Regeneration at Institutional Scale
Announcing Kolektivo’s Bluepaper and Seed
Kolektivo’s seed offering is here. From this seed, Kolektivo dares to imagine a distributed network of local economies regenerating their communities and landscapes at scale.
This post breaks down the why, who, what, and how of Kolektivo, going over its many organizations and major Web3 elements, such as its open-source components. In essence, this post provides a basic summary of the Kolektivo Bluepaper.
Why Kolektivo: The Big Picture
In recent decades, local communities have been hit hard by global crises such as climate change. Many communities are facing tall challenges, such as biodiversity collapse, water shortages, and declining or stagnant standards of living. Altogether, there is a strategic need to rethink how local institutions can be better equipped to adapt to these many overlapping issues.
To address this, alternative economic theories have proposed breaking away from traditional economic thought, insisting that the economy, society and environment do not exist independently. Instead, they are dependent on each other. That is, the economy cannot succeed unless people are well off, and people cannot be well off without a healthy, life-giving environment. Kate Raworth’s Doughnut Economics proposes new economic indicators to better measure those social and environmental metrics required for a well-functioning economy. Principally, these metrics seek to understand where human needs are not being met, or where resource consumption exceeds environmental limits.
It is at the intersection of these two ideas — the strategic need for adaptive, locally focused institutions, and the tactical need to measure and work towards an ideal social and environmental outcomes — that Kolektivo emerges.
“Blockchain-based coordination may enable new types of economic activity … bringing economic coordination and governance institutions to spaces that are currently either poorly served or not served at all by extant coordination mechanisms… it is an institutional technology.”
Kolektivo takes the perspective that blockchain and Web3 technologies are institutional innovations. You’ve probably already heard of “DAOs” — decentralized autonomous organizations — the catch-all label for the types of institutions that Web3 can produce. At their most basic level, DAOs are simply organizations that operate in part or in full on a blockchain. In the past few years, DAOs have proven themselves to be fast growers, with $10.5b of assets under management (AUM) as of September 2022.* In some cases, DAOs have acquired hundreds of millions USD in funding and AUM in very short timespans, e.g. less than a year.** Needless to say, they are powerful engines for bootstrapping online communities.
Despite these impressive capabilities, the vast majority of DAOs have failed to break into the real-world. Kolektivo aims to take up the lessons learned from four years of DAO experimentation and apply them to real-world impact. It does so as an active, collaborative network and framework situated in the emerging Regenerative Finance (ReFi) movement, which proposes to use Web3 technologies in service of the underlying material reality of people and the places they live.
Kolektivo’s people and planet-centered approach aims to reaffirm local independence and bottom-up processes, empowering autonomy in existing and upcoming communities who want to harvest value from the life-giving ecosystems they already manage. To this end, the Kolektivo Framework is a collection of institutional ReFi technologies that allow local communities to launch, finance, and govern their own local regenerative economies, or community economies. In turn, the sum of the network of community economies make up the Kolektivo Network.
* Statistics provided by Deepdao.io
** See TempleDAO: a decentralized, online community
The Who: Introducing the Kolektivo Network
The Kolektivo Network is made up of multiple stakeholder groups who occupy different niches at different scales. Elinor Ostrom, recognized for her work on the collective management of the commons, writes about polycentric governance, where the decision-making bodies in a group overlap depending on the multiple related contexts of the problems they are trying to mutually solve. Following this, the Kolektivo Network is polycentrically structured due to the complex nature of the issues it faces. As a collaborative network operating at global and local scales, the hope is that Kolektivo’s members can respond effectively by working together on the myriad challenges they face.
- At the local level, Kolektivo’s community economies exist somewhere in the material world — such as Kolektivo’s first community economy in Curaçao. They are governed locally by their community members — the ones best qualified to make decisions primarily concerning their territory and peers. Examples of local problems include questions of which crops to grow, which impact organizations to issue grant funding, or which reputable merchants to do business with.
- At the global level, there are two different primary sets of actors: builders/partners, and Kolektivo Network Token (KNT) holders. Builders/partners focus on network-wide problems that tend to repeat themselves with every community economy, with the main distinction between builders and partners being their general level of network engagement. The types of issues they provide solutions for include technical development of the Kolektivo Framework, solving legal or regulatory hurdles, or the onboarding of new community economies. They are constrained by the governance of KNT holders, who in general hold the purse of the network. Despite the global position they occupy, these groups have no governance authority over local community economies: they cannot, for instance, choose which crops to grow, or on-the-ground impact organizations to fund. Instead, they primarily exist to solve recurring network problems and seed new community economies.
Today, Kolektivo counts six key builder organizations, with many more partners:
- Astral Protocol is dedicated to the creation of location-based Web3 applications that interact with the real world.
- Byterocket provides expert software development and smart contract security services.
- Curve Labs provides mechanism design, front and back-end development, thought leadership, UX/UI design and project management services.
- Kolektivo Curaçao is the first Kolektivo community economy. For the past four years, it has supported local changemakers in Curaçao, protecting the environment and organizing impact projects through multiple Web3 pilots.
- Kolektivo Labs is a Web3 systems innovation lab that provides product design, business development, and ecosystem building services.
- Zed Labs is a boutique Web3 agency specialized in mobile development, and the lead maintainer of the Kolektivo wallet.
Visit the Kolektivo website to learn more about its ecosystem of partner organizations.
