Defi+DAO is the perfect fit. What about the Persistent organization (CO)?

Original title: Sustainable Organization (CO) : Aligning Stakeholders' Financial Interests in the Digital Economy

Originally written by Thibauld Favre, CEO of Fairmint

Free and easy happy

Written on the front: the outbreak of the recent Defi project have led to the attention of many people, such as the partner of famous investment institutions Placeholder Chris Burniske then said "Defi influence on Ethernet fang, even more than ICO", but the reality is, ETH currently is not because of the outbreak of Defi captured a lot of value, it has to do with 17 years of ICO influence obviously doesn't compare, and the latest theory is that, the Defi + DAO combination, can trigger a similar effect of ICO.
Although the DAO (decentralized autonomous organization), the concept of very subversive, but in fact it is not suitable for the traditional company or organization, and is similar to the concept of the sustainability of the organization (CO) model, the theory can be used by companies like reality, so as to bring all stakeholders in the era of digital economy a lot of very useful features, but it also involves the relevant securities law.
In this article, we introduce the concepts of sustainable organization (CO), sustainable securities issuance (CSO), and decentralized autonomous trust (DAT).

Version: 1.2

Keywords: Fair Securities, Sustainable Securities Issuance (CSO), decentralized Autonomous Trust (DAT), Union Curve Smart Contract, People

& have spent

In this paper, & have spent

The digital economy has fundamentally changed the nature of the relationship between customers and businesses. Today's individuals have gone from being passive consumers to being a significant force in creating value, whether through their actual work (Airbnb, Uber, app store, amazon marketplace, etc.) or through their data (Facebook, Google, etc.). By leveraging the work of users, organizations in the digital economy have the ability to create personalized user experience products that sustain growing returns on scale and thus provide investors with substantial returns on their investments.

Unfortunately, today's organizations do not have an easy and effective way to align the interests of users with the financial success of the organization. This is mainly due to the restrictions and frictions imposed on non-qualified investors in the sale and distribution of securities under today's securities laws.

To address this, we propose a new paradigm: the sustainable organization (CO), a new type of organization that aims to better coordinate the interests of stakeholders than traditional organizations. A sustainable organization is one that establishes a sustainable securities offering (CSO) by channeling some or all of its realized earnings to a decentralized autonomous Trust (DAT). DAT, on the other hand, is a smart contract that USES predefined rules to automatically issue, buy back and destroy an all-digital securities called Tradeshow to satisfy market demand.

In general, continuous organization (CO) brings very beneficial characteristics to all stakeholders, such as:

- The founder has access to a simple and effective funding mechanism, while closely linking the financial success of the community and the project to create strong network effects without compromising organizational governance.
- Employees transform illiquid stock options into unalienable liquid equity securities in a favorable way, truly aligning their interests with the interests of the organization.
- Early investors get their fair share of the proceeds if the organization succeeds without fear of being overdiluted in a later, larger round of funding.
- An organization's users, customers, suppliers, and partners are able to invest in the organization in a way that allows them to align their interests with the organization's.
- Because of the "securities" nature of fair securities, regulators can better protect citizens from risky ICOs and also have the ability to tax income generated by sustainable organizations.
- This environment benefits from the decoupling of governance and financial benefits proposed by the sustainable organization model, which enables founders and their organizations to focus more on long-term development.

Of course, due to the "securities" nature of fair Securities, this requires the issuer to comply with the securities laws of its jurisdiction.

