I like doing non-profit stuff. Not because I don’t like profit, it’s a mathematical function of net-positive expectancy on human (or algo) activity, and I would starve without it. But “non-profit” really just means, no net-profit squeezed out on an indefinite basis to a few winners, you can still be non-profit if you do things that return a gross profit, which is summarily eaten in expenses.
You can also reinvest in expanding something as the top financial priority. The closest we see to that in for-profit corporations is Amazon, and it’s working for them. Why not for the crypto-finance revolution?
A decentralized autonomous organization (DAO) that is all about impact maximization… that could be interesting right? It’s like the prototype for the race of benevolent robots we’ve always wanted.
The Omni Foundation is legally a non-profit, and not a DAO, but we have pre-defined charter going back to the original crowdsale 2 years ago, and it mandates that the distribution of wealth be determined through voting eventually.
We are managing the liquidity operations of the Foundation’s assets, which as of now is predominantly OMNI, with the goal of reinvesting all capital traded into the ecosystem. This means bids for OMNI in various currencies. This means promotional expenses. This means helping start very human organizations in places where this technology is needed most, parking capital in decentralized banking, producing a monthly income, creating some jobs that seek out customers, and growing that capital as it is traded with that population for remittances, noding SMS transactions, merchant payment processing, building networks of cash-out agents, importing BitSims so feature phone owners can get hardware-level security, and finally organizing with farmers to underwrite securities backed by land and then with general small businesses to float secured and unsecured notes.
Finally when you’ve got a merchant class plugged into global investments, hedging markets and trade channels (“channels” meaning they can cold-email int. importers) fed by a base of farmers who are able to optimize their land’s productivity, luxuries like paying fees for electricity and mesh-net wi-fi is a broad business, which can be then capitalized by securities offerings for solar panel networks and mesh networks, $300 a node here, $700 a house there, communities participate in owning their infrastructure, foreign investors see a yield from the electronically paid fees… we’re talking about developed economies at this point. Everyone will be able to get a degree from the Kahn Academy for the cost of their time.
I believe in this so much I gave up lucrative opportunities to do arbitrage on a for-profit basis, to fuel the liquidity in the Dex and the eventual mission of the Foundation. It’s a way to grow capital with a 2% annual tax on investment income, and since my goals with capital predominantly involve doing things over having things, it seemed like the best way forward.
On a decentralized exchange of freely-issued smart properties, you can litter your list of markets with any random coin someone wants to put out. We might as well crowd our bazaar with the undocumented value of the global south, because that’s where the economic growth is going to come from in this world, and those people being able to get liquidity is the key to accelerating that process.
In the 2020s, more money creation will come from mutual credit networks than bank lending. Bernard Leiter and Stephen Belgin are big fans of mutual credit, read their book! They were involved in making the Euro but have repented. The intermediate term goal is to have enough success in capitalizing the base (both in terms of Dex volumes/issuances and cash flow break-even or better organizations we have endowed) that it makes sense to bring those guys in more actively and start coordinating with better-capitalized Charitable Trusts/Impact Funds.
We are beginning a step towards this goal of having bajillions of securities, notes, mutual credits and commodity currencies on the decentralized exchange, by working with the Sierra Leone Liberty Group. I’ve been coaching Mustapha Cole on lean start-up, they went out and surveyed import/export business people in Freetown, we’re using the data and a video to raise them $10k. A chunk of that we can endow OMNI for, credited at the average dollar value of the preceeding month. I am partnering with Dr. Charles Evans of the Conscious Entrepreneurship Foundation (501c) so that the Impact Bond offering is tax deductible for Corporations or Schedule C filers.
That money will be dBanked in a simple way (i.e. not as a dApp, they will have BTC inventory, a hedge position that is algo-managed, some of it in deposits on a verified Bitfinex account, multisig and human trustees will be involved) and chunks of the principal will only be released when there is a counterparty to trade BTC or Tether with. The OMNI position we endow will become activated as yielding, decentralized USD tokens at whatever dollar price it’s worth after we roll that capability out.
Adam Levine called me out for mentioning this direction and my oh-so-pure intentions, because (paraphrasing him) everyone in this business talks about doing something Africa and its broadly disingenuous. I agree, it’s like a prayer bead for the NPR crowd, costs nothing to say “Africa” but it takes a few hours time to study all 54 countries on the continent, how many people who name-drop a continent know all its constituents? I’m glad he mentioned that, because it gave me a chance to mention how International Development has failed and we’re students here, trying to take it up a notch, with automated accounting, verifiable business models, and from that, the notion of Impact Dollars yielded from Impact Bonds, which measure economic activity made possible by the capital.
