The Sampo funding proposal is now live for conviction voting on Gardens:
https://gardens.1hive.org/#/xdai/garden/0x1fc7e8d8e4bbbef77a4d035aec189373b52125a8/proposal/25
2 Likes
Wanted to jump into this thread as I have been watching with some concern the financial unsustainability of TEC and wanted to share some thoughts:
-
As the TEC is built on Ostrom’s Principles, which are intended to foster long term sustainability of commonly held resources, my expectation is that Sampo aims will be driven by Ostrom’s guiding principles assessing TEC current strengths, weaknesses, opportunities and threats (SWOT) in setting forth TEC’s path towards a more sustainable fiscal footing.
-
Prior assumptions for sustainability need to be squarely addressed. The most ripe for review in my opinion are:
-
Ostrom Principle 1 – Working Group structure and funding in its current form is fit for purpose. We should not be beholden to the past, nor allow entrenched interests to distract from a clear future orientation. What grew organically on Discord and during the pre-Hatch may not be the optimal structure going forward. Focus should be on efficiency and effectiveness towards the token engineering mandate of TEC, including its need for sustainability.
-
Ostrom Principle 2 - There would be high volume on the ABC that would generate sufficient Common Pool funding. Need to have a Commons Pool sustainability strategy that takes into consideration the possibility of low volume trading of TEC.
-
Ostrom Principle 5 - Projected revenues and/or sustainability claims made in funding proposals are not accompanied by a reporting obligation, thus weakening the accountability mechanisms that would allow for a monitoring of the claims made to the TEC community at the time of funding request. The need for a clear and structured form for funding requests is becoming more apparent. This in my view should include key deliverables with monitoring and evaluation mechanisms built into project design.
-
Ostrom Principle 8 - TEC partners who request funding from the Commons Pool have zero or only soft obligations to return value to TEC. Consideration in sustainability strategy should look at nesting of fund recipients into TEC obligations. This could take the form of token equity or other more intangible commitments, as Digital Public Goods form both rights and responsibilities between duty bearers and rights holders.
-
-
Treasury management in any organization is something that would normally be within the purview of a Finance Department, and most large reputable organizations invest in highly liquid and low risk investments (i.e. commercial paper). Even in a more start-up context we should recognize that Token Engineering is highly distinct subject matter expertise from DeFi, so would caution against the optimism of financial wizardry to replenish Commons Pool unless we have a highly dedicated, competent, (and likely well compensated) DeFi team that could invest Common Pool funds responsibly into low risk / high return investments. However, as market conditions have shown even tokens that appear “stable” may have fatal design flaws, so any decision to move TEC funds into riskier assets should have the full buy-in by the community through a proper debate and vote
Hope the above are useful. Wanted to keep as brief as possible but more than happy to elaborate further on any of the points above.
6 Likes
@natesuits, I really resonate with key parts of what you’re saying in both of your comments.
We have our work cut out for us. This is a complex set of problems.
Spending is a huge challenge, but we are starting to make inroads here. One thing that came out of the stewards retrospective is distilling some community consensus on where the key investment priorities are.
As we discussed in the last Sampo call, one of our first projects will be developing a treasury policy and strategy that we put out to the community for a vote. One thing that is very clear to me is that the funds we use for yield farming could play a catalytic role in belt tightening, if that’s what we choose to do as part of this policy. Were we to take out, say, 300K xDAI from the Common Pool, we will have to choose whether to adjust the Conviction Voting parameters to simulate these invested funds still being there, or simply take them out and make it difficult to pass proposals much sooner than would otherwise be the case. This will be a critical decision, with TEC-wide impact. There are likely other options to consider here as well.
I disagree that token utility is the only way to generate funds for the Common Pool. That is how things are set up right now, but I think it would be a mistake to constrain ourselves in that way.
I see the Token Engineering Commons as a bunch of value-producing work units, sitting on top of a social platform that we all call a “community.” In our case, this community also manages its own micro-economy, much like a sovereign state. And when this community’s value-producing organs do things that create value, and we denominate access to that value in our token, then the utility of that token will go up. We have taxes in the form of tributes that drive funds into the Common Pool. But even just having the value (price) of the $TEC go up, in itself, is good for community stakeholders – a kind of sharing of the value generated from the community’s stewarding of the commons.