& have spent

Catalog & have spent

The background,

Organizations have evolved and adapted to the digital economy

1, 2 The rise of the masses

1. 3 New challenges

1. Emergence and problems of ICO 4

Ii. Sustainable Organization (CO)

2. 1 Understand the joint curve model of scrip

2. Continuing Securities Issuance (CSO)

2, 3 Decentralized Autonomous Trust (DAT)

2, 4 Life cycle of continuous organization (CO)

2. 5 Problems in the secondary market

2, 6 Benefits of continuous organization (CO)

CSO and applicable use cases

Iv. Legal and regulatory considerations

Five, the conclusion

& have spent

The background,

Organizations have evolved and adapted to the digital economy

As the world moves from the industrial age to the digital age, the legal structures invented and optimized to meet the commercial needs of the industrial age are now showing their limits. In fact, the digital economy has pushed companies to adjust and transform the way they do business, so much so that their nature has changed completely:

But despite the tremendous changes in the organization, we still run our business with the same type of legal entity. These legal entities were designed within the state to meet the needs of the organizations of the industrial age. They are no longer appropriate in the computing and networking age, where organizations use the power of the masses to reap increasing rewards of scale, thus blurring the lines between users and workers.

For example, an Uber driver is both an Uber user and an Uber employee, as is a host on Airbnb, a Facebook user is also a (unpaid) Facebook employee, and so on.

1, 2 The rise of the masses & NBSP;

In his book Hedging, Nicolas Colin describes the situation succinctly:

In order to define the nature of power, Nicolas Colin with Henri Verdier co-authored a book defines the concept of the masses "multitude" :

"The masses are defined as billions of people who are now equipped with increasingly powerful devices and connected through extensive networks."

In the digital economy, organizations rely on people (i.e., Uber drivers, Airbnb hosts, Apple app developers, Face)Book users) is booming as a business, but the public has no vested interest in the wealth it creates at the organizational level. Instead, most have entered the "gig economy", where they are paid for a part-time job after successfully completing a service. Once rare in the industrial age, these jobs are becoming more common.

1. 3 New challenges

The radical transformation of organizations in the digital economy presents major challenges for all stakeholders that must be addressed:

For founders:

"How can I motivate my community to contribute to the long-term success of the organization?"

The answer is money. In the digital economy, where people have become an important part of organizing the workforce, founders need new mechanisms to attract, retain and empower diverse global communities. Many marketing strategies already exist, but none of them provide a lasting, solid alignment of interests between the organization and the community. Under current securities law, the real solution (selling and/or distributing securities to the masses) is so legally complex that it is not a realistic option.

"Airbnb is a community-based company, and we're not going to get anywhere without our hosts. We want our most loyal hosts to become shareholders, but these policies need to change to make that happen."

That's according to Brian Chesky, Airbnb's CEO, in a review letter Airbnb sent to the SEC. (Note: Apparently, the SEC has not agreed to this, and Airbnb is not yet bankrupt, but is on the verge of collapse.)

"How do I build long-term relationships of trust with my community?"

The answer is trust. To form a lasting and stable alliance with the masses, organizations need to earn their trust. However, as more and more people understand how the venture capital (VC) model works, it is becoming increasingly difficult for vC-backed organizations to gain the trust of the community. In fact, until investors need liquidity, the interests of venture firms are aligned only with those of the organisation. When investors demand liquidity, the alignment of interests is suddenly concentrated in the very short term and investors want to sell their shares at the best possible price. In most cases, founders are severely diluted and lose control of the organization, so they can't do much to make a difference.

For employees:

"For the risk I take, I want a financial return in proportion to the value I create."

The answer is fair value creation capture. Unlike investors who diversify their portfolios, employees are not diversifiedThey receive income only from the organizations in which they work. There are many programs designed to align the interests of employees with the financial success of the organization, but most programs offer illiquid and transferable contingent securities or stock options. The lack of mobility in private organizations often means that employees are forced to leave with a lot of value when they leave the organization (they contribute to creating value).

For the masses:

"I hope I can get a financial return from the organization by contributing."

The answer is long-term wealth accumulation and economic security. When communities (whether users, workers, partners, suppliers, customers...) They fall in love with the product or service provided by an organization and hope to be rewarded financially for their positive contribution to the product and accumulate long-term wealth in the process of helping the organization grow. There are only so many benefits of one-off recommendations, coupons, etc. What people want is money! This is especially true in today's context.

