Project Funding - The makings of a decentralized society
So today's post is somewhat personal in nature. I am writing to reflect on issues we are having within one of the projects I am involved with.
This specific project is an Autonomous Decentralized Society call ADSactly, which I am sure many of you on steemit have already heard of.
It is a society that helps connect cryptocurrency investors with project creators and project creators with cryptocurrency enthusiasts.
The ADSactly Society
Our society is planning to launch several cryptocoins, assets, and tokens. However at the time of this writing, only one of these have been created - the rest are still in the works.
As a society, ADSactly is very multi-faceted. We have countless projects that are going on in the cryptospace.
Some relate to marketing, some relate to music, some relate to shopping, and some relate to getting involved with existing projects such as encouraging our members to use steemit as a means of getting them started in cryptocurrency and a way to give back to our members by upvoting their content and helping them earn steem rewards.
The point is our society has a lot of crypto projects going on that have not yet paid off.
A Society is not a Business
Building a society is not like building a business, an ICO, or any other thing to be compared to. Its a long and slow process riddled with errors and learning and structuring and restructuring.
We have started out with some plans and completely changed the idea before the plan ever came to exist. We have made promises we can't keep.
It's all part of the growing and learning process of creating a decentralized society.
It's also something that is incredibly hard to have to try to explain to our members.
We have been threatened several times by unhappy members with everything from spreading rumors we are a scam to lawsuits.
A society is not an investment program
What happens is we bring in members to our society and we explain to them that in the future they will get returns from joining. Unfortunately the word returns is a bad word as it implies an investment - and our society is not an investment.
Our returns will be given when all our coins are launched - just like any other crypto project.
After a new member joins, we then take their membership fee's and add it with other membership fee's in a "crowd funded pool" so to speak. We then invest that pool to further increase the overall money we have to create our society.
This practice is sadly becoming a problem. Those who have joined our society only seem to remember one single thing about when they joined - the promise of returns.
So when they see we have increased the overall crowdfunded pool value through cryptoinvesting - they seem to believe we would, or even legally could, give them returns from that fund.
It's against the law
Almost every modern country has laws, even in the cryptocurrency sector, that prevent someone from becoming a crypto broker without being licensed as such.
To trade for others and give returns on those trades is illegal if you are not registered. So we cannot give returns to our society members from invested money.
Rather what we can do is wait until our coins launch and give back by granting members coins - the number and types of coins is yet to be determined as they don't yet exist, but logically it will be based on how much the member paid into our society.
The value of those coins, will be based on all our investments as well as the returns from all the society projects we have going on.
Handling Bad Investors
There are only two legal ways that we can handle our members who thought they were investors.
First we can treat this as a crowd funded project and refuse them a refund - as typically with a crowd funded project, when you put your money in your don't get it back until a launch.
The other method is logically that we can issue them a refund.
If we do this, by law we can not give back so much as one penny on the return because we cannot pay investors back from the money from other investors - that is a ponzi scam.
This means we would have to give them back the dollar value that they invested.
As cryptocurrency is not regulated, and it would ultimately bankrupt our society if every member tried, we can only refund the dollar value at the time of the investment.
So if someone bought in for 1 bitcoin when bitcoin was $500 they would be refunded $500 not 1 bitcoin.
We believe this would be the only way fair to members, and legal to uphold.
Protecting the Society
Because we have had a few threats over the last few months about lawsuits if we don't give people returns, it has made me stop and think about how to protect our society as a whole.
This is something very important to me, and so far I have not come up with a valid solution.
If we had better trust in our society I would like to have several key members hold all our trading platform passwords and all our wallet keys.
This way if someone did file a lawsuit against another founding member, we could lock them person from accessing any of our society funds - even under things such as threats of 20 years in jail - which has been known to cause people to do crazy things.
Unfortunately we don't have that level of trust in our society yet.
So it is something I think about. I wonder if there is even a solution.
We try to keep members informed and keep them under the realization that this is not an investment - but there are many people involved and mixed messages end up getting tossed out and people misunderstand what and why they are joining.
As I say, creating a society is very tough work - especially one revolving around this crazy new world of blockchain and cryptocurrency.
If you have ideas for solutions on how to ensure our societies money is protected in the event of lawsuits please do leave comments below. If you have no idea about the ADSactly Society and would like to know more also please leave me a comment below.
Interesting, just brainstorming...
pick 10 of your top members
split the keys and passwords into 10 pieces
give them each 1/10 of the information
depending on trust levels all 10 could know the proper order
or you could have 3 others members that know "these are people 1-3/3-6/6-9" and a 4th members that knows who number 10 is
Else no one knows who the top 10 are not even the 10
and some sort of time released document is released, in a 1 year or so
to protect against the top 10 being compromised you could have them pick 2 or 3 people they trust in the community and tell each of them 1/2 or 1/3 of the keys and report back the people so everyone could be listed in the time document
you could even create a system where each member that now has 1 character makes a post or alters their steemit header to include the character so they could never hide the information, you would also have everyone else in the community do the same thing so the exact people and characters are unknown except to the very top circle and a time released document (this document would have to have some people hidden since the keys are publicly available if the order/members are established)
If we were just dealing with wallets and keys this would be an amazing idea. In fact i have been thinking about it over and over since I read this comment yesterday. Unfortunately 95% of our coins are actively being traded. We do have a few people who trade for us so the coins are broken up among a few people and accounts - thus no one person controls it all - but overall as most are being actively traded - its a tricky situation. Also I am not so sure that would work for the $1 million USD we have over in the ADSactly steemit account. But this definitely gives me idea's and things to think about and discuss with our founders.
Nice post bro.
I hope you can find solution to these problems! We need people like you to push cryptocurrency technology forward!!
nice info
Sounds like more problems to come that I'm sure you weren't intending for your society.
I am sure there are many more problems to come. They are always unexpected - but at the same time we were not so nieve we didn't expect problems - we just didn't know what types.
Overall so long as we come up with a solution to lock someone being sued from access to the funds - then our society funds become protected.
There is an old saying "You can't get blood from a stone".
We are trying to ensure that saying holds true ;)
Very interesting
Good that you are still working on it
Good luck
great info. thanks
this certainly provides a new perspective to adsactly.
I believe for a society to truly thrive and sustain, transparency and accountability should be important driving factors that can allay any doubts that members have. I'm looking forward to the exciting things that adsactly will do, and hope this dark cloud soon passes.
This comment made me contemplate creating another post about that topic, but I really don't want to run my followers off with nothing but info about this issue and topic. Perhaps in the future I will go into detail about the response I am going to give you, but for now I am just going to be blunt and to the point about it - and I really have no interest in a long thread arguing the subject so I will say no more about it after this.
In response to "transparency and accountability should be important driving factors that can allay any doubts that members have" - all good things come at the correct time, but the correct time is not now. Transparency and accountability will do nothing but hinder the overall goal and mission at this moment - but yes those are important factors for growth of the society. The best thing we can say right now is, rest assured knowing - our not paying dividends and instead giving people the ability to take their invested dollars out is done entirely to KEEP US LEGAL.
Thanks for commenting.
Awesome idea and input :)