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Object.assign.bind() : function (target) { for (var i = 1; i < arguments.length; i++) { var source = arguments[i]; for (var key in source) { if (Object.prototype.hasOwnProperty.call(source, key)) { target[key] = source[key]; } } } return target; }; return _extends.apply(this, arguments); }\nfunction _objectWithoutProperties(source, excluded) { if (source == null) return {}; var target = _objectWithoutPropertiesLoose(source, excluded); var key, i; if (Object.getOwnPropertySymbols) { var sourceSymbolKeys = Object.getOwnPropertySymbols(source); for (i = 0; i < sourceSymbolKeys.length; i++) { key = sourceSymbolKeys[i]; if (excluded.indexOf(key) >= 0) continue; if (!Object.prototype.propertyIsEnumerable.call(source, key)) continue; target[key] = source[key]; } } return target; }\nfunction _objectWithoutPropertiesLoose(source, excluded) { if (source == null) return {}; var target = {}; var sourceKeys = Object.keys(source); var key, i; for (i = 0; i < sourceKeys.length; i++) { key = sourceKeys[i]; if (excluded.indexOf(key) >= 0) continue; target[key] = source[key]; } return target; }\n/* @jsxRuntime classic */\n/* @jsx mdx */\n\nvar _frontmatter = {};\nvar layoutProps = {\n  _frontmatter: _frontmatter\n};\nvar MDXLayout = \"wrapper\";\nreturn function MDXContent(_ref) {\n  var components = _ref.components,\n    props = _objectWithoutProperties(_ref, _excluded);\n  return mdx(MDXLayout, _extends({}, layoutProps, props, {\n    components: components,\n    mdxType: \"MDXLayout\"\n  }), mdx(\"p\", null, \"The White Paper was not very accessible. So just posting this as a blog. Will format it later. The source of this content was \", mdx(\"a\", {\n    parentName: \"p\",\n    \"href\": \"https://media2-production.mightynetworks.com/asset/35886207/Fractally_White_Paper_1.0.pdf\"\n  }, \"https://media2-production.mightynetworks.com/asset/35886207/Fractally_White_Paper_1.0.pdf\")), mdx(\"h1\", null, \"The Next Generation of DAOs\"), mdx(\"h2\", null, \"\\u0192ractally - The Next Generation of DAOs 2\"), mdx(\"h1\", null, \"Acknowledgements\"), mdx(\"p\", null, \"This paper was put together by Daniel Larimer and the dedicated Freedom Engineers at\\n\\u0192ractally. A special thanks is due to Anna Taylor, Brandon Fancher, Mike Manfredi, Thomas\\nHallgren, James Mart, John Williamson, Gregory Wexler, Todd Fleming, and many others for the countless hours they put into refining the ideas and messaging in this paper.\\nI would like to thank the Eden community for helping experimentally prove early prototypes of the \\u0192ractally consensus building process.\"), mdx(\"h1\", null, \"Legal Disclaimer\"), mdx(\"p\", null, \"The information contained in this paper is for educational purposes only. No one, at any time, shall interpret any public statements, including this paper, made by any shareholder, director, executive, officer, or employee of \\u0192ractally LLC or its contractors as a binding commitment to do anything to raise the value of any crypto-currency token. Do\\nnot rely on the contents of this document when deciding to buy or sell any token.\\n\\u0192ractally reserves the right to change any aspect of this paper at any time and to choose to implement or not implement any of the ideas contained herein. The concepts described in this paper are experimental and may or\\nmay not produce the expected results if and when implemented. Actual results are subject to the quality of the people utilizing the proposed processes.\\n\\u0192ractally LLC is not soliciting investment and is not offering any securities for sale.\"), mdx(\"p\", null, \"\\u0192ractally - The Next Generation of DAOs 3\"), mdx(\"h1\", null, \"Abstract\"), mdx(\"p\", null, \"This paper provides a blueprint, strategy, and background rationale on how groups of\\npeople can cooperate to provide public goods and mutual aid. Each of us is better off when we can collaborate for mutual benefit. Collaboration is not a zero-sum game because the value of the whole can be greater than the sum of the individual contributions. The challenge all societies face is ensuring the vast majority of surplus value created by voluntary collaboration is realized by the contributors instead of a governing elite. If we make it profitable to contribute to public goods, then we will unleash a powerful force for human advancement. \\u0192ractally facilitates organic community growth and collaboration for the benefit of all.\"), mdx(\"p\", null, \"\\u0192ractally - The Next Generation of DAOs 4\"), mdx(\"h1\", null, \"Table of Contents\"), mdx(\"p\", null, \"Acknowledgements 3\\nLegal Disclaimer 3\\nAbstract 4\\nWhat is a DAO? 7\\n\\u211D.E.S.P.E.C.T 9\\nCommunity \\u211Despect 9\\nThe Value of an Opinion 10\\nEvidence of Transfer vs Intent to Transfer 11\\nGood Governance vs No Governance 11\\n\\u211Despect Tokens 12\\nCompanies vs DAOs 13\\nEarning \\u211Despect 15\\nAttend Meetings 15\\nPost Respectfully 16\\nTeam Up 16\\nProvide Liquidity 16\\nRecruit the Best 16\\nHODL \\u211Despect 17\\nRespect Flow Diagram 17\\nWeekly Consensus Meetings 19\\nSchedule 19\\nRespect Distribution 22\\nUltimatum Game 24\\nParty Ultimatum 25\\nGroup Size 25\\nTeams 27\\nJoining a Team 28\\nAllocating a Team\\u2019s Respect 28\\nLeaving a Team 28\\nMedia Rewards 29\\nHODL \\u211Despect 32\\nMarket Making Rewards 33\\n\\u0192ractally - The Next Generation of DAOs 5\\nRecruitment Rewards 37\\nCommunity Size Limits 37\\nExtended Community 38\\nPruning Community Size 38\\nFractal Growth of Community 39\\nGovernance 39\\nBootstrapping a \\u0192ractal 41\\nIs \\u211Despect a Security? 41\\nAragon Comparison 42\\nOptimistic Governance 42\\nAragon Court 43\\nPareto Problems 44\\nThe Tragedy of the Commons 45\\nRational Ignorance 45\\n\\u0192ractally Consensus Building 45\\nThe Bottom Line 46\\n\\u0192ractally LLC 46\\nGlossary of Terms 48\\n\\u0192ractally - The Next Generation of DAOs 6\"), mdx(\"h1\", null, \"What is a DAO?\"), mdx(\"p\", null, \"DAO stands for Decentralized Autonomous Organization. The description \\u201Cdecentralized and autonomous\\u201D was originally coined by \\u0192ractally\\u2019s founder, Daniel Larimer, in 2013, to describe the economics of Bitcoin. Larimer described Bitcoins as \\u201Cshares\\u201D in a decentralized company which issued shares in exchange for hashpower.\\nIf someone wanted to organize humans to autonomously produce highly efficient computer chips for performing a specific task (sha256 hashing), then it is hard to deny the success of Bitcoin. Without any governing structures or centralized coordination millions of people cooperated to build the largest distributed supercomputer in the world. This process is on \\u201Cautopilot\\u201D and \\u201Cunstoppable\\u201D as long as people valued the currency and respected the algorithm.\"), mdx(\"p\", null, \"The critical ingredient to being autonomous is being sovereign over information. Bitcoin,\\nwhen viewed as a company, can make no promises, hold no secrets, and hold no assets that it is not fully self-sovereign over. By \\u201Cfully self-sovereign\\u201D it means they are solely subject to the Bitcoin consensus algorithm.\"), mdx(\"p\", null, \"A DAO is therefore consensus over information and can never be destroyed unless all copies of the information are destroyed. In the digital age, destroying all copies of anything is next to impossible.\"), mdx(\"p\", null, \"When it comes to \\u201Cgoverning a DAO\\u201D, the information is \\u201Cforked\\u201D and two copies of the\\ninformation are created, each of which being fully complete, one of which has a different\\nopinion on some part of the information. The free market, via voluntary exchange, resolves\\nthe dispute according to the value placed on each version of the consensus information.\\nOne or both sides of the fork can continue and are fully functional. This is the true test of a DAO.\"), mdx(\"p\", null, \"We can therefore say that a DAO is pure information, the value of which is judged by the market. A DAO only depends on the freedom of speech and the open source software to\\ndeterministically interpret that speech into a shared consensus.\"), mdx(\"p\", null, \"A DAO has no assets that can be seized, no laws it is subject to. A DAO is nothing more\\nthan a shared idea and is therefore bulletproof. If an organization depends upon secrets,\\nthen those secrets are centralized and the keeper of those secrets is not bulletproof. If an\\norganization depends upon \\u201Cshared ownership\\u201D of tangible property, then it is not a DAO,\\nbecause the property could be taken or destroyed. If an organization depends upon any\\ninformation it is not sovereign over, then it is not a DAO.\"), mdx(\"p\", null, \"For example, \\u201CThe DAO\\u201D, an Ethereum smart contract, raised a record amount of Ethereum\\ntokens to be managed in a \\u201Ccollective investment scheme\\u201D governed by another token.\\nDespite the name (\\u201CThe DAO\\u201D), we contend that it was merely a smart contract operating\\nunder Ethereum. Ethereum being a DAO while, \\u201CThe DAO\\u201D, was merely a transparent, smart\\ncontract operated, collective investment scheme. When the smart contract was exploited it forced the entire Ethereum blockchain to fork in order to resolve the dispute. This fork\\nbecame known as Ethereum Classic.\"), mdx(\"p\", null, \"A smart contract is only as decentralized and autonomous as it is independent. If \\u201CThe DAO\\u201D had no shared state with Ethereum (the ETH balances), then there would be no way for an Ethereum fork to change \\u201CThe DAO\\u201D and \\u201CThe DAO\\u201D would have had to fork itself if there was any dispute.\"), mdx(\"p\", null, \"The transparency and independence of information is what makes a DAO \\u201Cautonomous\\u201D, but what makes it decentralized? A DAO is decentralized when it continues to function\\nregardless of what any subgroup of people do. As long as some people value the\\nconsensus state of Bitcoin, someone, somewhere, will do the proof of work necessary to\\nkeep the blockchain moving forward. If, on the other hand, people only value Bitcoin\\nbecause of what Satoshi or a centralized team is doing to bring value to the consensus\\ninformation then it becomes centralized.\"), mdx(\"p\", null, \"Steem, the first social media DAO, had incentives that inspired the community to fork Hive\\nwhen the founding company, Steemit, was sold and the new owner attempted to take the\\nnetwork in a different direction. The information being transparent, combined with the ability for anyone to step up and provide services around the information is what made it\\ndecentralized and autonomous. No matter what comes, the organization will keep going.\"), mdx(\"p\", null, \"This is what defines a DAO.\"), mdx(\"ul\", null, mdx(\"li\", {\n    parentName: \"ul\"\n  }, \"No Secrets (e.g. communally owned private keys)\"), mdx(\"li\", {\n    parentName: \"ul\"\n  }, \"No Legal Standing\"), mdx(\"li\", {\n    parentName: \"ul\"\n  }, \"No Tangible or Intangible external Assets\"), mdx(\"li\", {\n    parentName: \"ul\"\n  }, \"No Intellectual Property\"), mdx(\"li\", {\n    parentName: \"ul\"\n  }, \"No Monopolies on Infrastructure\"), mdx(\"li\", {\n    parentName: \"ul\"\n  }, \"Just consensus over forkable Information\")), mdx(\"p\", null, \"If a DAO can inspire the creation of the world's largest supercomputer powered by\\nextremely advanced custom silicon chips, what else can a DAO do? Can it create a new\\nlegal system? Can it motivate a surge in innovation, creativity, and open source software\\ndevelopment? Can it find cures to diseases? Can it end corruption? What if a DAO powered by the right governance process could do all these things and more? \\u0192ractally is creating a system that we believe has the potential to revolutionize how people realize the value created with the power of collaboration.\"), mdx(\"h1\", null, \"\\u211D.E.S.P.E.C.T\"), mdx(\"p\", null, \"Respect means to value someone or something. You can respect the property of others. You can respect the work other people do. Even if you don\\u2019t respect the character qualities of a person, you can still respect what they produce.\"), mdx(\"p\", null, \"Consider the act of serving the poor in a soup kitchen. This act is generally respected. The person who volunteers is generally respected for their service. However, if the server is paid to feed the poor, then the respect is typically accrued to the donor who paid the server rather than the individual providing the service.\"), mdx(\"p\", null, \"We value people. We respect their talents, their character, and their honesty. We respect\\nthem just for being alive, and we respect their potential. This is non-transferable respect. A person can eat healthy, train, and pursue personal growth. This may increase the amount of non-transferrable respect one person has for another. A person can also lie, cheat, and steal and lose non-transferrable respect. This kind of respect can also be viewed as reputation. More accurately, we value (aka respect) someone because of their reputation.