Now, it’s ludicrous to imagine that a bunch of geeks can fly in, pass out crates full of iPads and solve economic, cultural, medical ect. problems that people face which prevents them from reaching the comfortable, coffee and cookies coding mentality we enjoy in the West. Neither am I blind to the numerous lessons from both failures in international development that have wasted money on underused tech or distorted local economies, and failures in quantitative finance which created extreme volatility at least once a decade for the last 40 years. Knowing what I don’t know also makes me aware that I am not the smartest person I know, and attempting these ambitious tasks may yield failure just due to me not being smart enough. But there’s one thing I know for sure:
Quantifying transaction data from System D is going to be insanely useful.
We’re talking about the majority of the world’s economic growth for the next 10 years coming from people who will be, for the first time, doing business more efficiently than on a 100% cash basis.
That’s why will be publishing bounties to develop a “kit” for social entrepreneurs to get all the finance rowed out and make admin and growth management easy. Before those bounties can even be defined, we need to stumble with Mustapha a bit. We need to see how it’s different in Botswana, or in the Villas of Buenos Aires. We need the early data to make a guess as to how to frame the data of the next 5 years. Baby steps.
The ultimate goal of the Omni Foundation is to have a giant cloud of money whizzing through the decentralized exchange over Bitcoin, made up of futures bets, spot trades for different securites and app coins, and dBanking yield payments/hedge-rolls. That will make OMNI worth a lot of money as the fee recipient and as a collateral base. We’re looking at growing our supply of OMNI in trading so as we go up orders of magnitude in capitalization, we can begin to yield a larger budget from hedging with futures premium but without ever liquidating. The more budget we get from the system, the more we top-up our endowed organizations to help them scale, endow more organizations, and if we get really high priced we’ll start basic income projects.
OMNI holders will, at some yet-defined point, begin being able to participate in referendums about how we spend the budget.
Let’s say after the annualized yield from the assets exceeds $100,000 USD a year.
All of the Impact Dollars the Foundation gets from its Impact Bonds can be distributed to OMNI holders as well, the record of success is still in the chain, and since they have no monetary value you all may as well get the benefit of the collectible value and the sentimental value.
Then we can do sub-referendums on how much money approved projects should get where Impact Dollar holders get weighted input. This gives Impact Dollars some financial value, actually, as it allows “activists” to buy influence, perhaps in the Carl Icahn sense rather than the Occupy Wall St. sense. Hey it could be very problematic, it will be fascinating to find out.
Eventually combining these mechanisms with an automated Trust address (not like “trust us” but like a Charitable Trust), ideally one built in to Omnicore’s DB logics at a low level so we can know it’s safe, we can have the capital managed by trading algorithms running as a service on a decentralized architecture, have some human input in feeding referendums to the Trust and the voting. Maybe referendums need approval before becoming votable, decided by the board members? Maybe we all get keys and need unanimous consensus before it goes out to vote? Maybe the Trust has well-defined criteria about what is a viable use of funds encoded at the smart contract level and referendums must fit them to pass even with unanimous board votes.
At that point we would be 90% DAO, an almost unrecognizable cyborg compared to the all-too-human organization we were in youth. We see the Foundation reaching this vista over the next 3 years if we are successful in these adolescent steps, making the second 5 years of its life a well-optimized mission of capitalizing as many people as possible.
You run an open-source project without payroll for 8 months, you end up with a team full of people who prefer value to money. JR donated over half of his OMNI position to the dev team’s option pool, for example, that’s ethical design. We (as natural persons) have a profit motive but the Foundation (a legal person) is framed so that there’s also a non-profit motive in the driver’s seat.
Why do smart contract developers try to convince oligarchs to adopt our tools without appropriating it into a cherry-picked monstrosity? Bad outcomes await for such expectations. I’d rather go make clients of people with $500 net-worth mostly in goods and some physical cash. They will go have excited conversations with their familiars about how they’re making more money, and it catches fire.
If you think about it deeply, this attitude of service is really the best way to maximize value for crypto-finance technology. In order to receive, we must first give.