The global economy is grotesquely misaligned, allocating $2.72 trillion annually to military spending while just $67.5 billion is directed toward medical research—a 40:1 disparity. This document provides the quantitative thesis for a strategic investment of $1.2–$2.5 billion to permanently flip this incentive structure.
The goal is to redirect a $27+ billion annual revenue stream from military budgets to a democratically controlled health treasury. The investment vehicle, VICTORY Bonds, is engineered to offer a risk-adjusted expected value superior to the world's most elite investment funds. We are specifically targeting a return that outperforms the historical net returns of Renaissance Technologies' Medallion Fund (~39% annualized), making this the most compelling investment opportunity in the world.
A rational investor allocates capital where returns are highest. While top defense contractors offer stable ~12-15% annualized returns, this is not the true benchmark for ambitious capital. The undisputed benchmark for scaled, high-performance investing is the Renaissance Medallion Fund, with its legendary ~39% net annualized return over 30 years.
Our thesis is not to be merely competitive, but to be mathematically superior.
Our ability to deliver a return superior to the Medallion Fund is built on a transparent, principled payout model, backed by our unique structural advantages.
The Two Core Principles:
These rules ensure a fair balance between rewarding investors and fulfilling our mission, as detailed in our Dynamic Cash Flow Model.
Our Unique Advantages:
A. Unprecedented Financial Leverage:
B. "Governance Alpha": The Uncapped Multiplier
Beyond cash returns, VICTORY instruments grant investors governance rights over the $27 billion annual DIH treasury. This is a unique source of value, "Governance Alpha," that has no equivalent. The economic value of this control—the ability to:
Our Dynamic Cash Flow Model shows how these principles work in practice. Even in a conservative partial success scenario (e.g., $13B annual income), the model is designed to deliver world-class returns (~26x over 10 years).
In a full success scenario ($27B annual income), we can comfortably deliver on our target of ~40% CAGR (~28x over 10 years). This is achieved by combining the base cash yield with performance-based kickers and the immense underlying value of Governance Alpha. By combining these unique advantages, we can structure an offering that provides a risk-adjusted expected value demonstrably superior to any other investment in the world.
The financial models in this document are based on the initial, conservative figure of a $27 billion annual treasury. However, the long-term vision is to incrementally increase this redirection percentage over time. This means the DIH treasury is designed to grow, making governance rights (VICTORY bonds) an asset with the potential for multi-generational value appreciation. For a detailed explanation of this long-term strategy, see The Endgame: A Multi-Generational Strategy to Phase Out War.
A primary objection from sophisticated investors is the difficulty of quantifying political risk. The 70% success probability cited on the landing page is a static estimate. To solve this, we will implement a dynamic, transparent risk modeling system.
Mechanism: A Public Prediction Market (Metaculus Model)
Example Application:
This turns unquantifiable political risk into a transparent, tradable metric, allowing investors to price their capital allocation accurately.
The ultimate test for a sophisticated investor is whether this opportunity provides a better risk-adjusted return than the most legendary quantitative hedge fund in history.
The Benchmark:
Renaissance Medallion Fund (Hypothetical Investment):
VICTORY Bond Investment (Early, High-Risk Tranche):
Calculating Expected Value:
EV = (Probability of Success * Upside) + (Probability of Failure * Downside)EV (Bond Yield Only) = (0.70 * $14,000,000) + (0.30 * $0) = $9,800,000To be the world's best investment, the Risk-Adjusted Expected Value (EV_victory) must exceed the benchmark (EV_benchmark).
The formula is:
[ (P_{\text{success}} \times V_{\text{upside}}) + (P_{\text{failure}} \times V_{\text{downside}}) > V_{\text{initial}} \times (1 + R_{\text{benchmark}}) ]
1. Calculate the Benchmark's Expected Value:
An investor putting $10M into the Medallion Fund expects a value of:
[ EV_{\text{benchmark}} = $10,000,000 \times (1 + 0.39) = \mathbf{$13,900,000} ]
2. Solve for the Required Upside Value (V_upside):
Using our 70% success probability, we must deliver an upside value greater than the benchmark's EV:
[ (0.70 \times V_{\text{upside}}) + (0.30 \times $0) > $13,900,000 ]
[ V_{\text{upside}} > \frac{$13,900,000}{0.70} ]
[ V_{\text{upside}} > \mathbf{$19,857,143} ]
3. Calculate the Required ROI:
This means the net profit in a success scenario must be $9,857,143. The required ROI is therefore:
[ \text{ROI}_{\text{needed}} = \left( \frac{$19,857,143 - $10,000,000}{$10,000,000} \right) \times 100 = \mathbf{98.57%} ]
This calculation proves that to be statistically superior to the world's best fund, our success scenario must deliver a return of nearly 100%. A simple bond yield cannot achieve this.
Making it Competitive: The Governance Token Alpha
The bond yield alone does not beat the Medallion benchmark. The critical factor is the governance power over the $27B annual treasury. This is the ultimate source of alpha for our investors.
Unlike any other fund, our investors are buying control of a perpetual, multi-billion-dollar capital allocation engine. The financial value of this governance—to direct research, fund companies, and shape the future of global health—is an uncapped upside with no equivalent in traditional finance. It is this "Governance Token Alpha" that is designed to deliver the ~99%+ ROI required for outperformance.