\"), mdx(\"p\", null, \"That said, money can be viewed as a measure of respect someone has earned for past\\ncontributions to a community. We value money because others value money. Money is\\ntherefore respected. When money transfers hands, one person loses this measure of\\ncommunity respect and another person gains it. When you sell a product that someone in\\nthe community values, you earn respect. Note that all \\u201Cproperty\\u201D, of any form, is a measure\\nof respect. Theft of \\u201Cproperty\\u201D is a form of disrespect. Property and \\u201Cownership\\u201D are simply ideas that express a peace treaty among cooperative beings to end the war of all against all under the law of the jungle where might makes right. Respecting the idea of property is therefore respecting others.\"), mdx(\"h2\", null, \"Community \\u211Despect\"), mdx(\"p\", null, \"\\u0192ractally empowers a community to reach a consensus on the merits of each individual\\u2019s\\ncontributions and rewards them with the \\u211Despect they are due. In this case, \\u211Despect is\\nsynonymous with community money or currency.\"), mdx(\"p\", null, \"Most countries have their own money and regardless of what name they give to their\\nmoney, it is still money. BTC and ETH are the \\u201C\\u211Despect\\u201D of their respective communities.\"), mdx(\"p\", null, \"Each \\u0192ractally community, which we call a \\u0192ractal, will have its own form of \\u211Despect.\\nHow we characterize \\u211Despect and community money has huge legal implications. Is\\n\\u211Despect a contract, an obligation, a commodity, or an opinion? Is it the property of a person or the opinion of other people? Is it something you \\u201Cown\\u201D or is it something bestowed upon you? Do you receive \\u201Cincome\\u201D or \\u201Closs\\u201D when someone\\u2019s opinion about you changes or only when tangible things change hands? Can someone be forced to hold a particular opinion?\"), mdx(\"p\", null, \"Most people think of money as a thing that belongs to a person. For example, Ludwig von\\nMises defined money as the most marketable commodity . However, in \\u0192ractally, \\u211Despect\\nisn\\u2019t a thing; it\\u2019s an opinion. While you may respect (value) something, others may have a\\ncomplete lack of respect for it. If \\u211Despect is a measure of community consensus on the\\nrelative value of individual contributions then \\u211Despect remains a consensus opinion of the\\ncommunity, not the property of an individual.\"), mdx(\"p\", null, \"Free market prices are one means of discovering the relative \\u211Despect (value) for various\\ngoods and services. For example, you may own a stock that has a certain value (measured in \\u211Despect or money); however, other people can reach a new consensus that the stock is\\nworthless. This change in community opinion does not constitute \\u201Ctheft\\u201D, and the value of the stock isn\\u2019t the \\u201Cproperty\\u201D of the owner of the stock.\"), mdx(\"p\", null, \"Some people might say that while the value of the stock isn\\u2019t property, the stock itself is still property. However, stock ownership, like all property, is a matter of consensus opinion. Did you acquire the stock fairly? Did you honor all of your agreements with respect to the stock? Who gets to decide these things? Is it not just a consensus opinion? In this case, the consensus is that the government, as elected, gets to decide. In other words, all titles to all things are in fact a consensus opinion. If the consensus opinion changed, you would find it difficult to retain control of your things.\"), mdx(\"h2\", null, \"The Value of an Opinion\"), mdx(\"p\", null, \"If \\u211Despect is just an opinion, does it have any value? Opinions can be valuable or they can be worthless depending upon the source. You likely value the opinion of your husband or wife far more than the opinion of a random drug addict. Expert opinions are often more valuable than the opinion of laymen. Likewise, the value of a community's collective opinion depends upon the reputation of a community and its ability to reach a respectable consensus. Therefore, a community's reputation is also a \\u0192unction of the reputation of the members of\\nthe community.\"), mdx(\"p\", null, \"2 a raw material or primary agricultural product that can be bought and sold\\n1 pun intended\"), mdx(\"p\", null, \"Predictability of outcome is a major component of building trust and therefore building the\\nvalue of \\u211Despect. A country that respects \\u201Cproperty rights\\u201D, has honest courts, and allocates government funds reliably, with minimal corruption and graft, will prosper. Thus, people will respect the opinion of its courts, they will follow its laws, and the people will prosper. Alternatively, a country that falls to corruption and spends the country into bankruptcy, loses the respect of people at home and abroad. The end result is currency devaluation and lawlessness. Hyperinflation is ultimately the result of a complete loss of respect for a currency.\"), mdx(\"h2\", null, \"Evidence of Transfer vs Intent to Transfer\"), mdx(\"p\", null, \"What is interesting about \\u211Despect being an opinion is that opinions can never be stolen. If\\nyou steal someone\\u2019s car keys, it doesn\\u2019t make the car yours. The government has a clear and unchanged opinion on who owns the title to the car. Traditional cryptocurrency makes the simplifying assumption that the car always belongs to the person who holds the keys. This simplifying assumption is made because it removes opportunities for disputes and\\ncorruption.\"), mdx(\"p\", null, \"Outside of the cryptocurrency world, people consider both objective and subjective facts\\nwhen determining the legitimacy of a transfer. For example, a transfer coerced at gunpoint is not generally considered legitimate; however, the Bitcoin community\\u2019s consensus algorithm would consider such a transfer to be legitimate in practice and provides no court of appeal.\"), mdx(\"p\", null, \"The proposed way to resolve this kind of theft of Bitcoin would be to track down the thief,\\narrest them at gunpoint, throw them in jail, convict them in court, and force them to return\\nthe Bitcoin. The Bitcoin protocol has no means to enforce the outcome of the trial without\\nthe threat of government violence against the key holder.\"), mdx(\"p\", null, \"Many in the Bitcoin community lost faith in the ability of people to reach an honest and\\nrespectable consensus. Instead, they have opted for an immutable set of rules that people\\nopt-in to. Everyone who holds Bitcoin implicitly agrees to these rules. Ownership of Bitcoin\\ngoes to those who can secure their keys while (optionally) stealing other people\\u2019s keys. It\\u2019s\\nthe law of the jungle, where might makes right.\"), mdx(\"h2\", null, \"Good Governance vs No Governance\"), mdx(\"p\", null, \"\\u0192ractally thinks differently: we believe that good governance is the foundation of sound\\nmoney. If a protocol provides only objective consensus, then a community will unavoidably\\ninstitute a parallel and overriding subjective governance system. This is what happened\\nwhen Ethereum forked from Ethereum classic. If the subjective governance system is\\ncorrupt, then it may outlaw and/or frustrate the use of objective money such as Bitcoin. It\\nwill classify, confiscate, regulate, and otherwise control who can own Bitcoin and when.\"), mdx(\"p\", null, \"Suppose a whistleblower has a Bitcoin account and a corrupt government seizes his\\ncomputers, takes his Bitcoin, and then auctions the Bitcoin to fund the government. The\\nbroader Bitcoin community would largely consider this outcome just and hold the opinion\\nthat the government and those who bought the Bitcoin at auction are now the legitimate\\nowners and worthy of respect in the market.\"), mdx(\"p\", null, \"However, if Bitcoin balances really were the collective opinion of property rights respecting people then the government\\u2019s theft of a whistleblower's Bitcoin would not be recognized. After a respectable process, the community would be able to return the Bitcoin to the whistleblower while the corrupt government and those who participated in the purchase of the stolen Bitcoin would lose community respect.\"), mdx(\"p\", null, mdx(\"strong\", {\n    parentName: \"p\"\n  }, \"A respectable process, carried out by people with integrity, is the key to good governance and sound money\"), \". This is a challenge given how difficult it can be to keep the bad guys out of power. Central banks and the governments that charter them allocate new currency to fund insiders, war, special interests, and to buy off everyone they need to maintain their incumbent advantage. \\u0192ractally gives us a new system of governance that returns power over the allocation of community \\u211Despect to all community members.\\n\\u0192ractally leverages the wisdom of the crowds to mitigate rational ignorance, incumbent\\nadvantage, voter fatigue, and the bias created by the Pareto distribution of fame and fortune.\"), mdx(\"p\", null, \"Join \\u0192ractally and help us bring true democracy to communities around the world, so we\\ncan realize a more productive world without politicians, political parties, or overt incumbent advantage! We can fix our broken systems\\u2013 but we must work together to reach a consensus first.\"), mdx(\"h2\", null, \"\\u211Despect Tokens\"), mdx(\"p\", null, \"You can earn respect, give respect, lose respect and hold respect, and now, with \\u0192ractally,\\nyou can finally HODL \\u211Despect. The one thing you can\\u2019t do is steal \\u211Despect. \\u211Despect is a\\nsymbol of the trust a community has for the person who receives it. When a person holds\\n\\u211Despect (instead of selling it), it is an expression of their trust in the community and the\\ncommunity's appreciation for an individual's contribution to the community.\\n\\u0192ractally empowers people to come together, reach consensus, and build trust. This trust is expressed through the value of their currency, \\u211Despect. The more trust a community builds, the more valuable its \\u211Despect becomes.\"), mdx(\"p\", null, \"\\u211Despect is a real currency of the people, by the people, and for the people. The distribution of \\u211Despect is the collective opinion of the community. No one is entitled to \\u211Despect and the community is free to change its opinion at will (through a respectable process). \\u211Despect cannot be stolen because no one, not even governments, can change a community\\u2019s opinion against its collective will. \\u211Despect is not the \\u201Cproperty\\u201D of the \\u201CHODLer\\u201D it is an expression of the opinion of the community.\"), mdx(\"p\", null, \"A community and its currency thrive when people value the community\\u2019s \\u211Despect (opinion).This is achieved when a fair governance process is adopted and corruption is systematically rooted out. Hyperinflation is the result of people placing no value in the government\\u2019s opinion on who should receive new currency.\\n\\u211Despect is voluntary and confers no contractual rights or obligations between the giver and receiver (i.e. not a security). When someone HODLs the community\\u2019s \\u211Despect, others who value the community\\u2019s \\u211Despect may do more things for them in the future.\\n\\u211Despect can be transferred from one person to another; however, it is always held in the\\nopinion of the community. A signed transfer is merely one way to change the opinion of the community.\"), mdx(\"h2\", null, \"Companies vs DAOs\"), mdx(\"p\", null, \"Traditional companies and organizations are operated by a board of directors elected by\\nshareholders. The shareholders are Pareto-distributed which means, typically, 1% of\\nshareholders effectively control 51% of the voting rights and 51% of the voting rights is often enough to convey 100% of control. Furthermore, most day-to-day decisions are delegated from the board to a single CEO who sits on top of a pyramid of power.\"), mdx(\"p\", null, \"A DAO turns the power upside down and gives it to the employees/customers. In the case\\nof Bitcoin, miners make objective contributions and the work produced is judged objectively based upon the difficulty in finding a hash. The tokens, aka Bitcoin, have no voting rights. \", mdx(\"strong\", {\n    parentName: \"p\"\n  }, \"A \\u0192ractally DAO, aka a \\u0192ractal, replaces objective proof of work with subjective proof of work.\")), mdx(\"p\", null, \"Prior attempts at creating DAOs used token-weighted voting which caused them to mirror a corporate structure. \\u0192ractals are different: their \\u211Despect is more like Bitcoin and conveys no voting rights.\\nAll power in a \\u0192ractal is derived from the contributors. Like Bitcoin, the more the contributors work and produce value respected by other contributors, the more \\u211Despect they earn.