Show and telll

On the last week of the month we share our projects! Gus invited founders Jack and Auryn to show us a demo and talk about how Colony is different than other DAO platforms. Much discussion ensued! Fantastic notes by Michal.

video link:

dGov Chat: Guest, May 27 2020

Today’s moderator/facilitator is Gus, who invited the guest from, Jack du Rose

Auryn the floating head from the Colony team is also here to help explain.

“An Operating System for Organizations”

  • Kind of like a “DAO platform”
  • But DAO are still kind of ill- or poorly-defined, and changing

Other “platforms for DAOs” are there too, but they mainly focus on “use of funds” or “voting” applications

// Colony tries to avoid voting

Theory of the firm

  • At some point it’s more efficient for companies to have employees than just use the market

  • It happens because of transaction (or coordination) costs

    • Find supply, coordinate supply & demand, do remittances, create agreements, enforce contracts, etc.

“Earning meant getting a job, and work needed management”

Today, software increasingly coordinates supply w/ the market”


  • Have to coordinate everything remotely
  • This coordination should be more efficient than traditional means
  • Voting is not a great coordination mechanism, so DAOs have limited uses


COLONY // Decentralized, self-organising companies where decision-making power derives from high-quality work

  • I.e. the more good work you did in the past, the more say you have
  • Hierarchy as an emergent property (based on engagement, and quality of work)
  • ANTs not Empires
  • Complex Adaptive Systems -> Simple rules lead to emergence of collective behavior

Key principles

  • “Permissiveness” - it’s ok unless it’s not
    • Works for Wikipedia - you can make edit, until you can
  • Believability-weighted decision making
    • Like with Bridgewater associates
    • The more good past work you did in the domain, the more believable you are
    • Weight decision NOT by amount of tokens you have, but by quality of your past contributions
  • Avoid voting
    • Use only as last resort

There’s a live application, updated regularly

Built for developers too

It’s a platform

NO token

  • Colony never did token sale
  • Comes down to legal concerns… (for ICOs)
  • Most tokens have had little to no utility or need for existence

  1. If you can do it with Ethereum - think twice about doing your own token

  2. If people go away value flatlines? - It’s bad

If you’re selling a token…


  • Transaction fees on payments
    • Now effectively zero
  • reputation mining
  • Not a security, by design

Will likely do a sale, in the future:

  • Introducing a new mechanism

The Colony Model

  • Why colony doesn’t want to make a decision by voting?
    • Example of: Should Ann be reimbursed for a coffee from last week?
      • In companies it doesn’t work like that
      • People get responsibilities and budget
      • That drives efficiency
      • Voting on everything would make…
        • Stuff awfully slow
        • You do that infrequently
  • Goal of Colony - make companies more agile in the real world

Three paths:

  • Changing something
    • E.g. a new feature,
  • Two - “happy paths”
    • Cancel proposal
    • No objection
  • Third path
    • When someone has objection
      • Effectively creating a “motion in opposition”

Fold = concede the proposal, lose part of the stake (e.g. 10%)

Call => Voting

Loser / Winner get some stake returned

  • Stake * (90% * [% of votes received])

Based on results it’s either pass or fail


  • to a higher level in the organization, with more “reputation”

Q&A notes:

  • Reputation decays over time
    • To reward more recent contributions
  • “How are topics organized”?
    • It’s decided by each colony
    • Sample hierarchy example below
      • If you earn reputation in colonyDapp, you’ll also be getting some reputation in Dev (small share) and Root (even smaller share)
    • There’s ability to allocate skills to expenditures

“What prevents Colony from raising protocol fee thus increasing my org transaction costs?’’

  • That’d be mediated by the “Meta-Colony”

Milestone vs. upfront-system

  • With Colony you can check and vote on the work as it goes vs.
  • Autark vs. Aragon lawsuit


Future mechanism => Funding blocks, to automate them

Q: “Conflict between teams, e.g. UX vs. Dev”

  • It’d go to the top layer where everyone has a bit of say, based on past work

Q: “Decay rate of reputation?”

  • Fixed for now, but it’s on the roadmap to differentiate

Q: How much upper-layer reputation do you get?

  • Based on total reputation in the system, not a predefined ratio

Q: Can we understand a bit about the budget allocation? It seemed like there is a super-user who gets to allocate the budget to the different departments?

  • There are some differences between now and white paper
    • Core assumption of modularity
  • Permissions were tied to personas, but now can be delegated
    • E.g. to smart contracts

Q: “Budget box”? Can you tell more about it?

  • Kind of a passion-project for now, more than a key milestone
  • Target for end of the year
  • “A way of providing a continuous supply to tokens to people building on Colony”
    • Pairwise voting
    • Based on KPIs and additional engagement generated
  • Creates more of continuity for funding, i.e.
    • Expectation of more regular funding, vs. lump-sum, one-off grants,
  • Takes is fairly simple inputs (pair-wise comparisons, e.g. I like this more than that), but
    • Produces fairly complex outputs
    • Algorithm aggregates seemingly random walks into a joint probability and distribution model for all the features and work
    • Still, low intensity cognitive task

Q: How did you fund development if you didn’t do an ICO yet?

  • Private sale + bootstrapping

Q: “Coin machine? Is it available?”

  • No, not available yet
  • It’s WIP
  • Solidity is done, under testing
  • Need to clarify legal + improve UI
  • Hope to get it out by the end of the year
    • And test it with CLNY
    • Goal - get the token out there

Q: “What does reputation look like? Esp. domain-wise”

  • For now, you see the root-domain reputation

Q: “Policy-making for the initial CLNY”

  • E.g. initial distribution, inflation rate, etc.
    • Target - 10% “inflation” of INITIAL supply (asymptotically to zero in infinity)
    • There are also mechanism to burn CLNY
    • Initial supply - 1 Billion tokens

Q: “Reddit & Colony”

  • Interesting way to see each community as a potential colony
  • Pioneering experiment with “donuts” token
    • A chance to see and observe results

Q: “It’s a lot and confusing… How can I get started in this field?”

  • You need more people
    • To get more people and apply the knowledge they need to understand it first
      • E.g. repairs of a building
  • People who are most interested in those, they’re domain experts, e.g. in banking, transportation, etc. — they speak different language
    • “They want to use it, (…) but they don’t understand it”
    • Is there a plan for some educational materials?
      • Q&A, videos, etc.
      • For people in banks, etc.

“It’s a huge challenge communicating — complex ideas, new ideas [and which require] a lot of implicit knowledge”

  • Key questions:
    • Is it a potential market?
      • Colony is probably less of a tech for existing enterprises
      • Blockchain tech creates a lot of obstacles for enterprise - e.g. privacy, systems integration
  • Where could it be used?
    • E.g. games
    • Generating real value, self-managing,

Q: “Is Colony live on any testnets? or only on mainnet”

  • It’s on mainnet and goerli. but the app only accesses the mainnet deployment
  • aragon offers their dapp on rinkeby and it’s a great way to get started without spending any eth