@ura-soul: Analysis of Organisational Structure Proposals for a Steem Foundation

Background

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Due to the need for community driven activity to propel Steem into it’s own future, Steemit Inc. has backed the idea of forming a Steem foundation. The foundation will guide the direction of software development, marketing and other processes that are necessary to support Steem’s expansion, evolution and wider adoption into the social and business networks that already exist globally. The foundation will direct significant amounts of funds and so it is essential that it has a structure that facilitates accountability, transparency and measurable performance in relation to clearly defined goals and objectives.
The operating structure of the foundation has been left open to discussion and an invitation has been made to the Steem community to provide input, concepts and designs for it’s future format. A wide variety of organisational structures exist that could be included in such a foundation, ranging from an absolute minimum of hierarchy (voluntarism and anarchism), through to the more traditional structures that currently dominate the corporate landscape.
The cryptocurrency world is one that has been founded on the anarchistic and voluntaristic narrative, with many of it’s supporters seeking to radically shift away from traditional approaches to power distribution within groups – such that individuals are empowered without them necessarily being in a position to dominate and control others. The expression of the dynamic opposites of those who seek to overpower others and those who seek real balance has been continual in humanity’s history and it is expected that proposals that are put forward to design the shape of the Steem foundation will reflect this. A balance needs to be found between realising the aims of true freedom, while also delivering practicality and ensuring goals are met.

Content of This Document

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I will briefly map out the basic principles of balance within individuals and group interactions as these provide a ‘foundation’ upon which structural design decisions can be made. I will discuss pros and cons of the various options set out in proposals that have been made by others so far.

Efficiency, Success and Joy Require Real Balance, But What is Real Balance?

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There is a great deal of confusion regarding the nature of balance and why it is desirable. There are those who assume that if we seek balance in life then we are somehow going to force people to conform, however, conformity is out of balance since it overpowers free will of the individuals involved. Real balance allows everyone to have the space they need to fulfil themselves, provided their actions align in a balanced way with the stated objectives of the group.
The best definition for balance is ‘No part or aspect is overpowering any other’. This applies to and works in ALL aspects of life. When a willed desire is suppressed or denied then we have disagreement and likely also discord. However, in a situation with limited resources it is necessary to have a method of them being directed and this means that not all desires of every party can be met. So how to find real balance in an environment of disagreement is really the challenge of this and most organisational agendas.
It might not always be clear, early on, how real balance can be found and what the balance points are – however, we CAN always identify points of imbalance in proposed ideas, logic and thinking. We can always list out the problems that the imbalances will likely cause and from there we can, through our own imagination and free will, potentially arise at solutions that keep the balance.
Real balance feels good to all involved, introduces minimal to zero friction and is directly aligned towards the stated goals. Typically, real balance requires ‘leaving no stone unturned’ and may involve a greater degree of learning and ‘research’ than is common in decision making, but the success of the outcomes born of real balance tend to be longer lasting and far more sustainable.

Proposals Already Provided By The Steem Community

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As of the present moment, the following proposal posts have been shared publicly:


DeCentra Steem - a proposal to develop a self-governed structure for foundation and Steem ecosystem by @impactn

This is, to me, one of the most interesting posts so far because it highlights the failures of traditional thinking with regards to organisations in a clear way. The idea of Holocracy is presented, which provides a tested framework against which an organisation can function without hierarchy. This relies on ‘crystal clear’ definitions, a constitution, rules and role assignment, combined with software tools to allow everyone to look up this information and use it quickly in real time. Holocracy allows for effective teamwork, potentially a real balance and importantly a clear and transparent way to create change quickly. Blockchain moves very quickly and it is clear to me that Steem’s issues so far have been partially due to a lack of speed due to a lack of clarity and communication among the many people attempting to work together.
A partial concept is introduced in this post for transferring holocracy’s principles into the shape of a Steem foundation.
Generally, I see that the balance must be found between the actors and experts wanting to take action for Steem and the stakeholders who are invested in the process. I am not clear how holocracy deals with the issue of remuneration for tasks and ensuring that this is fair.
A possible ‘con’ for Holocracy is that I can see from reading through the documents on the Holocracy website that the process for governance, while being clearly established and defined, is also quite time consuming and very formal – so it is possible that some will feel intimidated by it and simply not want to participate; however, this may ultimately be more of an issue of ensuring that the right people are chosen to be in a foundation that operates using such a paradigm than of anything else. It is great to have defined ways of interacting, but not when processes get bogged down. Ultimately though, it may be that there is no better way of having voluntary work achieved in this setting.
No clear solution is provided for determining who is the right person for each role.