\"), mdx(\"h2\", null, \"Earning \\u211Despect\"), mdx(\"p\", null, \"There are hundreds of communities out there that need people to contribute their time and attention for the greater good. Whether you want to organize a political party, start a mutual aid society, share the gospel, or clean up the ocean, \\u0192ractally empowers autonomous communities to reach a consensus on how to give the \\u211Despect due to everyone\\u2019s contributions.\"), mdx(\"p\", null, \"\\u211Despect is initially allocated proportional to community growth. Assuming a fixed size\\ncommunity, the inflation model is a fixed amount of \\u211Despect per week or 6% annually\\nwhichever is greater. The relative quantity of earned \\u211Despect will scale to maintain the fixed annual supply increase of 6%. This mandatory minimum recognizes that present\\ncontributions are necessary to maintain community growth and that the value of historic\\ncontributions will decay with time. Different \\u0192ractals may have different policies and they\\nshould all remember the principle that present contributions are more valuable than historic contributions.\"), mdx(\"h3\", null, \"1. Attend Meetings\"), mdx(\"p\", null, \"\\u0192ractally rewards those who are proactive in doing things for the community. This effort is\\nthen recognized and accounted for after the fact. Is there something you think you can\\ncontribute to a community? Go for it and you can start earning the \\u211Despect you deserve.\\nOnce you join a community that shares your values, you can immediately start earning the\\n\\u211Despect of your community by simply attending a 1-hour video conference and reaching a\\nconsensus with five other randomly selected community members. Whether you are a\\ndeveloper, marketer, blogger, YouTuber, event organizer, graphic designer, networker, lawyer, CEO, doctor, priest, or farmer, there is a place for you to contribute to a \\u0192ractally community.\"), mdx(\"p\", null, \"The more a community values your contributions, the more \\u211Despect you earn.\\nYour opinion matters. Every week you get to share your opinion with 5 random members\\nand get a say over how the community collectively respects their contributions. Over time\\neveryone in the community gets to hear what you respect. Everyone has an incentive to\\nnegotiate with you in weekly meetings because 4 out of 6 people agree or no one earns\\n\\u211Despect. \", mdx(\"strong\", {\n    parentName: \"p\"\n  }, \"There is no other system where your voice has so much influence over how the community allocates its \\u211Despect.\")), mdx(\"h3\", null, \"2. Post Respectfully\"), mdx(\"p\", null, \"If you don\\u2019t want to attend weekly meetings, you can still earn by making contributions in the form of social media posts. These posts can have direct value to the community or they can document your indirect contributions. The more people who like (aka respect) your content the more \\u211Despect you earn. \\u0192ractally ensures that only real and active contributors can vote.\"), mdx(\"p\", null, \"If you liked the idea behind Steem or Hive then you will love how \\u0192ractally community\\ngovernance takes content rewards to the next level. Unlike prior systems, \\u0192ractally is\\nresistant to bots and Sybil attacks.\"), mdx(\"h3\", null, \"3. Team Up\"), mdx(\"p\", null, \"People get more done when they are on a team. \\u0192ractally encourages everyone to join a\\nTeam by granting their Team matching \\u211Despect for every \\u211Despect earned by the Team\\nmembers in other activities such as weekly meetings, posting, etc. Teams can have 4 to 12 members who must reach a consensus on how to distribute team funds among the team members.\"), mdx(\"h3\", null, \"4. Provide Liquidity\"), mdx(\"p\", null, \"When you fund an automatic market maker between two \\u0192ractals, you help connect\\ncommunities and are simultaneously staking your tokens for 6 days (144 hours). In addition to earning market maker fees, one or more \\u0192ractals are also subsidizing the liquidity which increases the \\u211Despect you earn. While providing liquidity, a member has an economic interest in two different communities and this interest ties everyone together for a stronger whole.\"), mdx(\"h3\", null, \"5. Recruit the Best\"), mdx(\"p\", null, \"A community is only as effective as its members; therefore, the most critical component of\\nsuccess is for a community to recruit the most passionate and competent contributors it can find. To provide this incentive, all community members earn a commission equal to 5% of any \\u211Despect earned by the people they invite.\"), mdx(\"p\", null, \"So if you recruit Joe and Joe earns 55 \\u211Despect in his first weekly meeting, then you would\\nearn 2.75 \\u211Despect and the person who recruited you would earn 0.13 \\u211Despect. If Joe never\\nearns anything, then no recruitment incentives are paid to you. If the people you recruit don\\u2019t show up or aren\\u2019t producing you have an incentive to encourage them to contribute.\"), mdx(\"h3\", null, \"6. HODL \\u211Despect\"), mdx(\"p\", null, \"When you HODL \\u211Despect of your favorite community, you are honoring everyone who has\\ncontributed to that community in the past and creating productive and mutually beneficial\\nincentives for more people to contribute in the future. Nothing aligns community interests\\nlike shared \\u211Despect. When you commit to HODL for 6 months, you earn even more \\u211Despect.\"), mdx(\"p\", null, \"We call HODLing \\u211Despect, \\u201Csponsoring\\u201D a community.\\n\\u201CGive, and it will be given to you. A good measure, pressed down, shaken\\ntogether, and running over, will be poured into your lap. For with the measure you\\nuse, it will be measured to you.\\u201D - Luke 6:38\"), mdx(\"p\", null, \"Respect Flow Diagram\\nThe following diagram shows how respect flows from account to account through the\\nsystem. All \\u211Despect starts out as \\u201Cpending \\u211Despect\\u201D, meaning that it is not yet issued nor\\nconsidered part of the \\u211Despect supply. The \\u211Despect amount indicated on the diagram are\\n\\u201Crelative\\u201D and are subject to the community consensus of each \\u0192ractal.\"), mdx(\"p\", null, \"All \\u211Despect earned from any source (except market making), flows into a pending \\u211Despect\\naccount. At most 5% of the pending \\u211Despect can be converted to actual issued \\u211Despect per week and only once per week. An account that waits 20 weeks can convert 100% to issued\"), mdx(\"p\", null, \"\\u211Despect. Upon conversion, 5% is transferred to the inviter\\u2019s pending \\u211Despect account.\\nThis pending \\u211Despect account serves as a bond which the community can levy fines against via the governance process. It also serves as an automatic staking mechanism to ensure those making governance decisions have skin in the game.\"), mdx(\"h3\", null, \"Weekly Consensus Meetings\"), mdx(\"p\", null, \"The idea of a weekly meeting is similar to the standup meetings held by many companies.\\nAll employees are used to attending weekly meetings and expect to get paid for doing so. It is no different with members of a \\u0192ractal.\"), mdx(\"p\", null, \"The purpose of the weekly meeting is to build consensus on the rank-order value of each\\nindividual's contribution to the \\u0192ractal\\u2019s cause. Rank-order means sorting from greatest to\\nleast. 4 out of 6 or 3 out of 5 must agree or no one earns anything.\"), mdx(\"p\", null, \"The highest ranked individual from each of the groups is sent to the next round where the\\nprocess is repeated in a \\u0192ractal manner (aka \\u0192ractally). This process is repeated up to 5 times or until there are less than 6 people in a round.\"), mdx(\"p\", null, \"Schedule\\nAll groups in a round meet at the same time. This prevents one person from having multiple accounts and attending multiple meetings. The community governance process determines the schedule for the meetings.\"), mdx(\"p\", null, \"83% of the participants are only required to attend for 1 hour. 13% are required to attend for 2 hours and 2.3% are required for 3 hours. There is a 15 minute break between 1 hour sessions.\"), mdx(\"p\", null, \"For really large \\u0192ractals it may take 4 or 5 hours for the top 1% of most valuable members,\\n\\u0192ractally - but these members are also earning significantly more for their time. If you use a corporate analogy, higher level management spends more time in meetings to reach consensus than lower level employees.\"), mdx(\"h3\", null, \"Checkin\"), mdx(\"p\", null, \"To operate efficiently and prevent empty groups from \\u201Cno shows\\u201D, everyone must check-in\\nduring the 10 minutes before the start of the meeting. This involves opening the \\u0192ractally\\napplication and visiting the meeting page. Everything from here is automatic.\"), mdx(\"p\", null, \"Only those who check-in are assigned to groups. With the check-in process, there should be very few people who are unable to join their assigned meeting and very few groups that have 5 members instead of 6.\"), mdx(\"p\", null, \"At the time of check-in a secret hash is submitted to the blockchain. After the check-in\\nwindow closes every client has 2 minutes to reveal their secret. Only those who reveal their secret will participate in the meetings. The random groupings will be assigned based upon the collective hash of all revealed secrets. Each person is thereby given the power to\\nchange a single bit of randomness by waiting for \\u201Ceveryone else to submit\\u201D and then\\ndeciding whether to reveal or opt out. For all practical purposes this ensures mathematically provable honest shuffling of the groups.\"), mdx(\"h3\", null, \"Introductions\"), mdx(\"p\", null, \"If a meeting starts at 6:00 PM, then everyone is expected to join the meeting by 6:05 PM.\\nThese first 5 minutes are reserved for working out any connectivity, video, and audio issues. People can also introduce themselves while waiting for everyone to join. Anyone who fails to join the video call within 5 minutes should automatically be the lowest rank in the resulting consensus. If more than two people are late, then the latest member should rank lowest.\"), mdx(\"p\", null, \"This will be subjectively enforced by each group and any group that fails to enforce this\\npromptness rule may be held accountable by the governing Council. Established\\ncommunities should adopt a preamble (purpose) & an operating framework (rules such as\\npromptness rule) as part of their initial construction. The recorded video call should provide all the objective evidence of tardiness required. The user interface will also enforce these rules which should make it exceedingly difficult for a random group of 4 people to utilize an alternative method of reporting a different consensus.\"), mdx(\"h3\", null, \"Presenting Work & Reaching Consensus\"), mdx(\"p\", null, \"In each meeting, people are given a 5 minute time slot to present their contributions. After\\nall presentations are made, the group has 25-30 minutes to reach a consensus on how to\\nrank each member from highest to lowest. These rules are subjective and enforced via the\\npeer review part of the process.\"), mdx(\"p\", null, \"Individuals can advocate for their individual contributions as well as the contributions of the Team they have joined because the Team will receive 50% of the \\u211Despect earned by the individual.\\nThe group can use any process they like to reach consensus so long as everyone agrees by the end of the 1 hour window. \\u0192ractally intentionally avoided implementing a voting and\\ntallying system because all such systems encourage people to \\u201Cvote strategically\\u201D instead of honestly. Instead the meeting should be a back and forth discussion and negotiation.\\nThe lack of a \\u201Cvoting\\u201D system means that people are forced to build trust that everyone is in agreement so that they can accurately report their opinion on the consensus. Building trust is a vital part of strong communities and identifying those who violate trust is critical to securing the integrity of a community.\"), mdx(\"h3\", null, \"Proof of Consensus - Two Phase Commitment\"), mdx(\"p\", null, \"Once consensus is reached, all members report to the blockchain with a two-phase commit. First they submit a salted hash of the consensus opinion; then, after everyone has committed, everyone reveals the consensus rank order. This process will be automated by the user interface.\"), mdx(\"p\", null, \"The purpose of the two-phase commitment is to prove that consensus was actually\\nreached. Anyone who wasn\\u2019t part of the video call and any automated systems would not\\nknow how to report in. Furthermore, this is not a \\u201Cvote\\u201D on what each individual thinks the\\norder \\u201Cshould be\\u201D, but rather, the mutual reporting of the shared consensus. At least 4 of 6 or 3 of 5 must report and agree. Anyone who doesn\\u2019t report a consensus aligned with the\\nmajority does not earn any \\u211Despect. In practice, this means that all people will report the\\nsame order.\"), mdx(\"h3\", null, \"Peer Review\"), mdx(\"p\", null, \"At the end of each call, members can rate their experience with the other members.