For investors:

"I want the best return on investment for the risk I'm taking."

The answer is the highest return on investment. Investors really want one thing: the ability to sell their shares at the highest valuation. Investors' need for governance stems only from the fact that their investment lacks liquidity and they need governance to protect it until a liquidity event occurs. As long as they can sell their shares at the best price they see fit, investors will be happy. Without liquidity, VC investing is like a home run game - finding an investment that delivers exceptional returns and overcompensates for the vast majority of underperforming investments.

For regulators:

"I want to help innovators, protect investors, and collect my fair share of taxes."

Regulators (often) aim to provide innovators with a regulatory framework to help them create new services and products. A key aspect of this regulatory framework is to help innovators raise capital while providing investors with reasonable legal protections against misconduct. Before the digital economy, this strategy would have paid off handsomely through taxes. Unfortunately for regulators, the digital economy makes it harder to tax:

"The digital economy systematically separates the place of business from the place of consumption. As a result, it is increasingly difficult to determine where the value created by this economy is located and to apply the rules of the tax code that are now outdated." - Pierre colin & amp; Nicolas Colin

For the earth:

"I need organisations that think long term."

Creating incentives that enable organizations to optimize over the long term, while being responsible for environmental impacts, is very beneficial to humanity as a whole. The tragedy of the Commons is made all the more real by our inability to establish globally enforceable governance mechanisms on environmental issues and the short-term behaviour of today's financial markets.

1. Emergence and problems of ICO 4

The rise of cryptocurrencies in recent years has given rise to a new way of organising financing -- initial coin offerings (ICOs).

And the organizations that do these activities, more or less, use the following ways of publicity:

"We created in the block chain fixed number of tokens, these tokens are not stock, because we will not give any financial investors or the right to vote. However, you can expect these tokens with future value, because we design a system, it will be a * * * cattle X functions, we are selling a certain number of tokens, to finance the project development, these tokens will soon flow in the market, we will be in XX exchange online, don't miss this chance..."

On the surface, ICOs seem to coordinate the interests of key stakeholders in an organization, such as founders who raise large amounts of money without giving them any governance authority, allowing them to pursue their vision. Investors were also happy to be able to cash out quickly when the moCOcoin was launched on the exchange. This early liquidity allowed them to reduce their risk significantly, provided they had enough liquidity. Employees can also be happy because they get liquid tokens to cash out.

But here's the thing: It's very difficult for inexperienced investors to assess the value of tokens, and as a result, many retail investors are getting burned by projects that promise super-high returns.

In fact, in most projects, the risk associated with the project investment is an order of magnitude higher than the potential return. The following are the main risks involved in an ICO:

- Is the team properly motivated to create the product? In many projects, the founders have left themselves a lot of tokens and little or no lock time, so if the ICO succeeds, the founder will immediately become rich and may lose the incentive to actually create the product.
- Can the team create a product? Projects are often in the early stages, with no products to showcase and only the good vision described in the white paper.
- Can the product be created on the proposed schedule? Many of the project's backers seriously underestimated the significant technical limitations of integrating blockchain with tokens in the system.
- Does the product have a good user experience? Most projects completely underestimate the UX constraints of integrating tokens into the system.
- When the product is delivered, will it be used? It is difficult to know if the team will achieve a product/market match.
- If the user likes the product, will the token capture any value? There may be cases where a project is very successful, but its token has no value because it is not a security.
- If tokens have value, would they be a good investment? Remember, most projects sell their tokens at very high valuations.

Given the above reasons, most ICO projects will fail and they are not good investment targets. To make matters worse, a project may be very successful, but its tokens are worthless, which raises two important questions:

- Retail investors will be deceived by the way Shitcoin Falls operates in the ICO;
- Regulators don't know how to deal with ICOs. On the one hand, they welcome innovations that attract talent and investors, but on the other hand, they prefer not to let retail investors be cheated.

And here's the thing: The vast majority of icOs out there are scams.

