# PEG - Chapter 1 — Problem Definition

1.1 Purpose

The #PEG Engine specifies a mechanism for the irrevocable allocation of contributed resources through publicly verifiable chance.

It defines the functional requirements, architectural principles and operational constraints necessary to implement such a mechanism independently of any particular deployment.

1.2 Observation

Human societies continuously allocate access to resources.

Throughout history, numerous allocation mechanisms have been developed, including markets, governments, inheritance, credit, lotteries and other institutional arrangements.

Although these mechanisms differ considerably, they share a common characteristic.

Someone—or something—must decide who receives access to resources, under what conditions, and according to which criteria.

That decision may be made by individuals, institutions, markets, algorithms or combinations thereof.

The decision-making process differs.

The existence of a decision-making process does not.

1.3 Design Objective

The objective of the #PEG Engine is to specify an alternative allocation mechanism in which contributed resources are allocated through publicly verifiable irrevocable chance rather than discretionary selection.

The Engine neither evaluates nor ranks participants.

It neither determines eligibility nor assesses deservingness.

Its sole purpose is to allocate contributed resources according to predetermined and irrevocable rules.

1.4 Scope

The #PEG Engine specifies the rules governing:

resource contribution;
draw creation;
participation;
randomness;
allocation;
settlement;
verification;
irrevocability.

The Engine does not specify:

resource production;
market formation;
banking;
payment systems;
monetary policy;
user interfaces;
distribution mechanisms;
deployment models;
regulatory frameworks.

These belong to higher implementation layers.

1.5 Design Principles

The #PEG Engine shall satisfy the following principles:
deterministic execution;
publicly verifiable randomness;
irrevocable allocation;
implementation independence;
minimal discretionary authority;
operational transparency;
composability.

All subsequent architectural decisions shall be derived from these principles.