\\nMembers who monopolize the call by talking too much, or are combative, rude, etc. should\\nreceive a low rating. Members who are friendly, polite, courteous, and pleasant to work with should get a high ranking. Over time everyone will be rated by everyone else and these ratings can serve as evidence for toxic individuals whom the community may want to consider removing.\"), mdx(\"h3\", null, \"Meeting Times\"), mdx(\"p\", null, \"The governing Council of each community (more on this later) has the power to set the day and time of each round of the weekly meetings. Communities that want to prevent\\nmembers from dual membership should consider scheduling at the same time as the\\ncompeting community. \\u0192ractals that encourage dual membership may wish to schedule\\ntheir meetings on different days and times.\"), mdx(\"h2\", null, \"Respect Distribution\"), mdx(\"p\", null, \"The following table shows how new \\u211Despect is allocated based on consensus meetings.\"), mdx(\"h3\", null, \"Round 1\"), mdx(\"p\", null, \"Member Contribution Rank Round 1 \\u211Despect Earned\\nRank 1 - Least Contribution 2 \\u211D\\nRank 2 3 \\u211D\\nRank 3 5 \\u211D\\nRank 4 8 \\u211D\\nRank 5 13 \\u211D\\nRank 6 - Greatest Contribution 21 \\u211D\"), mdx(\"p\", null, \"The contributors of the first round rank 1-6. Everyone at rank 6 of round one participates in the second round and 5 of the 6 participants in that second round get promoted to higher ranks (7-11). Because membership is not a multiple of 6, some groups will have only 5 members. In that case, the ranking is 2 through 6 and no one receives a rank of 1 from this group.\"), mdx(\"p\", null, \"This distribution pattern follows the Fibonacci sequence which is commonly found in nature. Under this sequence, 16% of the participants in the first cycle earn about 40% of the compensation. This is a softer form of the 80/20 Pareto principle.\"), mdx(\"h3\", null, \"Round 2\"), mdx(\"p\", null, \"After the first round, those members who rank highest are then randomly grouped into a\\nsecond round. In this round, the Fibonacci sequence continues.\"), mdx(\"p\", null, \"Respect Earned\\nMember Contribution Rank - Round 2 Current Round Prior Round (1) Net Increase\\nRank 6 - Least Contribution 21 \\u211D 21 \\u211D 0 \\u211D\\nRank 7 34 \\u211D 21 \\u211D 13 \\u211D\\nRank 8 55 \\u211D 21 \\u211D 34 \\u211D\\nRank 9 89 \\u211D 21 \\u211D 68 \\u211D\\nRank 10 144 \\u211D 21 \\u211D 123 \\u211D\\nRank 11 - Greatest Contribution 233 \\u211D 21 \\u211D 212 \\u211D\"), mdx(\"p\", null, \"Note these are cumulative rewards meaning the net increase in the second round is 0 (21-21) for the least and 212 (233-21) for the greatest. The goal is to rank-sort all contributors and to have their reward grow according to Fibonacci.\"), mdx(\"h3\", null, \"Round 3\"), mdx(\"p\", null, \"Respect Earned\\nMember Contribution Rank - Round 3 Current Round Prior Round (2) Net Increase\\nRank 6 - Least Contribution 233 \\u211D 212 \\u211D 21 \\u211D\\nRank 7 377 \\u211D 212 \\u211D 165 \\u211D\\nRank 8 610 \\u211D 212 \\u211D 398 \\u211D\\nRank 9 987 \\u211D 212 \\u211D 775 \\u211D\\nRank 10 1597 \\u211D 212 \\u211D 1385 \\u211D\\nRank 11 - Greatest Contribution 2584 \\u211D 212 \\u211D 2372 \\u211D\\nThis process will continue until there are fewer than 6 people or up to 5 rounds.\\nIn the event any group fails to reach a consensus, they receive \\u211Despect based upon the\\nconsensus of the last group in which they were able to reach consensus. In other words,\\ninstead of 5 of the 6 people being promoted from Rank 11 to Ranks 12-16, everyone would\\nremain at Rank 11. Consensus failure in the first round results in a Rank of 0 and no \\u211Despect earned.\"), mdx(\"p\", null, \"Anyone who submits a consensus report that disagrees with the majority will also receive Rank of 0 irrespective of the group\\u2019s actual consensus.\"), mdx(\"h2\", null, \"Ultimatum Game\"), mdx(\"p\", null, \"There is a well-known economic experiment known as the Ultimatum Game,\\n. In this experiment, one person is given $100 and asked to share some part of it with another player. The other player then has the option to accept or reject the offer. If the offer is rejected then neither player gets to keep the money. If it is accepted then both players get to keep it. In numerous experiments, it was found that offers below $30 were routinely rejected even though $30 is better than nothing. The actual results varied from culture to culture which indicates that \\u0192ractals will likely work best when composed of people from a similar culture.\"), mdx(\"p\", null, \"When asking a group of people to reach a consensus or get nothing, we face a similar\\nproblem. If you put six people in a room and all of them believe they have made equal\\ncontributions to a community, then they are likely to reject any consensus where they get\\nsignificantly less than someone else. By following the Fibonacci sequence, any two\\nconsecutively ranked contributors agree to a 38/62 split in the award and are therefore\\nlikely to reach consensus even if they both feel a 50/50 split would be fairer. The more\\nstubborn individual would likely get 62%. Furthermore, the group winner receives about 40% while the rest, the runner-ups, collectively get 60%. This means that if you can view the runner-ups as one logical person agreeing to the proposed split and the winner as being asked to accept or reject, the winner would still accept even if no one else did anything to deserve their compensation.\"), mdx(\"p\", null, \"In a hypothetical situation where all members contributed an objectively equal amount, they would have to decide between everyone getting nothing or allowing others to get more. Chances are they would find some basis, perhaps even random chance, to reach a\\nconsensus on the order rather than everyone getting nothing. Over multiple iterations of this process, the community should correct for any past imbalances.\"), mdx(\"p\", null, \"Any individual who is consistently part of groups that fail to reach consensus is automatically removed from the community. This creates a bias toward building a consensus instead of rejecting an unfair outcome. Those who are persistently stubborn would be naturally filtered out to prevent them from griefing others. The proposed threshold for automatic removal is failing to reach consensus 5 out of 10 consecutive weeks. Over a 20 week average, an individual needs to reach a consensus 67% of the time to remain in the governing community.\"), mdx(\"p\", null, \"When you consider mimicking nature with Fibonacci, applying the experimental results from the Ultimatum Game, and the Pareto Principle rule of thumb, we discover three metrics in alignment which is a good indication the system may be balanced and aligned with human nature.\"), mdx(\"h2\", null, \"Party Ultimatum\"), mdx(\"p\", null, \"One of the potential outcomes of this game is that approximately 50% of the population\\nattempts to form a political party. This party attempts to demand that their members rank in the highest 3 spots of every group of 6 and everyone else gets the bottom 3 ranks. To back this demand, they threaten to block consensus and force everyone to get nothing. In this game, the stubborn half takes 81%, and the passive half takes 19% of the rewards. Based upon experiments with the Ultimatum Game experiment, the non-colluding parties are likely to reject the efforts of the colluding parties outright. That said, the colluding parties can bribe the first defector with the highest of the bottom 3 ranks.\\nBecause 67% are required to agree to make a consensus and it takes 50% to block a\\nconsensus. A two-party system would end up in a deadlock.\"), mdx(\"p\", null, \"The reality is that any political party attempting to collude and split the bounty would still\\nrequire an internal party governance system. This governance system is necessarily less\\ndemocratic than the \\u0192ractally process and would depend upon extreme party loyalty over\\nloyalty to the \\u0192ractal. If such a party could create a better governance process then it might just be beneficial for the entire community to adopt it. In any event, we speculate that the incentive to form a minority party is relatively small relative to the gain party members might expect from the attempted collusion.\"), mdx(\"h2\", null, \"Group Size\"), mdx(\"p\", null, \"Eden had previously used groups of 5 people. \\u0192ractally has intentionally changed the target group size from 5 to 6 in order to prevent a 40% collusive party from holding a 60% majority hostage. Requiring 5 out of 7 to reach consensus would allow 42% to hold 58% hostage. Going to 4 out of 7 would only require a 57% for consensus, which is significantly below the byzantine fault tolerance (BFT) level of 67%. The next closest group size that maximizes BFT consensus and minimizes minority ultimatum is 6 of 9. The larger a group gets, the less efficient a conversation becomes. A few people will tend to dominate the conversation in large groups.\"), mdx(\"p\", null, \"In a paper titled \\u201CGroup Discussion as Interactive Dialogue or as Serial Monologue: The\\nInfluence of Group Size\\u201D, Nicolas Fay, Simon Garrod, and Jean Carletta studied the impact of group size on communication patterns. They identify two kinds of communication: dialog and monolog. In a dialog, members of a group discussion are likely to be most influenced by those with whom they interact, whereas in a monolog they are likely to be most influenced by the dominant speaker.\"), mdx(\"p\", null, \"This paper indicates that increasing group sizes beyond 5 tends to increase the likelihood of a monolog style discussion. Therefore, to maximize the influence of individual group\\nmembers, group sizes of 5-6 people are ideal. While we are designing based upon theoretically equal groups, the reality is that not all groups can have exactly 6 members (pigeon hole principle\\n). This means that in any given round up to 5 groups may only have 5 members depending upon how many check-in. It is possible for more than 5 groups to have 5 members and some groups to have less than 5 if some people check in but fail to show up in the meeting. When factoring in no-shows and remainders, the target group size needs to consider the consequences of two group sizes at the same time. So the options are 4-5, 5-6, 6-7, 7-8, or 8-9. Of these options, having some groups of 5 is better than having some groups of 4. With a group of 4, 3 of 4 must reach consensus (75%) and 2 of 4 (50%) can block consensus. If all groups could be groups of 4 then it would be a stronger consensus and easier dialog than if all groups could be groups of 6; however, in this case, some groups would end up being 3.\"), mdx(\"p\", null, \"After much consideration, a target group size of 6 with some groups of 5 was found to be\\nthe best compromise. The rule for consensus within each group is either 4 of 6 or 3 of 5. This means that it always takes at least 50% of the group to abort a consensus and at least 60% of a group to reach a consensus, with the vast majority of the time requiring 67% for consensus.\"), mdx(\"h1\", null, \"Teams\"), mdx(\"p\", null, \"Joining a Team is one of the fastest ways to make friends and start earning more \\u211Despect.\\n\\u0192ractally makes every effort to align with human nature. The book \\u201CBlueprint - the\\nevolutionary basis of a good society\\u201D by Nicholas A. Christakis provides a treasure trove of\\nuseful information about how human social cooperation functions. Teams of people who\\nengage in regular and repeated interactions have more incentive to cooperate than random individuals who only meet a couple times per year.\"), mdx(\"p\", null, \"Teams make everything more fun. People working together with a diverse set of skills are far more productive than the same number of people working independently. Teams enable managers, organizers, and leaders to bring together people with diverse talents to produce something collaboratively. Absent teams, it would be hard for a \\u201Cmanager\\u201D to communicate their less-visible contributions in weekly meetings. It would be hard for the more introverted, soft-spoken, individuals to compete with the more extroverted public speakers.\"), mdx(\"p\", null, \"Furthermore, teams working closely with a small group of people builds trust, provides\\naccountability, and facilitates the division of labor. It is far harder to review the work of a\\nrandom individual; however, if you are working as a team you have a far more intimate\\nknowledge of each other\\u2019s contributions.\"), mdx(\"p\", null, \"When team members attend a weekly meeting, they are advocating for both their individual contributions and the contribution of their entire team. Since team members are randomly distributed among all the groups this process amplifies the number of people reviewing your and your team\\u2019s activities each week.\\nWhile it is not necessary to join a team, doing so is the best way to get recognized for your contributions to the community.