Ii. Sustainable Organization (CO)& NBSP;

A sustainable organization is any organization that sets up a sustainable securities offering (CSO) with the goal of enabling each stakeholder to invest in the organization at any time.

2. 1 Continuing Securities Issuance (CSO)

Continuing securities issuance (CSO) is a novel way for organizations to obtain financing without releasing any equity or governance rights. CSO USES an organization's realized income as collateral to support fully digital securities (called equity securities) that anyone can buy or sell to speculate on the organization's future income.

To create a continuing securities issue (CSO), an organization will agree to use a fixed percentage of its realized income to create a valuable collateral for a predefined minimum period of time. Specifically, this is achieved by injecting the above fixed percentage of income into decentralized Autonomous trusts (DAT). DAT, on the other hand, is a smart contract, which USES scrip joint curve contracts to automatically issue and repurchase fair securities to meet the market demand of investors.

Important notes on currencies that interact with DAT:

(In the following example, we use the ETH as currency to interact with the DAT. The ETH is ethereum's native currency, but this does not mean that users have to use it to interact with DAT; in fact, it can be replaced with stability COINS (such as DAI or USDC) to eliminate the effects of volatility.)

2. Understand the joint scrip curve model

Since Simon De La Rouviere first proposed the joint curve model in 2017, many people have explored the idea.

A joint curve contract is a special type of smart contract that issues its own tokens via the Buy and sell function. To Buy the token, the buyer sends the ETH to the Buy function, which calculates the average PRICE of the token and sends you the correct amount. The Sell function works the other way around, and the contract calculates the current average selling price and sends you the correct ETH amount.

In the case of a continuous organization (CO), the buy and sell functions are different:

The joint scrip curve model has interesting features, including:

- Unlimited supply and unlimited number of tokens that can be minted;
- Deterministic price calculation. The buying and selling price of the token increases or decreases with the quantity of the token cast;
- Guaranteed immediate liquidity, the joint Curve contract is the counterparty to the transaction and always holds enough ether reserves to buy back tokens. So tokens can be bought and sold instantly at any time, and the joint curve ACTS like an automatic market maker.
- Continuous price, the price of token N is lower than that of token N +1 and higher than that of token N-1, the calculation of the number of tokens cast by a given amount of ETH (or the number of ETH returned by a given amount of token) requires a certain amount of integral knowledge.

It is important to note that in the joint curve model, the X-axis represents the number of tokens issued. To take a simple example, assume that B (x) =x and S (x) =0. The cost C of the first 10 tokens, given by the curved surface between the buy curve and the sell curve, can be expressed as the following formula:

So in our example, C is equal to 10 times 10/2 is equal to 50.

2, 3 Decentralized Autonomous Trust (DAT)

In the case of persistent organization (CO), we introduce a yield-based joint curve: a joint curve using two different functions, one for the buy curve and one for the sell curve: B (buy) and S (sell).

A decentralized model of stunting for an autonomous trust union

These equity securities will represent claims to DAT cash reserves. It is important to note that, unlike shares, equity securities do not represent ownership of an organization; they have financial rights only to the cash reserves managed by the DAT.

DAT's cash reserves are a function of the organization's income. Thus, by buying fair securities, investors gain financial exposure to the future revenues of the organisation.

Function B defines the price of buying a fair security from DAT, and B is a linear function that has a positive slope B, such that B of x is equal to B times x, where& have spent And b> 0. The slope of B is arbitrary, and the higher b is, the more the unit token is worth, and the lower B is, the less the unit token is worth.

If you want your investors to have lots of tokens, choose a very small B value (say 1x10^ -9).

The function S defines the price of the DAT repurchase of a fair security, and S is also a linear function with a slope S such that S (x) = S * x, whereAnd s> 0. However, in a persistent organization (CO), the value of S varies over time. To illustrate how the value of S varies over time, it is important to understand how the DAT receives and processes the cash it receives.

