Neokingdom DAO

Neokingdoms are constitutional DAOcracies. They serve a collective of humans with a common goal. Virtual realms rewarding those who create value. Let's create a better existence for everyone on Earth.

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Inspiration

In the canonical employment model, employees and companies have two different goals. Employees, even if they want, are not included in the decisional process of the company, and they don't have access to dividends (if the company is doing well all they can aim for is a salary raise).

Companies, on the other side, need to maximize their profits. From squeezing their employees as much as possible to compulsive hirings and layoffs, companies find their way to survive in the market at the expense of their employees.

In the case of VC–backed companies, investors own part of the company, having access to voting and dividends. They have decisional power, while employees that are contributing their time to the company don't have a say.

Companies and employees don't have their incentives aligned, creating all kinds of byproducts.

People should be able to invest their time, not sell it.

The inspiration to build Teledisko DAO came back in 2016 when Benjamin von Uphues (the founder of Teledisko GmbH) thought about how to change the structure of his company to bring its contributors away from capitalistic slavery.

It was a new way of shaping the relationship between a company and its contributors. A way aimed at building a symbiosis between people and commercial entities.

Turning the Teledisko GmbH into the Teledisko DAO was the first step toward the fulfillment of this vision.

In 2021 the legal work started (the DAO had to be a legally recognized entity).

In 2022, we started building what in July became the first release of the Teledisko DAO, on EVMOS.

What it does

Neokingdom is the groundwork to create EVM based, legally compliant DAOs that rely on a legal framework crafted by Oblicity (an Estonian law firm) using the favorable Estonian legal system.

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

Developed by a Berlin-based team, the first MVP was launched on July 27h 2022, transforming the popular www.teledisko.com, a Limited Company registered in Germany, into the first Neokingdom DAO.

The purpose is to create an organization that is run in a fair way by the contributors who actually add value to it.

The system is socialist on the inside, capitalist on the outside. More specifically:

  • Contributors track their working time and get rewarded, at the end of each month, with a number of tokens proportional to their tier (higher tiers yield more tokens per hour)
  • Tokens will grant the contributor a proportional weight on the resolution voting process, but also the ability to gain part of the profits of the company
  • If a Contributor wanted to sell their tokens, they would first have to offer them internally to the DAO Contributors at the nominal value of 1€ per token
  • If no one buys them within 7 days, the tokens are free to be transferred and sold anywhere in the secondary market at whatever price the tokens are traded
  • Additionally, the Contributor can pledge them to the DAO, who would then take care of the exchange in EUR

A lot more is contributing to the correct functioning of this engine. We recommend having a look at our legal documentation, which explains with abundant detail the mechanics of the DAO.

How we built it

Creating the groundwork to bring the first Neokingdom DAO to life (Teledisko DAO) required an initial effort that has been purely legal.

Since its inception, more than a year has been spent by the team to get the legal foundation that could guarantee the lawfulness of our initiative. It will take time for our DAO framework to merge perfectly with the Estonian legal framework. But given how closely we worked with the Estonian government, we are confident that any upcoming issue will be addressable without legal troubles.

Once the first draft of the Article of Association and the Shareholders' Agreement has been completed, we started developing the Smart Contracts and the dApp on top.

It took approximately 6 months to have a release candidate.

The core DAO is composed of a constellation of 4 Smart Contracts, implementing the different access rights, the governance processes (resolution management and voting), and the tokenomics.

Around the core there are indeed companion services:

  • the dapp, used to track the time, manage the tokens and deal with the resolutions. The public audience can only look at past and ongoing resolutions.
  • the mailer: to make sure there is participation in the DAO, all the legally relevant events are automatically mailed to the contributors. For example, when a new resolution enters its voting period, a notification email is sent to all Contributors.
  • Odoo: this is the backbone of the organization, as it allows the DAO to create and organize projects, tasks, time, and Contributors data.

We also needed a Euro stable coin for trading our tokens internally. We were happy to find that the e-Money EEUR stablecoin is part of the Cosmos ecosystem, so we pushed to integrate that in EVMOS, and we had the opportunity to work with some validators:

  • We started a conversation in the commonwealth forum to register EEUR.
  • We asked Notional to create an IBC channel between e-Money and EVMOS.
  • We asked Swiss Staking to help us create the governance proposal to add EEUR to EVMOS.

The output was:

  • A successful registration of the EEUR token in EVMOS (see proposal 56)
  • Integration of the IBC channel in the e-Money wallet.

Challenges we ran into

The main challenge for the development of this first implementation of the DAO has been the connection between law and code.

When we needed to start developing the Smart Contract, we actually decided to spend the first weeks thoroughly studying the Article of Association and the Shareholder Agreement. The main point was to get to a very clear understanding of how the law could be automated with code, and this required quite a few iterations with the lawyers.

Once that was done, things actually went pretty smoothly: we had very clear and non-ambiguous requirements. Indeed there has been some minor adjustment on the way, but no major scope change.

Accomplishments that we're proud of

First of all, we are really proud of how smooth the collaboration between people coming from completely different professional branches (legal and technical) was.

We are also really proud of the usability of the DAO. Even the less crypto-savvy people found no friction in understanding how to vote on resolutions, create them, offering tokens, etc.

We knew beforehand that it was possible to register ERC-20 tokens in EVMOS, but we had no idea how. We asked the community in the EVMOS discord and they were all really helpful. It was a bit more challenging than expected as we had to first establish an IBC channel between e-Money and EVMOS, but Notional was very helpful and set this up for us. We are really happy that thanks to our (and others) efforts now people can use EEUR in EVMOS!

What we learned

The experience we gathered over the last years was, for all the technical people involved, very diverse. Yet this was the first time we actually try to implement the law. The implication is that anything from a bug to a simplistic implementation of a feature could lead not only to a "weekend of firefighting", but actually to a traceable issue with potential legal implications for the business run on top of the DAO.

This was one of those occasions when the focus had to be on understanding 100% of the requirements and making sure that nothing is overlooked.

Sure, our contracts are updateable (as they are deployed behind proxies), but the legal back and forth that would be required the amend a faulty state in the blockchain would be way more annoying than just a few users not being able to access a service.

How to register new tokens as ERC-20 in EVMOS.

What's next for Neokingdom

Teledisko DAO is the very first neokingdom, and we are working to onboard new companies.

We are also working to make sure that neokingdom's legal framework is compliant with the Estonian Government's legal regulation, to allow us to scale and replicate the legal and technical infrastructure to new companies willing to undertake the same transition and become neokingdoms.

The next use case to follow soon after is the NFT Streetart platform www.metawalls.io.

In a hopefully not-so-far future, Neokingdom will become the roof under which many other DAOs will be born and nurtured.

When Neokingdom DAO is battle-tested, it will become a viable alternative to the classic top-down model, where employees sell their time for a salary, without ever becoming part of the company.

Imagine a future where even small companies gain some of the benefits of publicly traded companies, where rewards depend on time investments (not titles), and where contributors share a purpose.

That's Neokingdom DAO.

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