Suggestion for a Proposal Structure for @steemalliance - Evergreen Funding by @valued-customer

This idea is simple and aims to render the steem foundation’s powers to a minimal level by empowering the community to support development and other tasks on a daily basis by simple upvotes, drawing funds from an inflation pool. I can see numerous issues with this idea, including:

• Tasks may require funding to a level that is difficult to reach by daily vote payouts. It may be that tasks cannot be achieved without a specific target amount of funding and so by paying work proposers daily, they may end up with money but not be able to do any work.
• Voting on Steem can hugely fluctuate for numerous reasons and many tasks would not be realised if the funding for them cannot be guaranteed in advance. Many will not want to commit their own time and resources on the basis that they ‘might’ get more votes and funding.
• There is no insertion into the process of transparent expertise from known specialists, since all tasks would simply be chosen by whomever has the most money on the blockchain. This is fine from the perspective of stakeholders realising their aims, but there is no assurance to the community that the relevant stakeholders are either acting in good faith or intelligently. This could easily become a giant ‘software developer circle jerk’, for example.
  
  

Steem Alliance: Foundation Proposal by @upheaver

This is a substantial offering that seeks to create a traditional corporate structure (defined in a github page here). There is a specific focus on bringing in private corporate interests and their funding. While this does make sense from the perspective of the stated aim of the Steem foundation to increase Steem’s profile in the computing world and to increase it’s adoption – I can see how this would also be seen as a target for exploitation for many predatory groups who would not hold Steem’s best interests in mind. Potential attackers include competitors for whom the stated required investment amount would be easily paid and who might seek to improve the chances of a competing blockchain or social network. If Steem eventually provides real competition to the Facebooks of the world, then it would make perfect sense for them to pay half a million dollars to get their voice into one of the main groups driving Steem. This would be like a corporation being able to buy it’s way onto the board of it’s competitor – usually this would not be considered a good thing by the board involved!
Of course, any such threats need to be weighed up in comparison to the potential benefits, but at this point we simply do not know how that balance would play out since we do not know which parties would eventually participate and what their intents are. We can, though, say for sure that by allowing companies to buy their way into shaping the foundation and therefore also shaping the future development of Steem, there will be many users of Steem who have put a great deal of time and energy into it specifically to shape it into a counter force to a corporate dominated internet, who will be greatly disheartened.
It is stated that part of the aim is to set the foundation into a form that allows it to function globally as a legal entity, which is a justifiable aim. The counter to this is that Steem is an anarcho-capitalist creation that was specifically designed to go counter to the prevailing power structures and, in fact, to create alternatives to them (“Make government irrelevant” - Dan Larimer).
It is clear to me that many people believe strongly that conformity and the use of prevailing organisational design is necessary to achieve greatness and they are unlikely to change their position on that until the rest of the world does and they then see a new way as being better. We need to decide if we intend to cut a new path for humanity or whether we are going to conform to the old patterns. This is actually a primary issue that needs to be agreed upon and not everyone will agree. In such situations, the only workable solution is to leave things as open as possible, which might mean to allow company’s to have members in the foundation, but only allowing them to operate as individuals – with no special privileges.
We are literally deciding the future of Steem’s social eco-system and thus also the user experience that it’s users will encounter. People do not like being seen as products in a corporate network such as Facebook and it is highly likely that allowance for corporate domination of Steem will just recreate that in a new form – perhaps one that is less obvious, but which might exist all the same.
This proposal also hands total veto rights to the Chairman of the board – which is a total opposite to Holocracy and Anarcho-capitalism. I am not confident that this approach would be popular amongst the Steem community!


STEEM UNITED - Red Tape Nightmares Solved by @jackmiller

Jack sticks to one specific topic here – the nature of the legal status of the foundation. He suggests that it should be a registered company in a ‘tax haven’ rather than any of the more obvious entity types that might be proposed. The aim is to cut out on the ‘red tape’ of a foundation.
I share his desire to keep things simple, however, I am not currently aware of how his suggestion will result in the streamlined process for creativity and problem resolution that is needed to make the foundation a success. In other words, while legal reasons may mean that a private company makes sense for the reasons stated, we still need to address all the other issues involved that I will be attempting to address here as we continue. I am not personally aware of all of the details of the differences, legally, between the operation of a foundation and a private company – nor of how the different jurisdictions of the world define those differences. I am therefore not in the best position to comment on this and I think it would take the input of experts in the ‘legal’ field and international law for us to really know the best option here.


Steem Foundation Proposal by @alexvan

Alex suggests basing the foundation in a crypto friendly country. I agree that that makes sense since some countries are wildly different in their treatment of crypto to others. That said, though, the nature of the foundation is international – just as the blockchain is – so I would like to find a way that minimises the connection of the foundation to any particular national framework or identity.
It is suggested that members retain anonymity. On one level this is a good idea, but on another level this means that average Steem users may have no idea who is actually running the foundation. I do not think this is a good idea. If we were to combine this feature with the idea we saw earlier of allowing companies to buy their way in, we could have a situation where numerous corporations run the foundation in total secrecy! How absurd to have an anarcho capitalist organisation that allows itself knowingly to be dominated by hierarchies!
Alex suggests having members spread geographically, with 2 from each continent. I am unclear how this would be enforced – are they expected to provide their passport just to be able to enter into an election?
He suggests that the foundation has a lawyer and an accountant and I agree that these skills are requirements. He suggests that these be the only paid roles. While I agree that it is unlikely to find people to fill the roles for free (unless they have a hidden agenda), steps still need to be taken to check their decisions and advice – which ultimately brings us back to ‘the wisdom of the crowd’ to some extent.
He raises the issue of whether to fund projects with delegations or direct investment. I agree that it generally makes sense to go with the option of inflation (delegation or upvotes) rather than direct investment, since this provides a timescale through which the funds can be accessed, rather than having them all accessed at once. However, some projects may require larger funding up front, so flexibility is needed.