The investment-buy () function

The first source of DAT cash flow is investors who want to invest in sustainable organisations. They do this by calling the buy () function of DAT. Each time an "outside" investor sends money to the DAT, the DAT deposits some of the cash into the DAT's cash reserves and the rest into the organization's wallet. We call I  Is the percentage of funds in cash reserves, and this I is constant.

The value stream at the time the investment occurs

The impact of investment on the DAT joint Curve contract at the time of occurrence

Investors who buy equity securities want to invest in the underlying organization. They don't want their money to be kept by DAT. They want their money to be well used by the organization. If the organization's characteristics (revenue, growth...) It turns out that I can even be 0.

For example, if the investor sends 10 ETH to DAT, if I=10%, DAT will transfer 9 ETH to the organization's wallet and keep 1 ETH in its cash reserves.

The above rules do not apply if the investor is a beneficiary organisation that technically invests in itself. In that case, I is always equal to 100%, which means that every time an organization invests in its DAT, 100% of the money the organization USES to buy fair securities flows into the repo reserve. For more information, see the beneficiary organization's Fair Securities Purchase below.

Differential and integral calculus

When an investor purchases fair securities at cost C, he receives X units of fair securities, where X is equal to:

Where C is the amount of fair securities to be purchased, B is the sales slope, and A is the amount of fair securities already in circulation before the transaction.

Equity securities purchased by beneficiary organizations - Buy ()

At any time, the beneficiary organization can decide to buy fair securities. For this purpose, the beneficiary organization calls the buy () function just like other investors, but unlike outside investors, 100% of the funds used by the beneficiary organization to buy fair securities flow into the repo reserve (i.e., when the funds come from the beneficiary organization, the contribution rate I is equal to 100%).

This ensures that the interests of all investors are perfectly aligned. In fact, if the beneficiary organization can purchase fair securities at the same investment rate as the outside investor, it will specifically mean that the beneficiary organization can purchase fair securities at a lower price than the outside investor (since, by definition, the organization receives (1-I)% of the amount invested). This difference is easily abused by dishonest organizations and managers.

Buying fair securities is also a way for organizations to reward holders of fair securities. In fact, when a beneficiary group purchases a fair security, it not only increases the repo reserve, it also increases the slope of the sales curve (see details below).

Thus, for an organization with out-of-chain income, the purchase of equity securities is the organization's way of actually transferring its income to the DAT. This means that the more revenue an organization generates, the more equity securities it accumulates over time that can be used to further motivate its key stakeholders.

Of course, if the organization wants to maximize the compensation of fair security holders, it could simply decide to use Burn ()& NBSP;; The delta function burns its fair security.

The value stream when the beneficiary organization purchases fair securities

The impact of beneficiary organization purchases of equity securities on the association curve

The difference between the investment of outside investors and the purchase of fair securities by beneficiary organizations is derived from the ratio of their respective contributions to DAT reserves:

- Investment by outside investors: Amount M contributes I*M to DAT's reserves and creates the equivalent value of M, therefore, (I*M) /M= contribution rate of I and I< 100%;

- Fair securities purchased by beneficiary organizations: amount M will contribute M to DAT's reserve and cast the equivalent value of M, so the contribution rate of M/M is 100%;

After the completion of each transaction, S can be recalculated according to the amount in the RESERVE Rt:

so

For example: suppose I=10%, S0 =0.1, b=1, suppose an investor buys the first 10 tokens at the price of 50 ETH, then DAT now has 50x10% = 5& NBSP; ETH reserve, then the beneficiary organization produces 0.0995 tokens at the price of 1 ETH, resulting in S1 =0.1176, therefore, due to S1 & GT; S0, which increases the value of fair security holders, meaning that investors can now sell their fair security at a higher price than before.

Burn Fair Securities - Burn ()

A fair security holder can burn off its fair security at any time by calling the burn () function.

Technically, burning fair securities does not destroy them (total supply remains constant), but ensures that no one can use them, so that their marginal value is equally redistributed to other fair security holders.