\"), mdx(\"h2\", null, \"Joining a Team\"), mdx(\"p\", null, \"Any active member may start a new team and ask others to join. Once a team has 4\\nmembers it can select a team leader with \\u2154 approval. The Team Leader is then eligible to\\nparticipate in global \\u0192ractal governance decisions. More information on the role of Team\\nLeaders is provided in the governance section of this paper.\"), mdx(\"h2\", null, \"Allocating a Team\\u2019s Respect\"), mdx(\"p\", null, \"From this point forward, the team qualifies to earn matching Respect for any Respect earned by its members. Each Team reaches its own consensus on how to divide the Team\\u2019s \\u211Despect. The way this works is that any team member can propose a transfer of team Respect to their personal account. Votes are then collected over the next 72 hours and as long as \\u2154 of the votes cast approve the transfer then it goes through. This means that if there is no objection, then a single vote is all that is necessary to allocate team funds. If \\u2154 of the team approves, then the transfer can occur immediately without further delay.\"), mdx(\"p\", null, \"If the transfer is rejected then the original person who proposed the transfer loses \\u211Despect held in their escrow account. More detail on the escrow account will be provided later. A team member without sufficient funds in their escrow account cannot propose transfers from the team account.\"), mdx(\"h2\", null, \"Leaving a Team\"), mdx(\"p\", null, \"If you would like to leave a team to join a new team, there is a mandatory 20 week waiting\\nperiod before you are removed from one team and are eligible to join a new team. This\\ncreates intentional friction that encourages teams to collaborate to work out their\\ndifferences rather than disband. It also causes people to think carefully before joining a\\nteam. This is based upon research described in \\u201CBlueprint\\u201D in which experiments\\ndemonstrate that people collaborate the most when there is friction associated with\\nchanging social ties.\"), mdx(\"h1\", null, \"Media Rewards\"), mdx(\"p\", null, mdx(\"strong\", {\n    parentName: \"p\"\n  }, \"\\u0192ractally can be viewed as a massively multiplayer collaborative budgeting system that seeks to identify and reward the best contributions to a cause.\"), \" Weekly meetings are not for everyone, so if you want to earn respect by contributing to the community without attending a weekly meeting, then posting rewards may be for you.\"), mdx(\"h2\", null, \"Historical Lessons Learned from Hive\"), mdx(\"p\", null, \"Steem/Hive was the first social media platform that rewarded people who posted content\\nwith tokens. Under Hive, users would stake their tokens (lock them up) for 3+ months and in exchange receive voting power proportional to their staked tokens. An assumption was\\nmade that large token holders would tend to vote in the best interest of the token price. By rewarding a post proportional to the square of the votes cast, we incentivize users to\\nconcentrate votes. Posts With above-average concentration would get the vast majority of the rewards. Either one large holder or an army of smaller holders could allocate rewards, but individuals acting alone or in small groups would not earn much.\"), mdx(\"p\", null, \"Turns out that vote-buying became pervasive and automated. Large holders could not be\\ntrusted to act in the best interest of all token holders. Smaller holders would frequently\\nchoose to rent their voting power and the vast majority of rewards intended for those who\\ncontributed quality content were instead allocated by algorithms as a convoluted form of\\nstaking rewards. Despite the abuse, there was still some signal in the noise and content\\ncreators could still earn.\"), mdx(\"p\", null, \"Hive allowed up and downvoting and would calculate the net vote before applying the\\nquadratic function. Eventually Hive adopted linear voting to \\u201Cdistribute tokens more evenly\\u201D, but it ultimately provided no opportunity cost for voting away from the consensus. This made vote buying even more profitable.\"), mdx(\"p\", null, \"Assuming all users had an equal vote weight, the last upvote cast would have the most\\nimpact on the reward and a single downvote would cancel it. For example, if a post had 3\\nupvotes, the reward would be 9 (aka 3^2) which represented an increase of 5 from 2 upvotes(4=2^2). The first downvote would therefore cost the poster 5. This made it very easy for angry or vengeful people to cause grief to other users. In effect, the net of up and down votes did not accurately reflect consensus opinion on whether the content was \\u201Cgood\\u201D, \\u201Cbad\\u201D or \\u201Cneutral\\u201D.\"), mdx(\"p\", null, \"If we are to improve upon Hive, then we will need to change the incentive structure to\\nprovide accountability and minimize the potential reward from vote buying. Ideally, those who attempt to buy votes and subvert the public good for private gain see losses and get\\nremoved from the community.\"), mdx(\"h2\", null, \"\\u0192ractally vote tally algorithm\"), mdx(\"p\", null, \"\\u0192ractally changes the algorithm such that the post-weight is equal to the sum of upvotes\\nsquared minus the sum of downvotes squared. This means that a post that has 3 upvotes\\nand 1 down vote would end up with a weight of 9-1 or 8. A post with 3 upvotes and 2 down votes would end up with (3\", mdx(\"em\", {\n    parentName: \"p\"\n  }, \"3-2\"), \"2=5). A post with more downvotes than upvotes would earn nothing. This means that a controversial post can still pay reasonably well even if votes are\"), mdx(\"p\", null, \"51 for and 49 against. In this case, a 51/49 split would pay similar to a 14/0 split.\\nLet Vp be the sum of the weighted likes on a post\\nLet Fp be the sum of the weighted dislikes on a post\\nLet Rp be the respect paid from the reward pool to a post\\u2019s author\\nLet M be the shared reward pool balance\\nLet i be the post index\\nLet n be the number of posts\\nPosts, but not comments, qualify to receive likes for 24 hours after posting.\"), mdx(\"h2\", null, \"Vote Weight\"), mdx(\"p\", null, \"While anyone can cast an opinion of whether the content contributes to the public good,\\nonly those who rank in the weekly meetings can contribute to the vote weight a post\\nreceives. This limitation prevents Sybil attacks and ensures voters are accountable. Each\\nweek a user\\u2019s voting weight decays by 5% or 1 unit (whichever is greater) and each week a\\nuser can have their voting weight grow by their rank in the weekly meetings. 16.6% of the\\nmembers receive a rank of 1, 16.6% a rank of 2, 16.6% a rank of 3, 16.6% a rank of 4, and 16.6% a rank of 5. 83% of all members have a rank from 1 to 5. 13.8% of the members have a rank from 6 to 11, 2.3% have a rank from 12 to 17, and .13% have a rank from 18 to 30.\"), mdx(\"p\", null, \"This weekly ranking is averaged over 12 weeks to provide a more stable vote weight linked\\nto an individual's average performance in weekly meetings.\"), mdx(\"h2\", null, \"Rate Limiting Posts\"), mdx(\"p\", null, \"Each \\u0192ractal has a limit on the rate of content creation, aka posts per day, to prevent spam\\nand allow the curators/voters to discover and review. Therefore, there is a cost to post.\\nThink of posts like Bitcoin blocks. On average one post is made every 10 minutes and the\\ndifficulty is measured as a cost in \\u211Despect. If more than 7 posts per hour are flowing in, the cost goes up 5%. If less than 5 posts per hour come in, the cost goes down 5%. The cost will adjust up or down every 6 posts or every hour, whichever comes first. 50% of posting fees are contributed to the content reward pool and the other 50% are returned to the poster if their post receives more upvotes than downvotes. If a post receives more downvotes than upvotes then 100% of the fee is contributed to the reward pool.\\nThis means that each poster is doing the economic calculus to determine whether they\\nbelieve their content will garner enough upvotes to overcome the cost of submitting a post.\\nThis allows anyone on the internet to submit content and earn the \\u211Despect of a \\u0192ractal.\\nEach \\u0192ractal can choose their own rate limits depending upon their objectives.\"), mdx(\"h2\", null, \"Rate Limiting Votes\"), mdx(\"p\", null, \"No one has the time to evaluate all content contributed and absent a rate limit, those who\\nemploy automated voting strategies will be able to cast more votes than those who do so\\nmanually. To provide some balance, users are allocated voting power which recharges to\\n100% linearly over 24 hours. Each time they vote they consume some of their voting power.\"), mdx(\"p\", null, \"Total post vote weight is the sum of each voter's Voting Power Consumed times their Voting Weight. You could cast five \\u201Csuper votes\\u201D using 20% of your vote power or you could cast 20 regular votes consuming 5% each or you could cast 100 micro-votes using 1% of your voting power. Up and downvotes are weighted equally. You cannot apply more than 20% of your voting power on a single post. The user experience will be like Medium\\u2019s long-clap where the longer you press the more power is applied.\"), mdx(\"h2\", null, \"Voting Abuse\"), mdx(\"p\", null, \"Hive experienced a problem where some voters would vote in ways intended to harm or\\nharass those honestly contributing to the public good. They would sell their votes. They\\nwould always vote for their friends and downvote everyone else. In general, they would use their voting power to extract as much value for their personal benefit as possible.\\nFortunately, anyone engaging in this kind of voting behavior will likely find themselves\\nranking far lower in the weekly consensus meetings and therefore their voting power will be greatly curtailed. Furthermore, the cost to submit a post places a minimum quality\\nexpectation which means the \\u201Chonest majority\\u201D can ensure that it is a loss-making endeavor to publish worthless content in an attempt to garner unearned votes.\"), mdx(\"h1\", null, \"HODL \\u211Despect\"), mdx(\"p\", null, \"Those who buy \\u211Despect are sponsoring one or more communities. When you make a\\nlong-term commitment to sponsor a community you can earn Sponsorship rewards. This\\ntakes the form of locking up \\u211Despect for 6 months and being given an increase in your\\n\\u211Despect. A percentage of all respect allocated by the weekly consensus meetings is paid to a reward pool. If there are no weekly meetings then the sponsorship reward pool is not\\nfunded. This means that sponsorship rewards are directly proportional to the increase in the \\u211Despect supply.\"), mdx(\"p\", null, \"To calculate the amount of Respect earned for sponsoring a community, we allocate a\\npercentage of the sponsorship pool proportional to the Respect locked up relative to the\\naverage amount of respect locked up in the past 6 months.\"), mdx(\"p\", null, \"For example, if on average 900R has been contributed to sponsorship in the past 6 months and the sponsorship reward pool has 333R in its balance, then a new sponsorship of 100R would earn 333 * 100 / (900+100) which is 33R after 6 months.\"), mdx(\"p\", null, \"The respect allocated to the sponsorship rewards after a weekly consensus meeting is\\ndistributed evenly over a 7 day period. This ensures a smooth adjustment and prevents any unfair advantage bots would gain from an instantaneous increase in the sponsorship reward pool.\"), mdx(\"p\", null, \"Some of the principles guiding this design are that sponsors should always know the\\nexpected yield at the time they commit and that the rate of return should be established by market forces.\"), mdx(\"p\", null, \"The person who invites a sponsor gets 5% of the reward. If there is no inviter, that 5% is\\nreturned to the pool. This creates incentives to invite people who will sponsor the\\ncommunity while providing no incentive to sponsor anonymously to avoid the 5% inviter\\nreward.\"), mdx(\"h1\", null, \"Market Making Rewards\"), mdx(\"p\", null, \"Each \\u0192ractal has its own Respect token and there is value to being able to easily convert\\n\\u211Despect in one community into \\u211Despect in another community. This requires some people\\nto hold \\uD835\\uDD44utual \\u211Despect in two communities.\"), mdx(\"p\", null, \"As the relative value of each \\u0192ractal\\u2019s \\u211Despect changes an automatic market maker can\\nrebalance to maintain equal value of respect in two \\u0192ractals.\"), mdx(\"h2\", null, \"Bootstrapping the Market Maker\"), mdx(\"p\", null, \"The Market Maker is a smart contract that allows anyone to bootstrap liquidity between two tokens by providing an initial deposit of both tokens in exchange for the initial allocation of Market Maker Tokens, which we call \\uD835\\uDD44utual \\u211Despect or \\uD835\\uDD44\\u211D.\"), mdx(\"h2\", null, \"\\uD835\\uDD44utual \\u211Despect Staking\"), mdx(\"p\", null, \"Holders of \\uD835\\uDD44\\u211D are able to convert to the underlying \\u211Despect tokens after a 144 hour delay. This delay gives market participants an opportunity to adjust to changes in liquidity and is there to future proof the market maker for more advanced leverage and option trading. The 144 hour delay also prevents abuse from those attempting to earn liquidity rewards by funding right before the liquidity reward is added and withdrawing right after.