# The neokingdom DAO perfect world scenario

*by Benjamin von Uphues* 26.08.2022

*MISSION STATEMENT*

*Neokingdoms are constitutional DAOcracies. They serve a collective of humans with a common goal. Fairness, decision making and rewarding of those who create value is technology based and happens in the virtual realm. The purpose is to create a better existence for everyone on earth.*

## Vision

The vision is to use the legal as well as technical model created for the teledisko DAO, as the MVP implementation of a neokingdom, to be used by any other project. The model will also be used in an adapted version to form the neokingdom DAO itself, which is the entity maintaining the code and serving the greater purpose by being the umbrella above all connected neokingdoms.

## Definition

Neokingdoms are EVM based, legally compliant, DAOs which rely on a legal model crafted by Oblicity, an Estonian law firm using the favorable Estonian legal system.

ODOO, an open source ERP (Enterprise Resource Planning System) is used as the digital backbone to be able to run and administer a full-fledged organization or brick-and-mortar businesses for real-world uses cases. Users vote and interact with the DAO using a progressive web app.

The core principle is that contributors of the DAO can invest by personal time-based effort or monetary contributions to receive shares in the company that represent ownership, voting and dividend rights.

## Intention

The Intention is to transform our capitalistic mindset in society from a greed and profit driven agenda to a purpose first approach, and to share with one another.

## The Purpose

The purpose of neokingdoms is to recognize the energy, enthusiasm and contribution of the individual as an asset that can be invested. The time-effort of a contributor as well as monetary contributions can be invested and is represented by a token.

The organization's value is defined as a accumulation of all the individual contributions and the income that is earned through the success of that mutual effort.

The contributors mutually govern and own the created value and income.

This allows for a fair rewarding mechanism for those that create value in order to create a more sustainable world.

## Neokingdom DAO

The neokingdom DAO acts as a holding for all other DAO's which choose to join the commonwealth. A neokingdom DAO vote is necessary to approve any new project to join. When joining, the new project has to commit and transfer 10% of its token supply to the neokingdom DAO. Hence the neokingdom DAO becomes a sharehodler in any joining project. As the project mints new tokens through added contribution it will always have to make sure the neokingdom DAO holds 10% of the total token supply. This can be considered a sort of tax to be part of the commonwealth and receive support and benefits. As with all neokingdoms those tokens represent ownership, dividend rights and voting right.

In return the joining project receives neokingdom DAO tokens. The amount of tokens received by the joining project is based an the ratio its own 10% form in the value of the emperor DAO. 

This way all joining neokingdoms are economically intertwined and it is of best interest for the neokingdom DAO to help joining projects to be successful, and vice versa.

## The Model

On the legal side the neokingdom model is currently defined through the Articles of Association (AoA) and the Shareholders Agreement SHA for the teledisko DAO. On the technical side smart contracts written in Solidity implement those 2 documents into code.

In order to understand the model in depth, please refer to and study those two documents.

In short:

There are two types of participants in the system. Investors and contributors. Contributors may earn tokens through monetary or time contributions. Contributors are shareholders and have ownership, voting and dividend rights. Investors are also shareholders but have purchased their tokens on the secondary market hence have not contributed and therefore have only ownership and dividend rights without voting right.

The principle Idea is, that the time-effort of the contributor adds value to the organization. By being able to accumulate the created value in form of a token the contributor is not paid out in Euro. This allows for the contributor to start owning part of what is created through mutual effort in collaboration with others.

For example: An organization starts from scratch at value 0. Through his/her effort the first contributor creates a value of 1000 Euro for the organization. The organization is now worth 1000 Euro. The contributor does not bill the organization for those 1000 Euro, as this would require a third party to invest 1000 Euro into the organization in order to be able to pay the contributor, leaving ownership to someone that has not contributed other then money and separating the contributors as the real value creator by paying them out.

Instead, the contributor receives tokens, that represent the 1000 Euro that he/she created, thus still owning the 1000 Euro value he/she has created in form of a token that can he/she can hold and decide to sell. (more on that subject will follow)

The tokens that are earned through contribution have full governance, dividend and ownership rights

The described process repeats with any contribution from all contributors involved leaving a complex pattern of added value.

The implemented ERP Enterprise Resource System records exactly who has added what effort and value, and how much is earned resulting from the collective effort.

The contributions just keep adding up to form the internal value of the organization.

The profits generated by the organization are distributed as dividends.

As nobody can live from air and tokens alone there is a cash-out option for contributors. They may use it at their own discretion and sell their token. The scheme for that is as follows:

If cash is needed a contributor may offer his/her token for sale. In the first instance the token are offered to the co-contributors for a window of 7 days at a fair ratio of 1 Euro/1 token. The currency used in the DAO for liquidity is a Euro denominated stable coin. If no, or just part of the token were sold to co-contributors the second step is a secondary market.

The selling contributor may decide to offer the token for up to 53 days. on a secondary market where they are on offer for outside investors to buy. When sold on a secondary market the token keeps dividend rights, however loses it's voting rights for investors. Only contributors may vote.

Should the token offered for sale on the secondary market by the contributor not be sold after the offering period of up to 53 days, the teledisko DAO has to by buy it back using funds from a trustworthiness reserve which it will maintain and fill with parts of the profits.

As any organization may need initial liquidity to purchase assets or pay for outside expenses, monetary investments are possible and governed as follows:

If a monetary investment is made, this increases the value of the organization by the amount of the investment made, and token in the same amount are minted consequently. If the investment is from within the ecosystem of contributors the token minted have full voting and dividend rights and are added to the contributors account on top of her/his contributions of effort.

If an investment from the outside is required, a DAO vote is necessary to approve and mint tokens to be released to the secondary market to be sold at market price, which represent ownership. Those tokens have dividend rights but no voting rights.

Tokens are minted at the end of each month after approving contributions in a DAO vote. Profits and dividends are approved annually.

## Contributors

On-boarding of new contributors can happen by invitation only. Any outside party can be invited by existing contributors and needs to pass KYC check.

### Contribution rates

After invitation the potential contributor is approved by a collective DAO vote to join as a contributor.

There are different qualification tiers which come with different contribution rates that apply to the different types of contributors possible.

- Tier 1 (15 Eur/h) -- Assistant: Applies if contributor starts on something new, without much previous knowledge and needs help and supervision by another contributor.
- Tier 2 (30 Eur/h) - Junior: Contributor with specific experience but still in process of learning and in need of supervision or guidance. New contributors join at that rate unless they are Assistants.
- Tier 3 (50 Eur/h) - Staff: Independent work with own expertise but still under supervision and some guidance. Tier 4 (75 Eur/h) Senior: Responsibility and holistic overview of project and supervisor role.
- Tier 5 (100/h) Expert: Critical role, leading role, holistic responsibility and part of the leading core team.

These rates can be adjusted through a DAO vote. Contributors chose their tier and then needs to be approved by a DAO vote.