It makes no sense for the investor to do so, but the beneficiary organization has a reason to do so, such as (1) not using these fair securities, or (2) if it wants to increase the value of all other fair securities holders, then destruction makes sense.

The investment-sell () function

Investors can decide to sell their fair security at any time to take back the ETH, which they do by calling the sell () function. When the DAT receives the fair security, it burns the fair security received and sends the ETH back to the investor according to the function S. The slope of S increases discretely over time with each payment received by the DAT. The ETH returned to the investor is drawn from DAT's "buy-back" cash reserves and does not affect the organisation's funds.

The value stream that occurs when a fair security is sold

Effect of selling scrip on the DAT joint Curve contract

Calculus involved:

When an investor sells X fair securities, assuming no fair securities have been burned before, he will get an amount c, which is equal to:

Where S is the selling slope and A is the fair amount of securities in circulation before the transaction.

In the case of a fair security being burned, calculus becomes:

Where x prime is the fair amount of securities that are burning.

Income - pay ()

A persistent organization can sense a customer's payment directly through the DAT by calling its pay () function.

Whenever a payment P is received by DAT, a small portion of the payment received will flow into the cash reserve. We call D (for distribution) the percentage of income flowing into cash reserves, and D is the corresponding portion of income (D =P*D). The full amount d is held in DAT's cash reserves, thus increasing the value of fair securities.

Note that calling the pay () function also triggers the issuance of a new fair security equal to the number of fair securities created when the call to Buy (d) is made. By default, these newly created fair securities are sent to the organization, as shown below:

The value stream when a continuous organization relies on DAT to receive payments

Alternatively, the customer can specify an argument to the pay () function to send the newly created fair security to an address of his choice (probably his wallet address), in which case the value stream would look like this:

The value stream when the customer specifies the wallet address

For example: suppose D=5%, if the continuous organization receives payment from 100 ETH, 5 of which will flow into the "repo" cash reserve, thus increasing the collective value of fair securities.

Note: For some continuing organizations (for example, companies without underlying legal entities), it makes sense to receive payments from customers directly through DAT (that is, revenue from the continuing organization). It should be noted that the income of the organization does not have to be realized through DAT, because the organization may also decide to reward the holders of the fair securities only through the purchase of the Fair Securities.

For organizations that already do business, they are likely to prefer to first receive payments from customers in legal tender and then transfer a small percentage of their perceived income to DAT to increase the value of fair securities, as shown below:

In this way, DAT is completely invisible to the customer (the user experience does not change) and the organization does not have to modify any highly optimized sales processes.

Pre-dig the fair pool of securities

When a DAT is created (once a DAT is created, the rules are immutable), the organization can decide to "pre-dig" some equity securities for itself, which means that it is different from a zero DAT equity security.

Pre-dig equity securities are often significant for organizations, whether it's rewarding founders, paying early employees, rewarding early users, or providing a liquidity pool for secondary markets.

However, it is important to recognize that there are potential costs to preemptive equity securities, because these "free" preemptive equity securities represent sales pressure for DAT and do not provide any contribution to DAT's "repo" cash reserves.

Technically, this means that the more fair tokens you pre-dig, the lower the sell curve (the slope of s defined above). Therefore, in particular, if an organization decides to create a DAT with a large amount of equity securities, it may need to be very careful, as too much digging could have a significant negative impact on the risk and financial return of the investors.