\\n\\uD835\\uDD44\\u211D is also a token which can be transferred and traded so people can provide liquidity\\nwithout actually giving up their own liquidity. This allows the creation of \\uD835\\uDD44utual \\uD835\\uDD44utual\\n\\u211Despect (\\uD835\\uDD44\\uD835\\uDD44\\u211D).\"), mdx(\"h2\", null, \"Distributed Liquidity\"), mdx(\"p\", null, \"There are many different models for providing liquidity. Traditionally, exchanges utilize a\\ncentralized approach where all tokens are traded against a common currency. To convert\\nfrom currency A to currency C you must flow through currency B. With an automated\\nmarket maker this would look like all \\u0192ractals linked to one central \\u0192ractal which everyone is exposed to. The central \\u0192ractal inherits disproportionate economic control over the value of the other \\u0192ractals.\"), mdx(\"p\", null, \"A decentralized approach looks like multiple centralized exchanges utilizing a number of fiat currencies. Under this approach the majority of liquidity still flows through central hubs. The \\u201Chub\\u201D currencies have far more economic power than the \\u201Cspoke\\u201D currencies.\"), mdx(\"h2\", null, \"Distributed Approach\"), mdx(\"p\", null, \"A distributed approach looks like a mesh blanket where every token is directly trading\\nagainst many other tokens. There are always multiple paths for converting from one\\ncurrency to another. When the value of one currency rises it pulls up the value of everything else connected to it both directly and indirectly.\"), mdx(\"p\", null, \"A distributed approach most closely mirrors the relational structures between people which are part of multiple \\u0192ractals. It also mirrors how people are organized geographically. You can view it like a network of roads connecting cities. This distributed approach maximizes the autonomy of each \\u0192ractal by freeing them from dependence upon any single hub currency.\"), mdx(\"p\", null, \"Left to their own devices, people tend to take the easiest path. The easy path results in the centralized currency providing liquidity to all other currencies. It is easy because it has the fewest number of \\u201Clines\\u201D where each line represents an automatic market maker. To get from point A to point B you always go through the hub, which makes decisions about how to convert easier.\"), mdx(\"p\", null, \"There is also an element of the \\u201Crich get richer\\u201D as liquidity attracts liquidity. If \\u0192ractals are\\nnot careful they will all end up subject to the governance of a single powerful currency.\\nTherefore, \\u0192ractally needs to provide a structure that ensures liquidity forms in a distributed manner. The system also needs to ensure that \\u0192ractals don\\u2019t attempt to provide liquidity to all other \\u0192ractals: a fully connected mesh. The fully connected mesh has the most lines and is the least efficient.\"), mdx(\"p\", null, \"\\u0192ractally encourages the creation of economic bridges (market makers) among the \\u0192ractals by subsidizing liquidity. Each \\u0192ractal must choose which peers to subsidize. If things were \\u201Cnegotiated\\u201D then both sides of the economic bridge would likely provide similar subsidies for liquidity. This \\u201Cbalanced subsidy\\u201D would tend toward a fully connected mesh as there is no need to \\u201Cfavor\\u201D one bridge over another. The biggest \\u0192ractals would be connected to almost everyone and liquidity would be too low over any single bridge.\\nOne way to prevent a fully connected mesh is to limit the number of peer \\u0192ractals that any\\nsingle \\u0192ractal sponsors liquidity with. For example, each \\u0192ractal could be limited to six to\\ntwelve peers. This limit would likely result in clusters of highly connected \\u0192ractals loosely\\nconnected to other clusters because most \\u0192ractals would seek reciprocal subsidy\\nrelationships with their peers. Furthermore, we want a system that disincentives the\\nformation of closed circles.\"), mdx(\"h2\", null, \"Rank-Order Liquidity Subsidies\"), mdx(\"p\", null, \"\\u0192ractally will allocate liquidity subsidies to those who hold \\uD835\\uDD44utual \\u211Despect in two\\ncommunities in a manner similar to the weekly meetings. The members will rank-sort the\\nmost valuable peer \\u0192ractals and then distribute \\u211Despect according to the Fibonacci\\nsequence.\"), mdx(\"p\", null, \"Members of a \\u0192ractal vote on which market makers to subsidize and their votes are\\nweighted by their 20 week average ranking in the weekly meetings. The liquidity subsidies\\nare then divided among the top 12 market makers by Fibonacci. The following table shows\\nthe percentage of liquidity rewards allocated according to vote rank:\\nRank Fibonacci Shares Percent\\n1 377 38.3%\\n2 233 23.7%\\n3 144 14.6%\\n4 89 9.0%\\n5 55 5.6%\\n6 34 3.5%\\n7 21 2.1%\\n8 13 1.3%\\n9 8 0.8%\\n10 5 0.5%\\n11 3 0.3%\\n12 2 0.2%\"), mdx(\"h2\", null, \"Traditional Network Provided Liquidity\"), mdx(\"p\", null, \"This creates a major difference from prior implementations of Network Provided Liquidity\\nwhere the network funds the pools directly. The result is an amplification of the liquidity\\nprovided. Consider the difference between the network seeding the Market Maker with a\\none-time injection vs. the network subsidizing market participants who provide funds to the Market Maker.\"), mdx(\"p\", null, \"In the traditional approach, a DAO/DAC would auction off tokens to fund a market maker. In the \\u0192ractally approach, the network provides added incentive to market participants who provide liquidity. This multiplies the liquidity, minimizes downside risks, and prevents one community from having a treasury of another community\\u2019s tokens which could be stolen or mismanaged.\"), mdx(\"p\", null, \"The easiest way to understand the difference is by analogy. Suppose you have an income of $1,000 per month and want to buy a house without a loan. In this case you must live in a very small house and grow it over time. Now suppose you took that same $1,000 per month and used it to pay rent. Now you could afford to live in a house worth hundreds of thousands of dollars immediately. More importantly, you are not responsible for maintaining the house.\"), mdx(\"p\", null, \"Likewise, a community that buys equity in their market maker at $1,000 per month takes a\\nlong time to build up liquidity; however, that same community that opts to pay $1,000 per\\nmonth to rent liquidity can have an order of magnitude more liquidity immediately.\"), mdx(\"p\", null, \"The other significant effect is that the \\u0192ractals transfer the price volatility risk to market\\nparticipants in exchange for a \\u201Cfixed cost\\u201D. The \\u0192ractals recognize the market participants for the ongoing real value of having liquidity between two currencies and don't need to worry about managing or liquidating community-owned \\uD835\\uDD44utual \\u211Despect.\"), mdx(\"p\", null, \"This means that both sides of the liquidity partnership between the \\u0192ractals have no\\nongoing interest in the market maker and may choose to increase or decrease their\\ncontribution to the liquidity providers independently. In fact, it allows unilateral liquidity\\nsubsidies. This makes for a smooth transition when a parent \\u0192ractal wants to kick a child\\n\\u0192ractal out of the nest once it is mature enough. It allows either party to remove subsidies\\nwithout disrupting the market maker. It frees both \\u0192ractals from having to make rapid\\ndecisions with respect to pulling liquidity in the event the counterparty adopts an exploitive monetary policy.\"), mdx(\"p\", null, \"Both \\u0192ractals only risk the recurring daily inflation rather than a large pool of funds.\\nMeanwhile, if the market sees a \\u0192ractal proposing changes to their monetary policy, it will\\nreact to rapidly adjust the price and/or liquidate their \\uD835\\uDD44\\u211D tokens. This prevents large\\ncommunities from having to rapidly respond in order to protect a \\u201Ccommunity treasury\\u201D.\"), mdx(\"h2\", null, \"Recruitment Rewards\"), mdx(\"p\", null, \"A community is only as effective as its members; therefore, the most critical component of\\nsuccess is for a community to recruit the most passionate and competent contributors it can find. To provide this incentive, all community members earn a commission equal to 5% of any \\u211Despect earned by the people they invite.\"), mdx(\"p\", null, \"So if you recruit Joe and Joe earns 55 \\u211Despect in his first weekly meeting, then you would\\nearn 2.75 \\u211Despect and the person who recruited you would earn 0.13 \\u211Despect. If Joe never\\nearns anything, then no Recruitment incentives are paid to you. If the people you recruit\\ndon\\u2019t show up or aren\\u2019t producing you have an incentive to encourage them to contribute.\\nRecruitment is \\u0192ractal, meaning that you also earn a share of other people\\u2019s recruitment\\nrewards. Whether someone is earning respect by consensus meetings, teams, staking, or\\nrecruitment, you get a cut for bringing them to the community. That said, you must attend\\nthe weekly meeting and reach consensus to qualify. Any recruitment rewards earned the\\nweek after you miss a meeting are burned.\"), mdx(\"h2\", null, \"Community Size Limits\"), mdx(\"p\", null, \"Corruption in any governance system grows as the number of people involved increases.\\nSmall towns are generally safer than large cities. Dunbar discovered that there are natural\\nlimits to how many people we can recognize and maintain a relationship with. For this\\nreason, it is critical to limit the size of a \\u0192ractally community.\"), mdx(\"p\", null, \"Each community is limited to 7,776 members; therefore, invitations are rationed. In order to\\nqualify to invite someone you must have attended the most recent weekly meeting. Each\\nmember can invite at most 6 people per week. Once a \\u0192ractal reaches more than 1296\\nmembers in a weekly meeting it isn\\u2019t possible for everyone to invite 6 people. At this point\\neveryone is given 5 invites and some of the top ranked individuals are given 6.\"), mdx(\"p\", null, \"By the time a community reaches 3,888 weekly active members, each member is only\\nallocated 1 invitation per week. Once the community reaches 5,000 weekly active members only the top 2,776 contributors are allocated the power to invite a single person each. When a community reaches 7,000, only the top 776 (11%) can invite someone. When a community reaches 7,775 members, only the most valuable contributor over the past 20 weeks is granted the power to invite someone.\"), mdx(\"p\", null, \"Each invitation represents an opportunity for the Inviter to earn \\u211Despect and so the inviter is incentivized to use it wisely. That said, invitations don\\u2019t accumulate and unused invitations will eventually be reallocated as the community grows or you stop attending weekly meetings. Therefore, you want to invite the most productive people possible as quickly as possible. There is nothing to be gained by inviting someone who won\\u2019t earn \\u211Despect.\"), mdx(\"h2\", null, \"Extended Community\"), mdx(\"p\", null, \"The community size limit applies only to the governance (teams, weekly consensus, and\\nsocial media voting) and not to the ownership of a community's Respect tokens, posting,\\nHODLing, and market making. In theory a billion people could use the currency of a\\ncommunity governed by 7776 people. This is like the boards of the top 500 companies, the United States congress and senate combined. Collectively these top 7776 leadership\\npositions have de facto governance control over an economy.\"), mdx(\"p\", null, \"This extended community of token holders can earn Respect by staking, market making,\\nand posting. If they lose respect for a community's ability to govern itself, then they simply\\nsell their respect and \\u201Cvote with their feet/wallet\\u201D. With hundreds or thousands of \\u0192ractals,\\neveryone will have an opportunity to govern in their \\u201Clocal\\u201D community and an opportunity to participate in any number of Extended communities.\"), mdx(\"h2\", null, \"Pruning Community Size\"), mdx(\"p\", null, \"Since the community size is capped and invitations are limited, there is a need to remove\\npeople. A person can either actively resign or they will automatically be considered to have resigned after 12 weeks without attending a weekly meeting. Additionally, the council may opt to evict a member who is harming the community.\"), mdx(\"p\", null, \"Once a community reaches 7,000 weekly active members, the automatic resignation\\ntimeout will be reduced to missing 6 consecutive meetings. This raises the bar to favor more active contributors.