This isn’t to say, though, that this is the only channel for income. The working groups and our future TEC public goods (the "Token Engineering Schelling Point Services - TESPS) won’t just generate demand for $TEC; they can also charge for their services in some cases. That means revenue streams too. There are many, many ways of treating these streams. The community might allow a working group to retain all of its revenues and charge them a tax. In the case of more mature working groups with their own tokens, we might hold a sizeable share of the tokens. This might be true for ‘external’ projects that we fund as well (which is related to your point in your second comment). Right now, these are strictly grants, but unless we come up with an upstream funder (like becoming a regranting organization for the Ethereum Foundation, for example), that stream of grant funding will be hard to sustain, at least over the next few years. In some cases, we might design our “TESPS” to work like a protocol that requires $TEC in order to use them. One example are token-curated registries for curating TE knowledge.
These are complex questions. Some will require real token engineering modeling and design to make them work. Some won’t. But almost all are likely to require serious deliberation by the TEC’s various stakeholders.
Thanks for digging in on this topic. One of the blessings from this post has been the rich thinking coming from so many people. Like you, I am a big believer in the coming utility of the $TEC.
P.S. - we are going to need to make it M-U-C-H easier for people to acquire our token than it is today!
2 Likes
If it is about a commons, that would imply rethinking how an organisation creates value differently from our current paradigm, then I would agree with these guidelines:
-
Here’s a simple rule: only spend what you earn. That’s all.
-
If the rationale had been building a common participatory budget to maximize for efficiency/value of our Commons, we would be telling a very different story.
If it is about branding a commons into another form of techno-feudalism, then I would not grasp onto ascending while cultivating another bubble.
3 Likes
IMO this sudden crash of $TEC and the funds shortage is the best thing that could have happened to the CS/TEC Ecosystem. That its happening when there is a distinct possibility of the global economy sliding into a rcession, macabre as it may sound it only adds to the possibilities. However, since there is a sense of desperate urgency prevailing over this issue, let us focus on the immediate measures and then invite a discussion on the longer term strategy but only after a detailed SWOT analysis.
Looking at it realistically the amount of funding required in the short term say $75k looks trivial from a traditional finance/VC approach is concerned. Let us multiply it by 5X+ and set a target for $4 million and propose a path to getting it in 1 year and in the process, meet the short term requirements too.
There has to be an honest and transparent SWOT analysis done to pinpoint what exactly are the Strengths (they are huge), the Weaknesses (the initial design?) what are the Opportunities (they are also huge) to overcome the emerging Threats (the immediate one of a possible funds shortage).
On Strengths, in as much as Web3 is set to transform everything around us,everywhere, CS/TEC Ecosystem is actually leading from the front in as far as the creation of Public Goods. But from a Token Engineering standpoint, the ramifications are far greater and allow me to make a fairly radical case and additionally also draw from the experience of XPrize and Google X on how this can be tackled.
-
If any flow of value of value can be tokenised then the CS/TEC ecosystem represents a massive flow of value, all of which can be tokenised. From The TE Academy to Gravity to each and every nomination in the CS Prize. Once tokenised these initiatives can attract funding through innovative Token Engineering/Economic Design as explained below.
-
A short list of initiatives should be made, each framed against a much larger MTP ( Massively Transformative Purpose) and each having a Moonshot identified which if achieved releases the “exponentiality” of the initiative. Plus Milestones to the Moonshot. The strategy is to fund the Moonshots or Milestones as Challenges, within the scope of CS/TE. A crude exercise for the short listed nominations looked like this:
The funds being deployed are a miniscule portion of the total projects size. If the short listed projects have high economic returns, then the beneficiary community will be able to pay market interest rates (debt) or bear the risk ( tokens/equity) . (Watch/Read the Villagers Commons presentation/report on how self sufficiency in potable water could be achieved in a Kenyan village by just paying $0.04 cents per month per family for 3 years and in the process build a large corpus too for further deployment.)
