Milestone 9 RATH Crowd as Company

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Our team is focused on researching governance options as a follow up to our submission Milestone 7 RATH Crowd as Company. We are currently investigating the DCO organization structure to facilitate a voting mechanism. Joel Dietz and the folks at Swarm have been very receptive to supporting our inquiry and research mission. Following are excerpts from their current documentation. While their origins are in crowdfunding, there is a good synergy of governance mechanisms that could serve our platform quite well. We will further develop our Milestone/Prototype shortly.

Swarm defines DCO as: [[1]]

"Distributed Collaborative Organization

A Distributed Collaborative Organization or DCO is a proposed form of organization with characteristics that include: 1) primary governance and operations are conducted via a distributed network (blockchain); 2) stakeholders are afforded with a more active and possibly democratic role in the management and operation of the organization and 3) the interests in the organization are structured with so as to fall outside of the existing, conventional definition of a security under U.S. Securities law. The concept of a DCO has emerged to address the demand for a more collaborative organization that can allow more decentralized participation - and perhaps, in the future, economic participation - in companies that cannot currently raise capital from or grant traditional interests to the general public.


The ideal organization is one that rapidly extends to reach a global audience, provides a meaningful benefit to its stakeholders, and has sufficient funding to reach its goals. This generally includes the ability to rapidly make decisions and the ability to rapidly replace people who make poor decisions that are not in the best interests of the organization’s goals. These ideals will be kept in mind when considering more broadly the various variables that apply.


Major constraints on organizational growth and organizational structure are quality of team to execute on ends, funding, and regulatory constraints. When it comes to any particular replacement of traditional share based offerings or other organizational structures that are traditionally conducted by lawyers by blockchain technology or a ‘smart contracting’ system, there are significant technological constraints as well. These may mean that various proposed aspects of an optimal organizational structure simply do not have technological support. For example, it could be that some stakeholder voting is a necessary part of an ideal structure, but no such voting system has been implemented.

Ideals in the context of a DCO

A distributed organization can more rapidly engage stakeholders who are interested in the projects success. If the stakeholders can also experience some financial returns associated with their participation, this opens up a larger possibility of liquidity around associated offerings. Consequently, this can open up the larger possibility of funding and can be seen as a logical conclusion and extension of the crowdfunding model."

Categories of Voting Actions

The general categories of action are the following:

  • Minor actions
    • Type of minor actions:
      • Adjustments to strategy or timelines
      • Minor budget adjustments ( < $25k )
    • Notification timeline:
      • 2-7 day notice via email
      • 1 week time frame in which to vote

Minor actions require a majority of voting members.

  • Major actions
    • Types of major actions:
      • Major budget adjustments ( > $50 - 250k )
      • Election of an open delegate seat
    • Notification timeline:
      • 1 week notice via email
      • 3 week timeframe in which to vote

Major actions require 60% approval of voting stakeholders within the time period specified.

  • Critical actions
    • Type of critical actions:
      • Issuance of new stakeholder rights
      • Adding new delegates
      • Opening an additional funding round
      • Approval of budgets of greater than $250k
      • Removal of a delegate
      • Amendments to these bylaws
    • Notification timeline:
      • 2 week notice via email
      • 4 week timeframe in which to vote:

Critical actions require 70% approval of voting stakeholders within the time period specified. Structural actions Changing or emendations to these bylaws require 80% approval of voting stakeholders within the time period specified and universal consent of delegates.

The following is from the DCO Step by Step Guide [[2]]

Leadership, Trust & Honesty - Good project management

  • Accountability & responsibility
  • don't appoint leaders, let their accountability talk
  • reward accountability by asking to announce formally
  • People will do as you do, exactly as you do, even if and when you are having one of the worst days of your life.
  • I trust you - go

“peaking at fifty thousand members during that time, this was not abused once. Not once.”

  • Don’t play the blame game
  • Leadership is psychology, and has very little to do with a paycheck and much more to do with deeply ingrained social wiring in human beings.
  • Endless encouragement
  • Small amounts of conflict is actually a step of progress
  • It's easy to inadvertently exclude people from participation. Work to include.

Control the Vision, but Never the Message

  • Imperative that everybody is empowered to act in the swarm just on the basis of what he or she believes will further its goal

but no one is allowed to empower himself or herself to restrict others, neither on his or her own nor through superior numbers.

  • Goals come from you - make them clear

Find passionate people

  • Communicate your vision to everybody, and let the thousands of activists translate your vision into words that fit their specific social context.
  • Activists will naturally translate the vision into different social contexts“If you see something you don’t like, contribute with something you do like.” one of the worst things that can happen to the swarm is the emergence of a backseat driver culture, where those who take initiatives and risks are punished for it
  • reward - you need to celebrate every time somebody does something you feel goes in the right direction and that initiative is criticized by somebody influential outside the swarm.