\"), mdx(\"p\", null, \"Anyone who resigned or was removed for inactivity will require a new invite to rejoin.\\nTherefore, the original inviter loses claim to their recruitment rewards and the new rewards are assigned to the new inviter.\"), mdx(\"p\", null, \"Anyone who is evicted by the council for harming the community will require council\\napproval to rejoin. When they rejoin, there are no Inviter Rewards (no Recruitment\\nIncentives).\"), mdx(\"h2\", null, \"Fractal Growth of Community\"), mdx(\"p\", null, \"Any community that reaches 7,000 members should seriously consider sponsoring a new\\ncommunity (\\u0192ractal) aligned with the same goals. This new community would have new kind of \\u211Despect and the two communities could be linked by automatic market maker liquidity.\"), mdx(\"h1\", null, \"Governance\"), mdx(\"p\", null, \"So far, we have looked at part of the process of allocating a community budget, but some\\nactions require global consensus. Things such as updating community guidelines or the\\ncommunity smart contract need to be decided by the people as a whole.\"), mdx(\"h2\", null, \"Council\"), mdx(\"p\", null, \"The \\u0192ractally community is governed by a Council comprised of the Team Leaders from the top 12 teams as measured by total \\u211Despect earned over the past 20 weeks. Each Team consists of 4 to 12 people and larger Teams have a slight advantage over smaller teams because they have more members participating in weekly meetings. Each Team elects a leader with the approval of at least \\u2154 of the team members. A Team can change its leader at any time.\"), mdx(\"p\", null, \"Up to 144 people from the top 12 teams are involved in selecting the 12 members of the\\nCouncil and the Council has the power to take any action involving the \\u201Cowner authority\\u201D of the smart contract with approval of 8 of 12 Council members. That said, all actions taken by the Council have a 24-hour review process during which the 12 Teams can change their Team Leader and thereby invalidate the vote of the prior Team Leader.\"), mdx(\"h2\", null, \"How a Bill becomes a Law\"), mdx(\"p\", null, \"The community\\u2019s will is expressed via a smart contract. A \\u201Cbill\\u201D is any proposed transaction\\nthat requires the owner authority of the \\u0192ractal\\u2019s smart contract. We call bills \\u201CPetitions.\\u201D This means upgrading the community contract is initiated through a Petition. It means that\\ntransferring \\u211Despect sent to the community could be initiated via a Petition. It means making a post, staking in a decentralized exchange, or any other action that a blockchain account can take, could be via a Petition. Fining users, evicting users, recovering accounts, etc., are all actions that could require the community authority to execute.\"), mdx(\"p\", null, \"In addition to a proposed transaction to authorize, a Petition is accompanied by a blog post that explains the intent of the transaction and makes the case for why the community should take the action. Community members can then interact with it like any other social media content (liking, commenting, etc.).\"), mdx(\"p\", null, \"Here are some examples of what the council can do:\"), mdx(\"ol\", null, mdx(\"li\", {\n    parentName: \"ol\"\n  }, \"Upgrade the community smart contract\"), mdx(\"li\", {\n    parentName: \"ol\"\n  }, \"Update the community guidelines\"), mdx(\"li\", {\n    parentName: \"ol\"\n  }, \"Charge a fine to community members violating guidelines\"), mdx(\"li\", {\n    parentName: \"ol\"\n  }, \"Evict a community member\"), mdx(\"li\", {\n    parentName: \"ol\"\n  }, \"Allocate a budget\"), mdx(\"li\", {\n    parentName: \"ol\"\n  }, \"Make a statement on behalf of the community\"), mdx(\"li\", {\n    parentName: \"ol\"\n  }, \"Resolve a dispute\"), mdx(\"li\", {\n    parentName: \"ol\"\n  }, \"Recover an account\"), mdx(\"li\", {\n    parentName: \"ol\"\n  }, \"Appoint representatives to other communities\")), mdx(\"h2\", null, \"Community Veto\"), mdx(\"p\", null, \"Certain actions, such as upgrading the community smart contract, require extra protections to protect the people from the Council and even the top 12 teams. These actions should be reviewed by all. In this case, the action requires a 21-day delay and can be vetoed by 8 of the top 12 teams by total team income in the most recent week\\u2019s meeting.\"), mdx(\"p\", null, \"Normally the council is composed of the top teams based on a 20 week average; however,\\nfor the purpose of vetoing the 8/12 of the top teams from the most recent week is all that is needed. This means that if any community member doesn\\u2019t like the change proposed by the current council, they can rank people and teams opposed to the action higher. This creates an effective referendum where everyone in the community can reach a consensus to block the incumbent (20 week average) council from acting.\"), mdx(\"h2\", null, \"Bootstrapping a \\u0192ractal\"), mdx(\"p\", null, \"Each \\u0192ractal is its own smart contract and anyone can create a \\u0192ractal by deploying the\\nsmart contract. Once deployed, the founder starts inviting members. A new \\u0192ractal will\\nrequire a user interface and fractally.com would need to know about the account. Therefore, to create a new \\u0192ractal, you fill out a form on fractally.com and we will deploy the contract and add it to our index. All \\u0192ractals hosting via fractally.com would need to use a contract known and approved by \\u0192ractally to be compatible with our user interface.\\nOnce a \\u0192ractal contract is deployed, its founder has complete control over membership and parameters until he explicitly yields control to its community governing Council. At this point, the community governance process takes over and it can choose if and how to express \\u211Despect for its members. If control is never yielded, then a community can always \\u201Cclone\\u201D itself and leave the founder behind.\"), mdx(\"p\", null, \"While this is the \\u201Ceasy\\u201D approach, all code from fractally.com is open source and can be\\nself-hosted by others. This ensures that all \\u0192ractals are free from dependence on\\n\\u0192ractally.com if they so choose.\"), mdx(\"h2\", null, \"Is \\u211Despect a Security?\"), mdx(\"p\", null, \"We are not lawyers and the following should not be taken as legal advice. In our opinion,\\n\\u211Despect is not a contract and confers no rights, obligations, or fiduciary duties among the\\nparties who create, buy, sell, own, or have owned the \\u211Despect. \\u211Despect is an opinion\\nexpressed by the community and distributed according to community consensus as a\\nnon-binding, voluntary recognition of community members for their contributions. \\u211Despect\\nis a subjective expression of the relative degree of contribution of each member to a\\ncommunity. It is only awarded after a contribution and never for a promise to do something.\"), mdx(\"p\", null, \"\\u211Despect has no value beyond the perceived value of those who choose to buy and sell it.\\nNo one is entitled to receive \\u211Despect for any services provided to the community.\\nFurthermore, the community, at its sole discretion, may freeze or reallocate \\u211Despect at any\\ntime for any reason. This means that all \\u211Despect is actually owned by the community and\\nconfers no property rights to the holder. They are a measure of reputation assigned to each person, and that reputation is subject to change at the sole opinion of the community.\"), mdx(\"p\", null, \"Changes to the \\u211Despect smart contract are governed by the community and not by \\u0192ractally LLC. If someone decides to buy \\u211Despect, it should be done so as a gift to the community for the services it has already performed and not based upon any expectation of the community, or anyone else, to perform any services or confer any benefit to you in the future. If you decide to sell \\u211Despect, you agree to inform the buyer that any value received in exchange for the \\u211Despect in the future is a gift and that there are no rights or obligations conferred from the seller or any other party to the buyer. \\u211Despect does not represent a partnership interest and no individual is authorized to speak on behalf of a \\u0192ractal or other \\u211Despect holders.\"), mdx(\"p\", null, \"\\u211Despect confers no voting rights nor any other power to the holder. \\u0192ractals are not a collective investment fund because no money or other assets are pooled\\nand there are no standing investment managers. All tokens are created and distributed to\\nactive participants according to the judgment of those participants and not according to\\n\\u0192ractally LLC.\"), mdx(\"h2\", null, \"Aragon Comparison\"), mdx(\"p\", null, \"Aragon is an organization that produces tools that help communities bootstrap and\\noperate their own \\u201Cdecentralized autonomous organizations\\u201D. Much of the content on their\\nwebsite sounds similar to what \\u0192ractally is doing. So let\\u2019s do a deep dive into the\\nfundamental similarities and differences between a fractally DAO (aka a \\u0192ractal) and an\\nAragon DAO.\"), mdx(\"p\", null, \"Aragon impressed us with their thoroughness and philosophy of freedom. For the sake of\\nthis comparison, we\\u2019re going to ignore the critical technical challenges presented by Aragon building on Ethereum. I\\u2019m also going to ignore the elements of centralization created by technical dependencies on critical infrastructure and the centralized safe guards with veto power they put in place. Most of these are implementation details that don\\u2019t impact the merits of their proposed governance structures.\"), mdx(\"h3\", null, \"Optimistic Governance\"), mdx(\"p\", null, \"One of the unique and thought-provoking elements of Aragon\\u2019s design is optimistic\\ngovernance. Under this model, all proposals are passed by default, without any voting,\\nunless the proposal is challenged in Aragon\\u2019s court. The theory, as far as we can tell, is that anyone who proposes an action that lacks community consensus is in potential jeopardy.\"), mdx(\"p\", null, \"Aside from an initial fee sufficient to cover transactional costs, it is not clear to us how this\\nprocess prevents proposals from being spammed. They claim \\u201Cunparalleled high-speed\\ndecision making\\u201D; however, we think it is worthwhile to take a closer look at the meaning of these words before taking them at face value.\"), mdx(\"p\", null, \"In the optimistic case, where there is no challenge, then the speed of governance is only\\nlimited by the built-in time delay during which challenges may be submitted. The \\u201Cdecision\\u201D was either unilaterally made in an \\u201Cinstant\\u201D or, more likely, the decision-making process is actually opaque, occurring out-of-band and out of sight (off the blockchain). \"), mdx(\"h3\", null, \"The Aragon\"), mdx(\"p\", null, \"DAOs merely track the outcome of the decision-making process and allow people to\\nchallenge the reported outcome.\"), mdx(\"p\", null, \"In theory, it would be extremely risky to propose something that you didn\\u2019t already have a\\nstrong reason to believe was supported by a majority. This is why Aragon allows signaling\\nproposals where people vote in a non-binding way to measure community opinion.\\nIf we assume this governance process was utilized in a polarized Red vs Blue community,\\nthen chances are 99% of all proposals would end up signaling with 45-55% support with no clear majority. The real process for making a decision could therefore be arbitrarily long, if not deadlocked.\"), mdx(\"h3\", null, \"Aragon Court\"), mdx(\"p\", null, \"This is the real \\u201Cvoting\\u201D process whereby \\u201Cguardians\\u201D (jurors) are randomly selected\\nproportional to how many tokens they have staked. The jurors are anonymized to mitigate\\ncollusion and are asked to predict what a plurality of the other jurors will vote. There are\\npenalties for being in a minority. This means that jurors are not voting their opinion on the\\nmatter, they are tapping the wisdom of the crowds in an attempt to provide an independent guess of the opinion of the other jurors.\"), mdx(\"p\", null, \"This is a situation where \\u201Cappearance of consensus\\u201D is \\u201Cconsensus\\u201D. Unfortunately, people\\nare extremely prone to thinking one thing privately and publicly stating what they believe is \\u201Csocially acceptable\\u201D. This tendency is discussed in \\u201CBlueprint: The evolutionary basis of a good society\\u201D by Nicholas Chritakis.\"), mdx(\"p\", null, \"As a result, the jurors will tend to go with the politically correct answer rather than what\\npeople really think. There is nothing in this process that incentivizes jurors to vote their\\nhearts; therefore, there is nothing in the process that actually facilitates consensus building.