
Different subsystems operate on different time scales:
| Subsystem | Primary Time Scale | Synchronization Points |
|---|---|---|
| Verification | Continuous (sensors) → daily (reconciliation) | Weekly issuance batch |
| Issuance | Weekly-monthly batches | After verification reconciliation |
| Settlement | Real-time (RTGS) | Continuous |
| Governance | Vote periods (days-weeks) | After weight calculation |
Annual Cycle
┌─────────────────────────────────────────────────────────────────────────┐
│ ANNUAL CYCLE │
├─────────────────────────────────────────────────────────────────────────┤
│ │
│ Q1: WEIGHT RECALCULATION │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ Jan: Prior year verification finalized │ │
│ │ Feb: Weight calculation for all participants │ │
│ │ Mar: Challenge period for weight disputes │ │
│ │ → New weights effective for year's voting │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
│ CONTINUOUS: VERIFICATION AND ISSUANCE │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ Daily: Sensor data collected │ │
│ │ Weekly: Reconciliation completed │ │
│ │ Weekly-Monthly: Issuance batches processed │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
│ CONTINUOUS: SETTLEMENT │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ Real-time: Transactions processed as submitted │ │
│ │ Daily: Clearing and netting (for applicable tiers) │ │
│ │ Weekly: Blockchain anchoring │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
│ AS NEEDED: GOVERNANCE │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ Proposals submitted as needed │ │
│ │ Voting periods per proposal type (14-90 days) │ │
│ │ Results certified after voting closes │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
└─────────────────────────────────────────────────────────────────────────┘
Synchronization Protocol
When operations span subsystems:
Cross-Subsystem Operation: New Entity Registration
1. APPLICATION (Governance)
• Entity submits registration application
• Governance validates eligibility
• Provisional registration issued
2. VERIFICATION SETUP
• Verification infrastructure deployed
• Test period begins (6 months)
• Production data collection starts
3. VERIFICATION CONFIRMATION
• 6-month production data validated
• Confidence score meets threshold
• Verification status: ACTIVE
4. ISSUANCE ACTIVATION
• Entity added to issuance allocation
• First production credited
• K$ creation begins
5. SETTLEMENT ACTIVATION
• Account opened in settlement system
• K$ deposited
• Entity can transact
6. GOVERNANCE ACTIVATION
• Voting weight calculated
• Entity can participate in governance
• Full member status
26.5 Event Processing
Event-Driven Integration
Subsystems communicate through events:
| Event Type | Source | Consumers | Effect |
|---|---|---|---|
ProductionVerified |
Verification | Issuance | Triggers allocation calculation |
IssuanceComplete |
Issuance | Settlement | Credits recipient account |
RedemptionRequested |
Settlement | Issuance | Initiates redemption process |
RedemptionConfirmed |
Verification | Issuance | Triggers K$ destruction |
ProposalApproved |
Governance | All | Policy change takes effect |
WeightCalculated |
Verification | Governance | Updates voting weights |
AnomalyDetected |
Verification | Governance | Triggers review process |
Event Flow Example
Scenario: Monthly Issuance Cycle
┌─────────────────────────────────────────────────────────────────────────┐
│ │
│ DAY 1-7: Production Data Collection │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ Verification receives sensor data from all facilities │ │
│ │ Events: DataReceived (millions per day) │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
│ DAY 7: Reconciliation │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ Verification reconciles all data sources │ │
│ │ Events: ReconciliationComplete (per entity) │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
│ DAY 8: Production Verification │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ Verification confirms production figures │ │
│ │ Events: ProductionVerified (per entity) │ │
│ │ → Triggers: Issuance allocation calculation │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
│ DAY 9: Allocation Calculation │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ Issuance calculates each entity's K$ allocation │ │
│ │ Events: AllocationCalculated (per entity) │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
│ DAY 10: K$ Creation │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ Issuance creates new K$ and credits accounts │ │
│ │ Events: IssuanceComplete (per entity) │ │
│ │ → Triggers: Settlement account credits │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
│ DAY 10: Account Credits │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ Settlement credits recipient accounts │ │
│ │ Events: AccountCredited (per entity) │ │
│ │ → Triggers: Notification to entity │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
│ DAY 14: Blockchain Anchoring │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ All issuance events anchored to blockchain │ │
│ │ Events: AnchorComplete │ │
│ │ → Public verification available │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
└─────────────────────────────────────────────────────────────────────────┘
26.6 Failure Modes
Subsystem Failure Impact
| Failed Subsystem | Impact | Mitigation |
|---|---|---|