All other things being equal, the effect of pre-dug tokens

So, as an organization, you may have good reason to anticipate some fair securities, but be careful, because trying to dig too much will make fair securities less attractive to investors. Thus, a good rule is that only the equity securities required are pre-cast before revenue is generated, and once the revenue continues to flow in, the organization will increase the value of the equity securities by channelling its revenue to the DAT.

summary

A sustainable organization (CO) is an organization that issues fair securities through a CSO by channalizing some or all of its realized income to a specific type of smart contract called a decentralized Autonomous Trust (DAT). These equity securities represent claims to DAT's current and future cash reserves and allow investors to trade on the organization's revenue growth. In such a design, organizations, investors, and potential customers interact by sending ETH or fair securities to DAT:

2, 4 & have spent The life cycle of continuous securities issuance & NBSP;

1. Initialization

The initialization phase of a CSO is specific because it does not use a federation curve. In fact, to start a CSO, the beneficiary organization needs to set a minimum financing target (MFG), which is the amount of investment required to start the federation curve. All investors who invest before meeting the minimum financing target (using the buy () function) will receive a fair security at the same average price, as shown in the figure below:

The initial phase of CSO

Until the minimum funding target is met, all funds are in custody and the investor can decide to withdraw the investment at any time (by calling the sell () function) and will receive 100% of the invested capital. Once the minimum financing target is reached, the joint curve is activated, a small portion of the minimum financing target is injected into cash reserves, and the remaining funds are transferred to the beneficiary organization.

In addition, the beneficiary organization can unilaterally decide to cancel the CSO until the minimum funding target is met, in which case the investor can withdraw 100% of the investment funds.

It is important to note that once the minimum funding target is met, the organization cannot cancel the CSO again, after the minimum funding target is met, investors cannot withdraw their money as the joint curve starts and they can now only call the sell () function, as described in the previous section.

This minimum financing target mechanism protects both investors and the organization, but it should be noted that the organization should not set the minimum financing target too high, otherwise it will lead to the CSO into a simple crowdfunding activity, and defeat the purpose of CSO.

2, delivery

The CSO can continue indefinitely, but it can also terminate, and the beneficiary organization can decide to close it at any time after the minimum term expires.

In order to provide some necessary visibility to investors, the beneficiary organization must ensure that its CSO has a minimum running time (e.g. 3 years, 5 years, 10 years...). . After this minimum, the organization is free to choose whether or not to shut down the CSO. In addition, at any time, an organization can increase its commitment for a minimum period of time to keep its CSO running.

Of course, closing a CSO is not free. To close a CSO, the beneficiary organization must pay an exit fee, which is equal to the current issue (buy) price of the FAIR security multiplied by the amount of FAIR outstanding. Once the exit fee is paid, the organization can close its CSO so that each investor can sell their fair security at the same price: the current purchase price.

Visualization of exit costs required to turn off CSO

Doing so means that the last investor can break even, while the early investor can expect to make a profit (which is obviously not guaranteed, since the last issue price is not necessarily the highest).

2. 5 Problems in the secondary market

The spread between the bid-ask curve also leaves room for secondary trading in fair securities. If the price of a newly minted fair security is 10, the investor would prefer to buy the minted fair security at a lower price elsewhere.

Clearly, the secondary market is constrained by the dynamic price range set by DAT: there is no reason for buyers to pay more than the current price offered by DAT. Similarly, it is meaningless for the seller to ask for a price lower than the price offered by DAT.

Interestingly, the recent rise of automated secondary market makers such as Uniswap or Kyber means that primary market (DAT) and secondary market can be fully integrated from a user experience perspective, a feature offered by Fairmint that is important for reducing price volatility and maximizing investor returns.

2, 6, & have spent Benefits of continuous organization (CO)

Compared with traditional organizations, sustainable organizations provide many benefits for all stakeholders

The founders:

- Create strong incentives to develop communities;
- Easier to recruit anywhere in the world;
- Maintain long-term control over the organization;
- Make your organization more resilient to business fluctuations;
- Less distraction (law, fundraising) and more focus on execution;
- Access to personal working capital;

For employees:

- Align your personal financial interests with the interests of the organization;
- Sell your equity securities as you see fit;

For the masses:

- If the organization is successful, it can share the value created;
- Enjoy the same long-term economic benefits as employees;

For investors:

- Use the liquidity of fair securities to reduce investment risks;
- Sell your fair securities at open market prices;
- Sell your fair share of securities at the speed you want;
- Investing in all parts of the world;

For regulators:

- Support innovation within your jurisdiction to create new products and services;
- Protecting citizens from fair securities fraud;

- Easily collect taxes through DAT.