\"), mdx(\"h3\", null, \"Pareto Problems\"), mdx(\"p\", null, \"The Pareto principle applies to the distribution of wealth, power, and skill. This means that on average 20% of the people have 80% of the tokens. Pareto is also fractal, so 4% of the people have 64% of the tokens and 1% have 51%. It is equally true that not all rich token holders will want to participate as a juror - they have other things to do with their time than risking their money to play a variant of Family Feud (e.g. guessing public opinion). That said, enjoyment of \\u201Cgambling\\u201D and Family Feud is also Pareto distributed.\"), mdx(\"p\", null, \"Those who want to play this game to win are likely to publish their opinions and votes on\\npublic forums. Even if no one knows who the \\u201Cjurors\\u201D are or what their actual vote is, this\\nexternal signaling (combined with proof of tokens staked) gives everyone involved a high\\nprobability of how the actual guardians will vote. Voting against this side poll would be\\nextremely high risk.\"), mdx(\"p\", null, \"I predict that the long-term outcome of this process would be equivalent to a vote of the top 1% of the Family Feud-loving gamblers.\"), mdx(\"p\", null, \"Of course, the \\u201Crules\\u201D of an Aragon DAO are subjective and people could attempt to outlaw publishing any evidence of \\u201Cjuror\\u201D opinion. This idea seems to be at odds with their\\nnon-binding polling solution. Let\\u2019s assume that there is a cryptographic technical means to\\nprevent potential \\u201Cjurors\\u201D from revealing how much they stake and what their opinion is. In\\nthis case, the only rational move for a juror is to look at the most recent public opinion poll\\nas a Schelling point.\"), mdx(\"p\", null, \"Under these assumptions, the \\u201Cjury\\u201D may just be a complex proxy or oracle for the outcome of a traditional voting process. For small communities of people who know each other well enough to \\u201Cpredict\\u201D how others would vote, then the optimistic governance process may have some advantages, but I doubt this could scale well beyond a dozen people due to the limits of Dunbar.\"), mdx(\"h3\", null, \"The Tragedy of the Commons\"), mdx(\"p\", null, \"The other challenge I see with this approach is that an attacker has clear benefits if they can get a proposal passed that benefits them at the expense of the DAO. Meanwhile, the\\nremaining DAO members have a vastly different risk-reward payoff. Let\\u2019s suppose an attacker risks 1 token and gets a reward of 100 if the proposal passes. If there are 100 members in the community, then the cost to each individual is 1 if the proposal passes.\"), mdx(\"p\", null, \"There is a cost to challenge a proposal in Aragon court, this means the defenders\\nindividually have a risk-reward payoff of 1:1 vs the attacker of 1:100. The defender is therefore performing an altruistic action by challenging the proposal on behalf of the community.\"), mdx(\"h3\", null, \"Rational Ignorance\"), mdx(\"p\", null, \"Note that the defenders must pay a cost to review all proposals good or bad in order to\\ndetermine whether or not to challenge them in Aragon Court. Presumably \\u201Csomeone\\u201D will\\nnotice a potential attack, however, everyone will tend to assume that \\u201Csomeone else\\u201D is\\npaying attention. The end result is that the community will end up paying someone to\\nreview everything full time because the rewards from detecting the occasional bad proposal do not cover the costs of reviewing all of the good proposals.\\nAttempts to pay big bounties via socialized costs create an opportunity for people to\\nintentionally submit a bad proposal only to report it themselves.\\nBottom line, the community will need to hire watchmen and then come up with a process to guard the watchmen. Afterall, the watchmen have the full power to let anything pass while everyone else remains rationally ignorant.\"), mdx(\"p\", null, \"In summary, the process described by Aragon is not a consensus-building process. It is at\\nbest a lossy Oracle for an unspecified consensus-building process.\"), mdx(\"h1\", null, \"\\u0192ractally Consensus Building\"), mdx(\"p\", null, \"The principles behind \\u0192ractally are outlined in the book, \\u201CMore Equal Animals - The subtle art of true democracy\\u201D. The core idea is to define a process to measure the wisdom of the\\ncrowds. Voting is simply an attempt to measure public opinion; however, all voting systems create a meta-game where people vote strategically instead of honestly. This combined with Pareto distributed media influence and Pareto distributed wealth and tendency to favor forming political parties or oligarchic control. Furthermore, voting assumes all voters are actually informed and educated; however, rational ignorance rules the day.\"), mdx(\"p\", null, \"Rational ignorance is when the cost of learning knowledge exceeds the value of obtaining\\nsaid knowledge. In typical voting systems, your vote is unlikely to change the outcome so it has relatively little value, but the cost to learn what is needed to vote wisely is high.\\n\\u0192ractally solves the rational ignorance and Sybil attack problems by randomly assigning\\npeople to groups of 6 people. These 6 people must reach a 4 of 6 consensus or everyone in the group loses. Each group is essentially a random sample of community opinion and there are potentially 1000\\u2019s of groups in the initial round.\"), mdx(\"h1\", null, \"The Bottom Line\"), mdx(\"p\", null, \"\\u0192ractally is a consensus-building process that is not token or wealth-weighted and is\\nresistant to Sybil attacks. Meanwhile, Aragon is a consensus-predicting oracle that is only as good as the unstated, ill-defined, or adhoc off-chain consensus-building process.\\nThe \\u0192ractally process can build a community-wide consensus on almost any complex topic\\nin a matter of hours, if necessary.\"), mdx(\"p\", null, \"I predict that in the future, Aragon \\u201CGuardians\\u201D may end up referencing a \\u0192ractal\\u2019s consensus as their Schelling point.\\nI\\u2019m extremely excited by the amount of work that has gone into Aragon and the spirit of the community. It is my hope that together Aragon and \\u0192ractally can discover and realize truly effective and scalable decentralized governance processes.\"), mdx(\"h1\", null, \"\\u0192ractally LLC\"), mdx(\"p\", null, \"\\u0192ractally LLC creates and publishes an open-source web interface with no warranty of any\\nkind. This open-source user interface may be hosted by anyone in the \\u0192ractally community.\\n\\u0192ractally LLC makes no promises to provide a hosted solution and may terminate its hosting services at any time. \\u0192ractally LLC does not have possession of user keys and cannot recover accounts nor manage the membership in communities, instead \\u0192ractally LLC\\u2019s software will empower communities to recover accounts on behalf of their members.\\n\\u0192ractally LLC will produce open-source reference smart contracts that communities may\\nchoose to adopt via approval of their Councils.\"), mdx(\"p\", null, \"\\u0192ractally LLC is a team of developers that provide services to \\u0192ractally communities. We\\nproduce open source software that allows anyone to host an interface to \\u0192ractally. All data\\nhosted by \\u0192ractally LLC is derived from the blockchain and IPFS. \\u0192ractally LLC facilitates\\nvideo calls, records the calls, and publishes them to IPFS.\"), mdx(\"p\", null, \"No one, at any time, shall interpret any public statements, including this paper, made by any shareholder, director, executive, officer, or employee of \\u0192ractally or its contractors as a\\nbinding commitment to do anything to raise the value of the Respect of any \\u0192ractal or any\\nother crypto-currency token.\"), mdx(\"p\", null, \"\\u0192ractally is committed to providing tools that empower people to reach consensus and\\nproduce collaborative value.\"), mdx(\"h1\", null, \"Glossary of Terms\"), mdx(\"p\", null, \"Autonomous : Self-directing, self-governing, self-sovereign; not subject to outside\\ngovernance.\"), mdx(\"p\", null, \"Consensus : The accepted agreement among a group of people\"), mdx(\"p\", null, \"Council : A group consisting of the team leads of the top 12 teams averaged over\\nthe past 20 weeks.\"), mdx(\"p\", null, \"Currency : A medium of verbal or intellectual expression\"), mdx(\"p\", null, \"DAO : A Decentralized Autonomous Organization is a transparent organization\\nthat leverages smart contracts to reach consensus. A DAO is sovereign\\nover its consensus state, has no secrets, and holds no external property.\"), mdx(\"p\", null, \"Democracy : Rule by all of the people as opposed to rule by some of the people over\\nothers.\"), mdx(\"p\", null, \"Earn, Earning : To come to be duly worthy of or entitled or suited to \"), mdx(\"p\", null, \"Escrow Account : Account which receives all income from the network and which can be\\nliquidated at 5% per week.\"), mdx(\"p\", null, \"Fibonacci sequence : A sequence of numbers in which each number in the sequence is equal to the sum of two numbers before it\"), mdx(\"p\", null, \"\\u0192ractal : A community with its own independent currency (Respect) and\\ngovernance with up to 7,776 members governed by a Council.\"), mdx(\"p\", null, \"A group or community with its own smart contract, respect, and governance process\"), mdx(\"p\", null, \"Fractal Democracy : A democracy of democracies or a democracy of Fractals where\\nconsensus is reached in randomly selected small groups which promote\\na member to higher levels where the process is repeated in a \\u0192ractal\\nmanner.\"), mdx(\"p\", null, \"\\u0192ractally : The brand of the service provided by \\u0192ractally LLC, as opposed to lower\\ncase fractally which means \\u201Cin a \\u0192ractal manner\\u201D.\"), mdx(\"p\", null, \"\\u0192ractally Democracy : A democratic community (\\u0192ractal) that follows the methods presented in this paper.\"), mdx(\"p\", null, \"\\u0192ractally LLC : A team of developers that provide services to \\u0192ractals. \\u0192ractally\\nproduces open source software that allows anyone to host an interface\\nto \\u0192ractally data. All data hosted by \\u0192ractally LLC is derived from a blockchain and IPFS. \\u0192ractally LLC facilitates video conferences, records the meetings, and publishes them to IPFS.\"), mdx(\"p\", null, \"HODL : A term derived from a misspelling of \\u201Chold\\u201D, in the context of buying and holding Bitcoin and other cryptocurrencies. It\\u2019s also commonly come to stand for \\u201CHold On for Dear Life\\u201D\"), mdx(\"p\", null, \"Incumbent Advantage : For most political offices, the incumbent often has more name\\nrecognition due to their previous work in the office. Incumbents also have easier access to campaign finance, as well as government resources (such as the franking privilege) that can be indirectly used to boost the incumbent's re-election campaign.\"), mdx(\"p\", null, \"Market Maker : Offers to buy and sell two currencies according to the Bancor algorithm\"), mdx(\"p\", null, \"Mutual Respect (MR) : Market Maker Token that controls a percent of the assets allocated to the automatic market maker algorithm.\"), mdx(\"p\", null, \"Prime Fractal : The original Fractal whose mission is to grow more Fractals.\"), mdx(\"p\", null, \"Petition : a proposed blockchain transaction requiring authority of community\\ncontract combined with a blog post and comment sections that describes the purpose and rationale of a transaction.\"), mdx(\"p\", null, \"Rational Ignorance : Intentionally choosing to remain uninformed on a topic because the cost of acquiring the information is greater than the estimated potential benefits.\"), mdx(\"p\", null, \"Recruitment Rewards : Respect earned for inviting users to \\u0192ractal\"), mdx(\"p\", null, \"\\u211Despect : In its plural usage, refers collectively to the currencies of multiple Fractals\"), mdx(\"p\", null, \"In its singular usage, refers abstractly to the symbol of an attribution of a\\ngeneric Fractal\"), mdx(\"p\", null, \"Smart Contract : A smart contract is a transparent, deterministic, algorithm governing how\\na community allocates property rights based upon signed statements of its members.\"), mdx(\"p\", null, \"Sponsor, sponsoring Someone who buys or holds Respect of a \\u0192ractal\"), mdx(\"p\", null, \"Sponsorship Rewards : Respect earned for committing to hold Respect for 6 months\"), mdx(\"p\", null, \"Sybil : a fake account\"), mdx(\"p\", null, \"Pareto distribution : A power-law probability distribution that is used in the description of\\nsocial, quality control, scientific, geophysical, actuarial, and many other types of observable phenomena. The Pareto principle or \\\"80-20 rule\\\" stating that 80% of outcomes are due to 20% of causes was named in honor of Vilfredo Pareto.\"), mdx(\"p\", null, \"Wisdom of the Crowds : the collective opinion of a group of individuals rather than that of a single expert when relevant information is distributed among the population and gathered from independent sources.\"));\n}\n;\nMDXContent.isMDXComponent = true;","inboundReferences":[]}},"pageContext":{"slug":"fractally/WhitePaper","node":{"childMdx":{"slug":"fractally/WhitePaper"}}}},
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