Our Target: We will structure the tranches of VICTORY bonds and their associated governance token allocations to ensure that the total risk-adjusted expected value for early investors is at least 1% higher than the Medallion Fund's 39% net annualized return. This is the core financial promise of the project.
Conclusion: By structuring returns with success multipliers and the unprecedented value of treasury governance, the risk-adjusted expected value of an early investment in VICTORY Bonds is designed to be mathematically superior to the returns of even the most elite hedge funds.
VICTORY Bonds are designed to deliver risk-adjusted returns superior to alternative investments by harnessing the extraordinary ROI dynamics of lobbying seen in fossil fuel and military industries—while redirecting them toward positive health outcomes.
These returns arise from influencing policy to capture public funds, creating stable revenue streams backed by government budgets.
We adapt this model for positive impact: VICTORY Bonds fund a reallocation of 1% of global military spending ($27+ billion annually) to health via the 1% Treaty. This enables:
By leveraging policy influence for societal benefit, VICTORY Bonds are structured to offer returns superior to alternative investments in high-ROI sectors.
Under the proposed Impact Securities framework, we present return objectives as targets, not guarantees:
The financial returns for VICTORY instruments are sourced from the $27B annual treasury. However, the ultimate economic underpinning of this investment is the $16.5 trillion annual Peace Dividend unlocked by the treaty. This represents the total value reclaimed from conflict, with over 99% flowing to global society. For a detailed breakdown of this value capture model, see The Peace Dividend: Value Capture & Distribution Model.
Fossil Fuel Lobbying ROI
"The fossil fuel industry spends millions on lobbying and gets billions in subsidies – an ROI of over 800%."
— The Guardian, 2021, Fossil fuel lobbying ROI
Military Lobbying Returns
"For every dollar spent on lobbying, defense contractors receive over $100 in contracts."
— Watson Institute, Brown University, 2022, Profits of War
While the VICTORY Bonds model draws on historical precedents like World War II War Bonds and proven lobbying ROI dynamics, its success involves significant uncertainties. This section provides a balanced view, including phased repayment and risk mitigations.
Repayment is tied to 1% Treaty inflows rather than fixed dates, as detailed in VICTORY Bonds Incentive Mechanics:
While the risks of this venture are significant, they are fundamentally different from those of a traditional startup. We have engineered several specific mechanisms to mitigate them. For a complete comparative analysis, see the full Investor Risk Analysis.
For full details on protections, see VICTORY Bonds Incentive Mechanics.
War Bonds Historical Raise
"U.S. War Bonds during WWII raised approximately $185 billion (nominal), equivalent to over $3 trillion today."
— U.S. Treasury Department, History of Savings Bonds
Lobbying ROI Feasibility
"Policy-influenced investments can yield high ROIs when backed by public mandates."
— Watson Institute, Brown University, 2022, Profits of War
Philanthropic funds can achieve extraordinary impact multiplication through VICTORY Bonds, leveraging advocacy to redirect public budgets at scales far beyond direct grants.
"Top charities like AMF provide ~10X return in lives saved per dollar compared to cash transfers."
— GiveWell, 2023, Cost-Effectiveness
VICTORY Bonds are uniquely positioned to target defense contractors as primary investors. By offering superior risk-adjusted returns (as modeled above), we incentivize them to repurpose their lobbying networks to support the 1% Treaty—turning potential adversaries into allies.
We have 85-90% confidence this co-opting approach is superior to adversarial strategies, based on game theory and precedents. For full analysis, see Co-Opting Defense Contractors.
Top 5 Military Contractor Revenue
"Between 2020 and 2024, the U.S. Department of Defense allocated approximately $771 billion in contracts to the top five military contractors: Lockheed Martin, RTX (formerly Raytheon), Boeing, General Dynamics, and Northrop Grumman."
— Watson Institute, Brown University, 2025, Military Contractors Report
Lockheed Martin 2023 Revenue
"In 2023, Lockheed Martin earned $70.8 billion from government contracts, accounting for 9.19% of total federal contract dollars."
— Wikipedia, 2024, Top 100 Contractors of the U.S. federal government
Johnson & Johnson 2023 Financials
"Johnson & Johnson reported revenues of $94.9 billion and a net income of $20.9 billion in 2023, resulting in a profit margin of about 22%."
— Johnson & Johnson, 2024, Investor Relations
Investment Return Comparison
"Over the past five years, the average annual return for major defense contractors has been approximately 8%, while leading healthcare companies have yielded average annual returns of around 12%."
— Forbes, 2024, Healthcare Stocks Poised for a Rebound
Private Equity Military Sector Returns
"Top-quartile private equity funds focused on the aerospace and defense sector often target an internal rate of return (IRR) of 20-30% for their investors."
— PitchBook & Industry Analysis, 2024
Top Performing Private Equity & Hedge Funds
"Top-performing private equity funds, such as Spectrum's VIII-A Program, have achieved net IRRs as high as 98.91% for a single vintage year (2017)."
— Alternatives Investor, 2021, Top Performing Private Equity Funds
"Renaissance Technologies' Medallion Fund is famed for achieving an average annualized gross return of ~66%, and a net return of ~39%, from 1988 to 2021."
— Traders' Log, 2023, Top Hedge Funds