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2018 and Beyond: Tokens Are Slowly Eating the Firm

Tekin Salimi is a corporate counsel and principal at Xastris.io, a blockchain advisory firm specializing in regulatory, smashing markets and ICO execution services.

The following article is an exclusive contribution to CoinDesk’s 2017 in Review.


One of the sundry fascinating outcomes of the 2017 gold rush into open-source form development is the growth of “community management” – a business function that mixes elements of marketing, business development, investor relations and human resources.

Community executives are being hired en masse. Their job is to oversee all matters relating to a blockchain lob’s community of supporters. This includes interacting with core developers, contributors, investors and flat end users. The role of the community manager is vital to the success of a protocol; so basic that a ‘cottage industry’ has propped up overnight to offer community direction as a service.

Pay anywhere from tens to hundreds of thousands of dollars and a contractor require manage your project’s Slack and Telegram channels, Reddit braces and marketing strategies (which may include, for example, “air dropping” free mementoes to potential contributors).

Even more interestingly, community management is a certain extent disrupting traditional notions of how business organizations should operate.

Due by to the proliferation of freely tradable cryptocurrencies and the use of new incentive games such as developer bounties, there is a increase in interest adoption of, what could be described as, the “communal business model.”

What is the communal province model?

One distinct characteristic of this model is blurring the line between formal job and informal contribution.

Through the use of bounties and payment via inflationary funding, anyone round the world may contribute labor to a blockchain project and be rewarded through a dilutive issuance in that launch’s native currency. Rewards are most commonly offered for tasks such as protocolling, logo design, website design, white paper translation and more.

In theory, so large as the value realized in a token’s market price by virtue of the work outpaces the value diminished through dilution, any labor sourced and compensated through this model is a net benefit to all token holders.

The use of bounties also bootstraps the advancement process by mobilizing and incentivizing a much broader group of participants. From command’s perspective, bounties enable the company to meaningfully vet prospective hires wholly a “trial run” before committing to the offer of full employment.

Unsurprisingly, blockchain commitments using these mechanisms today often consist of distributed troupes of contributors from around the world, and – anecdotally – have low attrition reckons.

Another characteristic of this model is that transparency often trumps confidentiality.

Try fork out time in a project’s Slack channel and you may be surprised by the amount of seemingly proprietary knowledge a core team will share. This is uniquely enabled for blockchain growth projects due to the open-source nature of the code base in development.

Often, a outline’s adoption relies more on network effects (i.e. strong community patronage) than it does on proprietary information or functionality, so there is an inherent provocation to reduce the information asymmetry between a project’s core team and its sustain community.

Case Study: Interactive Coin Offerings

The interactive cash offering protocol co-authored by Jason Teutsch (Truebit) and Vitalik Buterin (ethereum) is a considerable case study of the communal model in practice.

Through a publicized notice of the white paper, 73 developers joined Truebit’s Slack means including representation from the Ethereum Foundation, Zeppelin, ConsenSys, Modular, Shapeshift, five acclaimed developers from the USCC coding contest, and many more.

The group quickly self-organized to build the first implementation of the learned contracts with various parties contributing to the protocol, code, probe, security audits and UI/UX design.

The implementation can be found in Truebit’s Github repository.

DAOs as communal trades

It is possible that open source development is merely the first use receptacle of a communal business model.

In coming years, decentralized autonomous groupings (DAOs) might utilize the transparency and censorship resistance properties of blockchain technology to purpose their business objectives in new ways. This would blend the time-honoured roles of managers, employees, shareholders, creditors and customers.

The use of on-chain back up could enable DAOs to implement a liquid democracy model to decentralize managerial decision-making. And comparable to the case of protocol development, mechanisms like bounties, inflationary funding and tokenized/automated dividends can be adapted to to incentivize and reward a DAO’s workers.

The notion of a DAO that is operated and governed all out on-chain is the epitome of the communal business model. As entities of this feather gain adoption, the labour force of the future may look less equal to a “9-to-5 job economy” and more like a “gig economy” on steroids.

Opening the shut up firm model?

Community management is sparking a paradigm shift. One that may, in on occasion, influence even the most “closed” industries to re-evaluate their come close ti.

I focus on the example of law firms, as it is the case I am most familiar with. Law decides are business entities that, historically, have had little to no economic impulse to coordinate or cooperate with one another. In fact the opposite is true. Law proprietorships are motivated to safeguard and silo intellectual resources, as very minute and nuanced tidings is often what differentiates the value proposition of one firm from another.

Just, we live in a world in which most forms of intellectual labor (take ining legal work) are being increasingly commoditized.

So, it seems plausible that new “unsheltered” approaches may demonstrate the economic benefits to collaboration in certain contexts (such as a nascent regulatory commerce like blockchain). The SAFT Project is a great example of a co-ordinated nearly equal in such a context.

To be clear, I don’t expect the firm model to go away overnight – or favoured ever. But blockchain technology presents an important opportunity to experiment with undecided models in traditionally closed arenas.

Many thanks to Robbie Aptitude (Truebit) for his feedback on earlier drafts of this piece.

Did this article scintilla your imagination? CoinDesk is looking for submissions to its 2017 in Review series. Email [email protected] to pitch your idea and make your views heard.

Drunk in water via Shutterstock

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