& have spent

CSO and its applicable use case & NBSP;

The continuous organization (CO) model is not necessarily related to blockchain, but its implementation requires Turing's complete intelligent contract language. In addition, stabilizers are not necessarily required, but they are beneficial for improving the user experience of continuous organizations.

Use cases that we consider meaningful include:

- Long-term employee motivation, which is a key topic for any successful organization, unfortunately, today's mechanisms are far from perfect, especially for private organizations whose shares are not publicly traded. Instead of directly giving employees equity or stock options, organizations can use DAT to provide employees with liquidity equity securities that are inalienable, liquid and consistent with the success of the organization.

- Organizations with large community contributions have so far found it legally and technically difficult to incentivize the community financially. If your platform business is in a late stage (Airbnb, Uber, etc.) and you want to further involve your community in the platform, you can start a continuous organization by setting up a DAT. Obviously, instead of immediately investing 100% of your income in a sustainable organization, you commit to buying a certain amount of DAT equity securities each month. This way, you can easily align your community financially with the success of your business. In addition, you can distribute them to the community, employees, etc., in any way you like, using equity securities.

- Early stage startups. Entrepreneurs who develop markets or any kind of bilateral network will always face a chicken-and-egg problem. By building sustainable organizations and using equity securities, they can firmly motivate early adopters to participate and contribute to the project.

- Real estate tokens. Given that investors in sustainable organizations buy equity securities in anticipation of future cash flows, it makes sense to use sustainable organizations to buy and token real estate. In fact, real estate is a well-known provider of stable and predictable cash flows, so such a project could create a sustainable organization (CO) to finance the acquisition of real estate and provide investors with predictable returns.

- Unorganized online communities where you don't need existing organizations to create a CO or merge a CO. If you have a business idea that you want to create a sustainable organization in a purely online community, it is also appropriate. The beneficiary of DAT may simply be the project leader's multi-signature wallet, DAT will precast the FAIR to motivate the community, and DAT's D parameter will be set high enough to generate a substantial return to the community when generating revenue.

Iv. Legal and regulatory considerations & NBSP;

Disclaimer: The above only reflects the views of the CSO sponsor and does not constitute a legal opinion. You will need to consult a securities law attorney in your jurisdiction for legal advice.

It is important to note that CSO is another type of securities issuance and therefore a continuing organization is likely to be required to comply with the securities laws of its jurisdiction.

In the United States, for example, CSO could most likely be performed using the Reg D 4 (a) (2) rule 506 (c) exemption. The use of this exemption rule means that the CSO is issuing restricted securities, which in most cases require a lock-up period of one year prior to transfer. Therefore, consult your securities lawyer for legal advice before proceeding with this activity.

& have spent

Five, conclusion & NBSP;

Any type of organization, for-profit or non-profit, can become a continuous organization (CO) by setting up a CSO.

Continuing securities issuance (CSO) is a novel way for organizations to obtain financing without releasing any equity or governance rights. The CSO USES the organization's realized revenues as collateral to back an entirely digital securities called Tradeshow, which can be purchased or sold by anyone to model the organization's future earnings.

To create a CSO, the organization agrees to use a fixed percentage of its realized income to establish a value pledge for a predetermined minimum period of time. Specifically, this is achieved by injecting a fixed percentage of the income into a decentralized autonomous trust (DAT), a smart contract that satisfies investor market demand by automatically issuing and repurchasing fair securities.

Sustainable organization (CO) is a new type of Internet native organization, which is more efficient, stable and inclusive than traditional organizations. Due to its fully digital liquidity equity securities, sustainable organizations can better coordinate the interests of stakeholders than traditional organizations. Most importantly, they are easy to integrate, and their attributes make them ideal for motivating employees, developing and growing communities, and creating virtual online organizations.

Text link:https://www.8btc.com

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia