Wed 6 Mar 2019 3:26PM

Coop's, Bonding Curves and TCRs

MS Michael Shea Public Seen by 48

I have been puzzling for a while on what is the appropriate token model for a Cooperative (not necessarily a DAO) organization. The Cooperative concept was first documented in 1842 by the Rochdale Society with the seven core principles. These principles orbit the central concept of one person/organization one vote, and that the cooperative operates for the benefit of its members with profit maximization not being a primary goal.

The Cooperative business model is a serious business model, with over $2.3T of revenue flowing through the top 300 Coop's globally in 2016.

I have been looking at Bonding Curves and TCRs to see if they meet the requirements from an incentivization perspective to stay aligned with a Coop and prevent hijacking, and to date have not been able to come to a definitive answer (either way).

I have been digging into this area on and off for the past 18 months, but am now approaching a situation where needing to come to an answer is coming close. So I put it to this illustrious group, any thoughts, idea's, resources, or research to share that would help come to a conclusion one way or the other?


Jeff Emmett Wed 6 Mar 2019 4:08PM

The combination of bonding curves and TCRs into a properly aligned Curation Market is indeed a promising area to explore in building sustainable cooperative/commonization efforts. I believe we can do better than one person/organization one vote, as this still leads to a tyranny of the majority and does not allow participants to signal the intensity of their preference. We are in the process of laying out a roadmap to build such a system, and will have lots of content coming out shortly exploring the system components involved. Stay tuned, more info to come shortly!


Josh Fairhead Wed 6 Mar 2019 7:13PM

"to see if they meet the requirements from an incentivization perspective to stay aligned with a Coop and prevent hijacking".

As a direct answer I'm not sure.

At current tokens are extrinsic motivators of monetary value; so I think at the moment they will work to a degree because most humans like chasing (abstracted) bounties due to our perceptions of value being generally limited to a short term medium of exchange... Fiat was created to be a carrot for every scenario! Tokens can replicate this behaviour(and probably to a more specialised degree)

That said you'll find the worst run businesses are targets based, because people game the target or suffer in trying to reach it (target is usually set higher than achievable for most people)... so I don't see tokens as suitable motivators.

However pooling resources to effect change and directly benefiting from such is a different game... we typically fund organisations in worse ways than that so funding and ownership is what TBC's are good for. From there things get a lot more complex because ownership implies some form of governance rights and we now have multiple stake holders. Moloch DAO addresses this by having you commit your stake back for funds that you'll use autonomously, but then you have to do something of worth with them to be let back in again. Its a minimum viable organisation in that regard, and to be honest if everyone is intrinsically motivated and aligned it's probably the best way to organise since we have to account for the preferences of other stake holders... but that wont be clear and they are probably biased.


Josh Fairhead Wed 6 Mar 2019 7:17PM

^ Opinion above. What kind of coop? Democratic control or Working members control or other? Given a cooperative blueprint, we could tokenise it for sure - but are't we looking for improvements? if so what problems do coops face that we want to alleviate?


Michael Shea Wed 13 Mar 2019 8:43PM

To further expand on the concept...

The model is an industry segment where there are potentially 1000's of participants, with varying stakeholder roles. For sake of discussion let's say 3 different roles. With the number of participants within the industry, it is possible to setup a network of sufficient node density to make it a public/permissioned or a pure permissioned network.

The true advantage or benefit of some sort of decentralized solution only comes by creating a commons where no one participant or stakeholder role can come to dominate or control the commons.

Assume that the actions performed on the commons are regulatory requirements driven, so the participants do not have a fear of being accused of collusion. The commons is for the benefit of its members only, and need to share information outside the industry (and regulators) is neither required or desired. (Trying to indicate that there is not really a need for general public access.)

The "nut" is how to fund the building of the commons, and ultimately operating and maintaining the commons.


Josh Fairhead Wed 13 Mar 2019 10:14PM

For sure, thats sounds like Moloch DAO as an example of the funding mechanism you're wondering about then, I'd suggest looking that one up.