The What: Technologies of the Kolektivo Framework
The Kolektivo Framework is made up of a suite of technologies for the quick and easy deployment of community economies. The Framework’s ultimate objective is to empower local communities to — as an alternative to current dominant institutions — govern and finance their regenerative efforts. This section will briefly cover each key technology in turn.
Local Reserve and Token
A Kolektivo Reserve is the economic center of a community economy. In general, each community economy is likely to have its own reserve with its own Reserve Token — a sort of DAO token for itself. Each reserve includes certain economic parameters that are modifiable by elected community representatives. In practice, these parameters include price floor and ceiling mechanisms that prevent the Reserve Token from detaching from the real value of the community economy. Local reserves are an innovative attempt to allow communities to achieve financial independence and autonomy by providing them monetary powers that they previously did not have.
“Money can be beautiful.”
– Rene Reinsberg
A community currency can be understood as a currency that is not issued by a national government and is intended to be exchanged only in a predetermined area — e.g. the island of Curaçao. With it, participants carry out daily exchange of goods and services. Community currencies are generally pegged to the national currency in which they are based.
Badges are customizable non-fungible tokens that can assign system permissions or be purely cosmetic. Badges ensure that people with the correct skills or knowledge are responsible for decisions in their area of expertise, making Kolektivo’s governance flexible to any community’s already-existing governance structures.
The local issuance of grants creating real-world impact are a key part of Kolektivo’s design philosophy. To facilitate their issuance, an interface is being developed that lets community representatives holding certain badges to vote anonymously for the allocation of funds to local projects. Consequently, project leaders can easily apply for a grant and follow up on the status of their request.
Cryptocurrency wallets are used to track ownership of, receive, and spend cryptocurrencies, as well as engage with smart contracts. The Kolektivo’s Wallet is optimized for local communities, and will permit community members to, among other actions:
- Transfer community currency to anyone who has a phone number.
- Purchase phone data credits and gift cards from the Bidali marketplace.
- Nominate relatives as “guardians” to recover their wallets.
The Impact Map
The cornerstone of Kolektivo’s ecological approach is the Geospatial Non-Fungible Token (GeoNFT), a virtual representation of any type of existing territory — from a wild forest to a farm. Split from this digital twin of land or sea are a proportional-to-area number of fungible ecological tokens.
Ecological tokens draw their value from the wide range of functions they can perform. Kolektivo proposes the creation and management of GeoNFTs and their corresponding ecological tokens through an Impact Map: an interactive interface that provides key coordination support for the community economy. It will not only display the community’s GeoNFTs, but also relevant key information — such as environmental index ratings. While development of the Impact Map is still early, it’s imagined that the map will allow users all around the world to:
- Mint, pool, or fractionalize their GeoNFTs into ecological tokens.
- Purchase access to the ecological data of a specific piece area represented by a GeoNFT — here, ecological tokens can be understood as data access tokens.
- Engage in territorial staking, where users lock tokens and build a score over time that provides rewards or access to a land’s outputs, such as carbon offsets.
- Incubate new territorial DAOs made up of capable land stewards, regenerative agriculture experts, or conservationists.
- Engage in DAO-to-DAO interactions, such as a token swap between two different territorial DAOs with their respective ecological tokens.
The collection of ecological data that feeds into GeoNFT datastores permits the creation of a new type of parametric environmental insurance, hypothesized by Kolektivo to be a future paramount ecological asset. This innovative type of ecological token would automatically release funding when a negative change in certain ecological parameters is reported, helping automate restoration. In this arrangement, third parties stake ecological tokens through the impact map to underwrite ecological risk.
The How: Seed Community Economies Everywhere
The Kolektivo Network aims to quickly scale to form a distributed network of community economies all around the world, targeting specifically those regions underserved or harmed by modern finance. To get things started, the network is launching its own token — the Kolektivo Network Token (KNT) — which will provide some governance rights over the network and seed the first ecological assets.
In an ideal scenario, Kolektivo would seed three to five different community economies shortly following its MVP launch. In turn, each community economy will produce ecological tokens representing its constituent ecosystems — a portion thereof distributed to the Kolektivo Network’s Treasury to support network-wide objectives. The knowledge gained from this post-MVP experimentation will help define a roadmap to regeneration for all the community economies to come.
Kolektivo Curaçao: The First Community Economy
Kolektivo’s MVP launches in Curaçao, an island nation located in the southern Caribbean. Kolektivo Curaçao is the latest and largest initiative in a series of efforts to advance blockchain-based governance in Curaçao. It continues on from the CuraDAO, which launched early 2019, and its corresponding community currency CuraDAI, which launched early 2020. The first ecological assets to be tokenized will be its regenerative food forests.
To kick-start the first Kolektivo community economy, a Kolektivo Festival has been organized in Curaçao on October 22nd, bringing together major ReFi thinkers, community currency advocates, environmentalists and impact leaders. Come vibe!
In Conclusion, the When Is Now!
Institutions need Regenerative Finance. The Kolektivo Framework and its corresponding Network aim to provide a modular “regenerative economy in a box” and critical coordination services to the ReFi ecosystem. There is no better time to do so.
The great challenges of our era are not insurmountable. A new opportunity for bold Web3 experimentation is here and now, putting its technologies to their best possible use: restoring profit to its true meaning of bringing prosperity to people and serving the planet.
👉🏻 Interested in the seed offering? Register here.
The information herein is not intended as financial, legal, or investment advice and should not be construed or relied on as such. No material contained herein should be construed or relied upon as providing recommendations in relation to any legal or financial product. We provide no guarantee as to the accuracy of the models or claims included in this memo.