- The short listed initiatives should have identifiable beneficiaries who are willing to underwrite the borrowings to implement the milestones. If initiatives with high Economic Returns are identified like GrassEco,Gravity and the rest, with decent Token Engineering/ Economic Design can translate into attractive Financial Returns and then Sustainable Returns via an appropriate token mechanism.
IN EACH SUCCESFUL FUNDING, CS/TEC CAN ALSO BE FUNDED The target is $4 million in 1 year.
What is critical here is good application of Token Engineering.
5 Likes
The advantage of this approach are :
- It exposes the real and truly massive potential of CS/TEC without compromising on any of CS/TEC objectives, if this approach is successful as one believes it can be, it will only enlarge the scope of TEC objectives, in the process kickstarting a virtous self reinforcing growth cycle.
- It starts from very small beginnings, making repeat failures/iterations affordable, almost guaranteeing success.
- It uses only the capital as outlined by @gideonro :Social, Expertise, Financial and Cultural.
- Once a milestone is achieved, interest grows around the initiative, drawing in more funding. The signalling effect can be HUGE
- Well designed, it will be reflected in the $TEC bonding curve itself, with renewed buying interest. Scale this for all possible initiatives, but start only with a few as defined above.
(There are far more nuances but there should be a detailed SWOT done immediately)
2 Likes
Token Utility is almost certainly the most powerful and versatile way to generate funds. And when viewed as funding Milestones the way I have indicated earlier, it is both feasible and critical, strategically, as accomplishing one Milestone effectively opens up the feasibility for many more and with focus, meet the impending time deadlines too.
Drawing from what is being attempted by Shermin Voshmgir now in the context of “Purposeful Tokens” by tokenising a farm using IOT devices, it is my contention a combo of Emerging Exponential Technologies + Tokenisation can reinterpret almost any problem.
*“where we investigate how to tokenize agricultural assets and sustainable ecosystem services such as soil quality or CO2 capture with the support of hardware wallets and sensor technology”*
Tokenising ANY value flow in the context of addressing some relevant problem to a community could be a MVP.
2 Likes
I would like to understand whether we are preparing to move away from “Commons as Public Goods” and into a strictly cashflow business 
as @akrtws and @trentmc0 seem to suggest. The experiment was twofold (a) dogfood the Augmented Bonding Curve (which btw is augmented by proposal mechanism - which as we know by now requires an upgrade to answer: What is the Public Good of Token Engineering?) (b) iteratively figure out how Commons-based peer production of TE knowledge can pay off for all stakeholders in token ecosystems (which is a huge vision, considering we aim also at TE Ethics all along).
So I would say that those who sell out now, are in this for the wrong reasons, and we need to make sure TEC Stewardship did their best to enable infomed participation, and have a way to improve getting better at it.
One thing we can contribute in TE Ethics Participatory Action Research is to create focus group around this.
Token Engineers have an hourly rate that is multiples of the rate of Stewards, e.g. if we want TEs to actually contribute to commons, we need to find better mechanisms then trying to cover “costs” from the commons pool.
Since the beginning, I’ve been contributing to TEC in a little “soft fork”, since the obvious defect that proposals are the value add mechanism to the Public Good of Commons, but have zero alignment with market realities of Token Engineering; that it will never pay off for Token Engineers to invest their time into the Commons at rates that are seen as costs, which are multiple lower than an hourly rate of a “junior TE” hopefully is not lost on any participant in this discussion.
So I am highly against “come up with revenues or die in 6 months” nor “Ostroms principles to the rescue” - but currently working on the market equally lost on a short term solution: other than appealing to TEC holders and Token Engineers to pick up the slack, and let us come up with true innovation.
We know how to make money - we do not know how to collaborate in markets on steroids, which this crypto revolution is. if $TEC holders sell off now, I hope sufficient TE learners and experienced TEs buy the dip- which brings me to the next obvious issue of liquidity, imv more pressing than “coming up with emergency revenue plan” → which would be giving up on Commons.
That pivot MUST be made super clear, so people know whether they are participating in making new ground or just another token project.