| Verification | Issuance halts; voting weights frozen | Graceful degradation; use last known data |
| Issuance | No new K$ created; existing circulation continues | Queue issuance; catch up when restored |
| Settlement | Transactions blocked | RTGS backup; manual processing |
| Governance | No new decisions; existing policies continue | Emergency provisions; proxy voting |
Failure Scenarios
┌─────────────────────────────────────────────────────────────────────────┐
│ FAILURE RESPONSE MATRIX │
├─────────────────────────────────────────────────────────────────────────┤
│ │
│ SCENARIO: Verification Subsystem Down (24 hours) │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ Impact: │ │
│ │ • No new production data processed │ │
│ │ • Issuance calculation uses last verified data │ │
│ │ • Settlement continues normally │ │
│ │ • Governance uses existing weights │ │
│ │ │ │
│ │ Response: │ │
│ │ • Alert to all participants │ │
│ │ • Provisional issuance at 90% of expected │ │
│ │ • True-up when verification restored │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
│ SCENARIO: Settlement Subsystem Down (4 hours) │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ Impact: │ │
│ │ • Transactions queued, not processed │ │
│ │ • Verification and Issuance continue │ │
│ │ • Governance continues │ │
│ │ │ │
│ │ Response: │ │
│ │ • Queue all transactions with timestamps │ │
│ │ • Process in order when restored │ │
│ │ • No K$ lost; delayed only │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
│ SCENARIO: Governance Subsystem Down (during vote) │
│ ┌──────────────────────────────────────────────────────────────────┐ │
│ │ Impact: │ │
│ │ • Votes cannot be submitted │ │
│ │ • Verification, Issuance, Settlement continue │ │
│ │ │ │
│ │ Response: │ │
│ │ • Extend voting deadline by downtime duration │ │
│ │ • Accept offline votes (signed, timestamped) │ │
│ │ • Process when restored │ │
│ └──────────────────────────────────────────────────────────────────┘ │
│ │
└─────────────────────────────────────────────────────────────────────────┘
Cascade Prevention
To prevent one failure from cascading:
| Mechanism | Purpose |
|---|---|
| Circuit breakers | Automatically isolate failing subsystem |
| Graceful degradation | Continue with reduced functionality |
| Data buffering | Queue events when downstream unavailable |
| Timeout handling | Don't wait forever for response |
| Fallback values | Use last known good data if current unavailable |
26.7 Integration Points
API Contracts
Each subsystem exposes APIs for integration:
VERIFICATION API
/v1/production/{entityId} GET verified production
/v1/production/{entityId}/history GET production history
/v1/attestation/{id} GET verification attestation
/v1/reconciliation/status GET current reconciliation status
ISSUANCE API
/v1/allocation/{entityId} GET current allocation
/v1/issuance/pending GET pending issuance queue
/v1/supply GET total K$ supply
/v1/redemption/{id} GET redemption status
SETTLEMENT API
/v1/accounts/{id}/balance GET account balance
/v1/transactions POST submit transaction
/v1/transactions/{id} GET transaction status
/v1/clearing/status GET clearing status
GOVERNANCE API
/v1/proposals GET active proposals
/v1/proposals/{id} GET proposal details
/v1/votes POST submit vote
/v1/weights/{entityId} GET voting weight
Internal Integration Bus
┌─────────────────────────────────────────────────────────────────────────┐
│ INTEGRATION BUS │
├─────────────────────────────────────────────────────────────────────────┤
│ │
│ ┌─────────────────────────┐ │
│ │ Event Bus │ │
│ │ (Kafka/Similar) │ │
│ └───────────┬─────────────┘ │
│ │ │
│ ┌─────────────────────┼─────────────────────┐ │
│ │ │ │ │
│ ▼ ▼ ▼ │
│ ┌───────────────┐ ┌───────────────┐ ┌───────────────┐ │
│ │ Verification │ │ Issuance │ │ Settlement │ │
│ │ Adapter │ │ Adapter │ │ Adapter │ │
│ └───────┬───────┘ └───────┬───────┘ └───────┬───────┘ │
│ │ │ │ │
│ ▼ ▼ ▼ │
│ ┌───────────────┐ ┌───────────────┐ ┌───────────────┐ │
│ │ Verification │ │ Issuance │ │ Settlement │ │
│ │ Subsystem │ │ Subsystem │ │ Subsystem │ │
│ └───────────────┘ └───────────────┘ └───────────────┘ │
│ │
│ Event Topics: │
│ • verification.production.verified │
│ • issuance.allocation.complete │
│ • settlement.transaction.settled │
│ • governance.proposal.approved │
│ • governance.weight.calculated │
│ │
└─────────────────────────────────────────────────────────────────────────┘
26.8 Key Takeaways
-
Four interdependent subsystems: Verification, Issuance, Settlement, and Governance form one integrated system.
-
Clear data flows: Production → Weight + Allocation → Balances → Transactions → Audit.
-
Critical dependencies: Verification must complete before issuance; governance must approve before policy.
-
Event-driven integration: Subsystems communicate through typed events on shared bus.
-
Failure isolation: Circuit breakers and graceful degradation prevent cascade failures.
-
Timing coordination: Different subsystems operate on different time scales with defined sync points.
-
API contracts: Each subsystem exposes clear APIs for integration and external access.
-
Blockchain as audit layer: Cross-cutting concern that all subsystems anchor to for public verification.
Further Reading
- Chapter 21 (E1): Technical Architecture — System overview
- Kleppmann, M. (2017). Designing Data-Intensive Applications — Integration patterns
- Hohpe, G. & Woolf, B. (2003). Enterprise Integration Patterns
End of Technical Implementation Stream (E)