Skip to content

use case: forming projects, reconciling real/virtual accounts, auditing projects/accounts

Created by: dan-mi-sun

This is quite rough and ready whilst I have a few moments. The use case is based around a project I am involved in called Robin Hood Coop.

Background (Robin Hood Coop v.0.1)

We are a motley-crew actively looking for ways of funding and expanding the commons (what p2p foundation calls commonfare). This is the context for all our our experiments.

In 2012 we released a data mining algorithm which trades on Wall Street. We established a cooperative in Finland built around this data mining algorithm. This legal form allowed us to invest member payments on Wall Street through the mechanism of offering equity to our members (in Finland coops may do with their assets as they please, including investing on Wall Street, without requiring a Financial Services licence). Members have been required to pay a one time €30 membership fee and also one mandatory €30 share. There is no upper limit to how many voluntary shares a member may purchase beyond this.

When a member buys shares (equity), we ask them to choose a sharing scale for the profits. If a member decides to keep 100% of profits to themselves, then we have a one time tax of 10% of their total payment. This goes to Robin Hood Projects Fund. If a member chooses to share 50% of the profits with RHPF then they are not taxed on their payment. Shares are immutable - their sharing model cannot be changed once it is established, however, ownership of the share can change, or the share can be destroyed, once it is purchased back by RHC (when the member chooses this exit route).

Increases in value are only realised at Exit from the Coop.

There are 2 ways to exit the coop.

  • The coop can buy back the shares at the request of the member. This is a long process. To comply with Finnish law around cooperatives, we must wait till the end of the financial year and after our books have been audited by accountants (Ernst&Young). The funds are then moved to a holding account for 6 months before they can be passed to the member (I believe this is a rudimentary mechanism to stop theft of coop funds by quick movements)
  • A member may purchase a share directly from another member and pass on the entitlement.

The mandatory share gives the following rights:

  • 1 vote (no matter how many voluntary shares a member might have - there is only one vote per member)
  • Allowed to attend and vote in the AGM
  • Allowed to propose projects which should be funded
  • Allowed to propose themselves to be in the selection committee for projects.

Project Selection

  • RHPF is managed by three members who form a selection committee
  • Selection committee is selected at random from the pool of members who have proposed themselves
  • The committee must unanimously agree on which projects should be funded (they get to decide on all the terms)
  • Projects selected must 'Expand the Commons'
  • - this is decided upon by the Board Members

This is how it has worked since 2012. In the next update I will talk about how the 'business operations' have been working to make the above system function

I will then follow this up with a post about the current transmutation we are going through. You can read about this here

This will be released within the next month.

---> it is this mutation that I would find very interesting to go through with you ValueFlows folks, as it collides very nicely with this use case: https://github.com/valueflows/exchange/issues/6