TEC has been this big quest:
We still have no way to EARN $TEC, it can only minted by throwing money at a bonding curve. We need to take seriously what we are Augmenting that Bonding Curve with. There are some proposals that obviously add value to the Commons by creating Common Good (and Resources): more of those and we need to start using our Commons token, similar to “buyback & build” mech used elsewhere etc.
So the whole revenue discussion, if not take from a tokenomics perspective and analyzing the ABC, specificall what do we augment it with and how does that help create utility and liquidity for TEC.
and we need more pracicing TE participants! i.e. we need to solve for market rates issue, which again could be TEC holders staking on other TEs to incentivize them to take time off markets and other projects and do some seriuous, professional level, i.e. concentrated community service to the TE Commons.
Since we are always short on TEs even in projects that pay market rates, this bootstrapping needs to happen through Learning/Mentoring, e.g. through TE Academy, and supporting operational TE organizations and guilds to actually train on the job etc. etc.
These are things we have been discussing since the beginning and now see unfolding. So I do not see the need to panic, but the need for a thorough analysis, and short term: TE/TEC holders finding ways to mentor and incentivize usage of TEC through staking on TE learners literally.
What is immense value in TEC which we didn’t have in the TE community, is the value of soft governance and living steward ownership - that too will be tested, but I trust that we have Stewards who will ride through this and make necessary adjustments. The point is if public goods are always underfunded, and we’re just giving up without putting a fightingly revolutionary mechanism.
If TEC holders want to see quarterly returns on invest on a public knowledge commons, then they have beend participating in the wrong game, misinformed, we need to improve on that too: Informed participation.
Short-term it is up to practicing TE TEC holders now to pick up the slack and get creative with their TEC holdings and their experience , i.e. what is in their control: to create and add value to the TE Commons now.
4 Likes
short-term, this can be agreed upon rather quickly: proposals that get funding through TE Commons - and have revenues - share a portion of that or better yet buyback $TEC and build (e.g. distribute to builders/learners of TE knowledge) ; we could leave it open as to see what percentages settle as a norm across the various proposals.
but then again: what about truly open source TE public good? I have at least two people who shared that TE Academy changed the course of their lives because it offered free knowledge and courses. Are we giving up on our vision, just because (who? how many?) $TEC holders sell out now? Did we analyze who (which stakeholder group) and why? etc ← that is the focus group and analysis we can help with from TEC#0mega TE Ethics Participatory Action research @Felixfalafel @lydia I don’t know if it is directly helping, but definitely could help with more informed decisions and pave the wave to innovate on how to “competitively” fund collaborative knowledge commons and public good.
4 Likes
interesting totally agree with this - however, the “survival” tone before reminded me of Finding a Way. Will Peoples’ Responses to the… | by Nora Bateson | Medium (and of course the “cost cutting” tone reminded me of well corporates and their consultants unhealthy symbioses)
again people/orgs with active/passed proposals and revenue/potential (buyback $TEC and carry on building TE knowledge commons), as well as experienced TEs and TEC holders have a lot of permissionless participation potential outside of this proposal or even the ABC: use $TEC
2 Likes
I’d just like to say that I am quite impressed by all of the thorough and well thought out responses. I’ve never seen a thread with this many high quality contributions before.
Also, I do support this proposal.
2 Likes
Let us create, fund and back our own “market maker” which will attempt maintaining price stability of $TEC at an affordable cost - which if done properly could itself be a profitable, but we factor in it as a cost. All believers in the Common Stack and TEC initiative could back this initiative with some $TEC/$BTC/$ETH/$DAI or other liquid assets. They will not be offered security.
The reasons I believe this could be a profitable initiative over the medium term are:
- The market will turn around at some point of time, we will be able to hold out till then
- The Economic Value add of Public Good initiatives are extremely high and innovative Token Engineering can convert this into Financial Viability
- When indicated as individual initiatives say Giveth or Consilience Library (yes) and these are being cited as examples with definite possibilities.
- Trusted Seeds have the ability to re parametrise the Bonding Curve to be able to accept these possibilities
- The signalling effect of a redesigned eco system and bonding curve and the projects within the ecosystem will be massive via a) the portfolio effect b) hedging opportunity but pulled down a bit by the c) conglomerate effect.
- CS/TE has the expertise to model this with say support from Blockscience Labs
- The expertise gained from this could be applied for all the tokenised initiatives emerging out of CS/TEC ecosystem
(Apologies for using technical jargon here. If you cannot google for an explanation, I can explain in detail)
1 Like
“The also serve who stand and wait” John Milton’s On his Blindness / Paradise Regained
Yet create Paradise we will, which is what the larger vision of this initiative is all about. Everyone within the CS/TEC ecosystem is an increasingly valuable contributor, we identify each one by an SBT(Soul Bound Token) and this becomes our most powerful resource to incentivise.
The added dimension which SBTs enables especially on the “softer” side reinforces the proposition “everything of value” can be tokenised, including cultural attributes which after tokenisation, their importance recognised aptly (@Liviade ). When there is a path for every entity, every individual, group to contribute and their value recognised, not just via the Praise system (can Praise adopt SBTs?) -its a huge step towards the actual realisation of the latent value within this eco system. There could even emerge domain based parallels to $TEC and cross holdings by individuals and entities, all contributing to the value of $TEC and everyone within the ecosystem.
Ultimately we are creating a model for bootstrapping the whole global economy, because if we say everything of value can be tokenised and CS/TEC has the tools, then this is an opportunity for it to seize. Whatever is feasible ethically and set an example.
Let us start small. As small as possible. The vision is large enough ( does not extend to Mars as yet, once utlisable wormholes are found, we could look at other opportunities there ). Yes, this can be fun and fruitful. But I sincerely hope @Gideonro and team can pick up the strings, there are many who of us who are ready to pitch in. This an initiative which has to succeed, the timing is right, let us seize it.
1 Like
Agree with both. I’ll add that the TEC is also showing externally the symptoms of the not-so -healthy symbiosis of the stewardship policies and the unclearly defined nature of what the Commons of the TEC is.
3 Likes
TE Academy as the hub of education is not the centre of all knowledge - especially the tacit and practical knowledge essential for accomplishing projects, which is always intrinsically local within specific communities within the TEC ecosystem.(Hayek) . The potential for TE Academy is large but all the others communities put together, they have an even larger potential, for creating utility to various communities. This is a challenge I am ready to back fully.
Completely disagree with the notion “of any hope of creating utility for the TEC token.” . TEC as a young discipline, we have to be alive and responsive to emerging new possibilities and the most fundamental one is the understanding that any flow of value, can be tokenised to the benefit of some community. These communities within the TEC Ecosystem only needed to be educated how their true potential could be realised: with innovative Tokenomics/ Token Engineering. Honestly, Wouldn’t looking after our family members, each community in this context, be our foremost priority for everyone, especially the powerful, the more well endowed, the knowledge holders?
Put every community on an even keel and in the process contribute to CS/TEC.
1 Like
The elders, should settle this and continue to guide this community, young, brimming with potential, not forgetting, with tokenisation, each contributing community within the ecosystem has the potential to be viable on their own, with a wee bit of support.
1 Like
I’m late to this convo … has anyone done a root-cause analysis?
a) What was initially promised,
b) where was the divergence between expectation and reality
c) who is accountable for the gap (and this I mean responsibility + powers to fix otherwise it turns into scapegoat exercise later)
Having been a mentor at JFDI (Singapore’s premiere accelerator), unlike academia, the school of hard knocks is where you get given the test before the lesson plan. Even 2 years ago I could see incredible potential for intangible property (eg the TEbook) but it does require some skullsweat to monetarise. You’re probably slogging through the trough of sorrows right now so be reassured, things will get worse ;-D
If this is the consensus, then doable but returns will follow a Megrez type outcome (slow in beginning, snowballing, then saturation). There are 3 issues (from an ROI point of view) #advice-process
- historically education is seen as a public good with taxes to subsidise the (hopefully) higher cognitive output. Works OK with professions such as law (cough … I acknowlede turning to the dark side of IP from academia so mea culpa) but less so with nascent industries
-
competing with private entities … and I refer to hackathons, community grants, any DAO with dumb money which are throwing funny money (OK but at least convertible to fiat) to attract attention. Having gone through 2 TEA courses, I can attest to their quality but it is a medium-term investment in my knowledge, not an immediate skill leading to a consulting gig (as in case with other training).
-
alas academies are incredible upfront investments in time, talent and tasking. Fortunately no real-estate capital costs but putting resources into the material means insufficient in marketing leading to inability to compete with 2.
Outside of the TE Academy, there is no other proposal that has provided public awareness to the TEC or any hope of creating utility for the TEC token. While I would like to fund the development of any and all TE proposals that are placed in our path, we just can’t at this moment.
Drucker (management guru) once said there’s only 2 important tasks for a firm … innovation and marketing. No shortage of brains coming up with ideas. But if TEacademy is a time-sink, marketing it more will only accelerate burn-out. You need to break this downward spiral.
Treasury today $713K, 10% APY → $71K
Treasury in 6 months, based on the monthly burn rate so far $120K, 10% APY → $12K
Hmmmm … $100k/month ~$1.2M /year about average burn for a double-pizza startup (numbers upon request) but I don’t know the outputs/milestones.
Ummm … VCs have the mental attitude of double or nothing loonshots … the doubling sounds good to their passive funders but the zero sucks for portfolio company. Not convinced it is a good path to imitate but in absence of taxes, need a 3rd way.
@Solsista can you show us your maths on how to stake on TE learners? There are models out their which bet on people getting jobs and taking a % of salary but there’s been flack & pushback in that area (admittedly due to overpromising on the job front)
And to inject a little ((darkish) humor into the topic
Ode To Protector of Mathematicians
Ol’ T.E. Hubert
Went to the cupboard
To give a’cad-em-my a grant;
When they came there,
The cupboard was scant,And so the poor school went bare.
1 Like
here’s the mechanism - maths free, and can be experimented with immediately, only requires proposals to take & distribute $TEC meaningfully and it requires $TEC holders to let go of a portion of $TEC - in return for meaningful distribution: via value add , and likely reflection of that value in the price of $TEC.
For profit services and orgs, especially if they get funds partially from the Common Pool, should accept $TEC - this is a honor system, at least in the beginning - but one that will makes sense, especially for TE Commons, which is potentially a high-value, high-demand, yet niche token economy.
4 Likes
This does need a bit of clarification. First what was proposed was not a “portfolio management” mechanism but a “funding strategy”, which I explained in other posts in the same thread and also in discussions in some research groups here. Its a question of “framing” in the XPrize/GoogleX framework, which is best expressed in this image.
- Every value generating activity could be funded independently. The ideas within each when framed correctly, there is a Moonshot which when achived releases the exponentiality of the initiative.
- Each milestone could be funded, iteratively and it becomes highly affordable reducing the risk for the investor and investee.
- This is possible for each value generating activity within the TEC ecosystem. Each and every one ( take Gravity and Praise) has the potential to generate funding independently. This is the beauty of crypto funding -the granularity and liquidity possible.
What is the global potential for Gravity and Praise? What is the exponentiality releasing Moonshot within each of them? Is it some app which needs to be developed? Some threshold scale? What are the milestones to achieving these Moonshots. A wild guess for each, both Gravity and Praise, conservatively would be $500 million each, of which the accessible market could be say $10 million. Will $1 million be sufficient to develop the app or achieve that scale. Experiment, tweak, the figures to arrive at realistic estimates. Which are the milestones which needs to be funded?
Framed this way, looking at the whole TEC ecosystem raising even $5 million seems trivial provided we are able to hit the Milestones iteratively
( For X Prize, the Massively Transformative Purpose of opening up space got catalysed by achieveing the Moonshot of creating a reusable rocket through a $10 million global challenge by the Ansari Foundation)
This approach can tackle TEC’s immediate funding needs. But the root cause lies elsewhere, which I can explain in the next post. It involves our PAM - primary Market maker AKA the Augmented Bonding Curve which created the $TEC. It is explained in the The Commoners Strategy which proposes the introduction of an additional utility token $TECKY.
A successful $TEC could drive up price like Bitcoin making it impractical for transactions/ $TECKY, the utility token could address that issue apart from EVERYTHING else. Please feel free to modify edit and comment on the document.