Foundation Proposal - GROW THE CHAIN by @bluefinstudios

This is a proposal to create a US based ‘not for profit’ organisation that follows a traditional corporate structure, similar to Upheaver’s suggestion. There are certainly attractive aspects to this solution in that it is tried and tested and fits in with the world’s expectations, however, the ‘devil is in the details’ and the answers to the various challenges could make the difference between success and failure. This proposal by bluefinstudios does not attempt to answer the challenges of how to go about distributing power in a balanced way or the fine points of what happens when bad actors get involved.


Stars Align- Core of the foundation design that will later get submitted to the Steem Alliance RFP by @aggroed

Aggroed has provided an initial structure that defines sub groups specialised towards specific needs/tasks, such as marketing, investor relations and product development. Essentially, this is very much like the structure I would expect to have seen at Steemit inc.
I agree that the foundation should tackle the areas he has delineated.
He states that the design he outlines will make gaming the system difficult, but he does not appear to have actually stated which part of the foundation has the final say on financial decisions, so I am not clear on what safeguards he is referring to. I have asked him to respond to that in the comments under his post.
The real details of the proposal are not in his post and more posts will be forthcoming once they are decided.


Welcome to InterSteem - The Decentralized Project Accelerator on Steem by @surfermarley

This is a proposal for a system that does not involve any legal entities being formed, with the foundation not having any control over funds directly and no contracts being created. I am generally in favour of solutions that don’t involve legalise or formal corporate structure, however, in it’s current form, this proposal doesn’t even attempt to address the challenging issues involved with creating such a process and foundation. The model includes a variety of managers who are intended to funnel proposals towards fundition.io in order to then be actively promoted by the foundation and to seek investors for the project.

Points that need to be addressed in this proposal:

• Will the foundation members will be paid?
• What would the funding from Steemit inc. would be used for?
• How will the direction of the foundation would be kept in alignment with the community’s real needs and desires?
• How will the team members would be determined and what oversight there would be?

If there is no payment for team members in order to keep things simple, then what powers the activity of the team? Is it all voluntary? Is anyone held to performance targets? What happens if the outcome isn’t so good? How is change co-ordinated?

Generally, the idea to focus on decentralisation is a good one and leveraging existing groups in the Steem eco-system is a good idea too – however, if the power balance is not clearly defined then we cannot know how this idea would play out in reality with any degree of accuracy.


S+ Foundation: Proposal [V1] by @guiltyparties

This is a formal and generally well thought out proposal and structure.
Unique points:
Voting is proposed to be weighted according to the amount of Stake held and also the age of the user’s account. If stake is to be a deciding factor in weighting votes then the idea proposed of limiting the potential weight that stake can add is a good one. On the other hand, allowing votes to be weighted by stake is potentially a recipe for self enrichment, since voting on policies that benefit self will result in more stake and thus further power to sway the vote in your own favour. Additionally, voters might choose policies that specifically disempower their perceived opponents in the foundation, causing them to lose voting power. In short, stake weighted voting has the potential to introduce competition into the foundation when it probably would be best eliminated.
Allowing voters to increase their points if they have multiple accounts is not really a good idea as it gives a benefit to people for no reason other than having multiple old accounts.
The general guidelines for project appraisal and acceptance/rejection are solid.
The topic of risk and responsibility are raised, but the foundation is working for free. If the foundation do not receive rewards, what is there to ensure they are not biased? The only risk they face is any damage done to Steem as a result of their actions, which may lower the value of their stake. This IS is an argument for stake weighted voting being part of the foundation – however, this then requires an answer to the following question:

• Which is the biggest risk? That foundation members will manipulate the system for their own gain? Or that foundation members will be careless and unreliable in their roles/tasks/responsibilities?
  Assessing this is a matter of understanding how much damage can be done in each case, the chances of each case occurring and the ease with which each case can be stopped once it has started.
  
  

My Summary of the Proposals So far

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These ideas span the full spectrum from minimalism through to full blown corporate structure and on to a more decentralised / hierarchical format. It is clear that there are quite varied approaches being taken and they each have benefits and risks. It is also clear that there is a dividing line between the ideas which rely on tradition and those who seek to be more evolved and holistic.
Each proposal has elements that point towards balance and others that don’t. I do not feel that any of them provide a complete package of solutions regarding what is needed or to a level that can be fully acted upon – though, when combined, we have a good starting point to highlight issues that need to be addressed and some likely solutions to them.

Wishing you well,
Ura Soul

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