- What is the Flow State Cooperative?
- Understanding Coop Patronage
- 1. Recognition: Earning Public Goods Cred
- How You Earn Public Goods Cred
- Key Features of Public Goods Cred
- 2. Redemption: Converting Cred to Flow State Distribution Units
- How Redemption Works
- Why Redeem?
- An Example to Illustrate the Recognition + Redemption Process
- Scenario
- Members
- Calculating Distribution Units
- Dividend Distribution
- Membership Classes and Activities
- Summary Table
- Technical and Legal Considerations
- Key Points to Remember
- Your Input Matters!
What is the Flow State Cooperative?
The Flow State Cooperative is a community-driven organization that supports the development and growth of the public goods economy. By becoming a member, you can earn Patronage dividends based on the coop’s net profits for your contributions to public goods and the Flow State platform.
Understanding Coop Patronage
Our patronage system is designed to recognize and reward members for their value-add activities made to the public good. It implemented as a two-step process:
- Recognition
- Redemption
Let's explore each step in detail.
Opolis (a fellow Colorado-based Coop) released a white paper exploring the power of coops & patronage combined with web3 if you want to nerd out on the details of the model!
1. Recognition: Earning Public Goods Cred
Public Goods Cred are tokens used to publicly account for contributions to the public good. Think of them as a way the cooperative says, "We see your efforts and want others to see them too!"
How You Earn Public Goods Cred
There are different classes of coop membership, each with specific activities that we can trace impact to the public good:
Membership Class | Who They Are | How They Earn Public Goods Cred |
Class A - Funders | Members who stream funding to projects. | - Contributions to matching pools
- Direct contributions to grantees |
Class B - Builders | Members contributing to public goods while funded through Flow State. | - Receiving funding for their work |
Class C - Contributors | Members who contribute labor directly to the cooperative (developers, designers, etc.). | - Contributing to code repositories
- Completing designs or managing projects
- Writing documentation
- Onboarding new members |
Class D - Holons | Projects or communities using Flow State to manage their resources. | - Utilizing Flow State for funding allocation
- Paying for platform usage |
Key Features of Public Goods Cred
- Real-Time Recognition: Creds can be earned continuously as you contribute.
- Transparency: Implemented as blockchain-based tokens for openness and accessibility.
- Transferable: These points can be transferred between members.
Important: While Public Goods Creds recognize your contributions, they do not directly entitle you to patronage dividends (i.e. coop profit distributions). For that, you need to redeem them!
2. Redemption: Converting Cred to Flow State Distribution Units
To participate in patronage dividends (actual cash returns), you need to redeem your Public Goods Cred for Flow State Distribution Units.
How Redemption Works
- Eligibility: Only members of the cooperative can redeem Cred.
- Process:
- Redeem Coop Points: Exchange your Creds for Distribution Units at a ratio determined by the cooperative's policies.
- Non-Transferable Units: Distribution Units are recorded on the blockchain but cannot be transferred to others.
- The exchange rate between Cred and Distribution Units may be updated time to time by the cooperative's board.
Why Redeem?
- Access to Dividends: Only Distribution Units (not Cred) count towards the apportionment of patronage dividends.
- Participation: Engage more deeply with the cooperative's success.
An Example to Illustrate the Recognition + Redemption Process
Let's make this concrete with an example:
Scenario
- The cooperative has $10,000 in net margins to distribute as patronage dividends.
- The board has set the redemption ratios:
- Funder Cred: Redeem at 2:1 (2 Creds for 1 Distribution Unit).
- Builder Cred: Redeem at 1:1.
Members
Member A | Member B | Non-Member C | |
Funder Cred | 50 (10 redeemed) | 50 (50 redeemed) | 1,000 (0 redeemed) |
Builder Cred | 100 (70 redeemed) | 0 (0 redeemed) | 10 (0 redeemed) |
Total Distribution Units | 75 units | 25 units | 0 units |
Calculating Distribution Units
- Member A:
- Funder: 10 Cred ÷ 2 = 5 Units
- Builder: 70 Cred ÷ 1 = 70 Units
- Total Units: 5 + 70 = 75 Units
- Member B:
- Funder: 50 Cred ÷ 2 = 25 Units
- Total: 25 Units
Dividend Distribution
- Total Units Redeemed: 75 (Member A) + 25 (Member B) = 100 units
- Dividend Per Unit: $10,000 ÷ 100 units = $100 per unit
Member | Units | Dividend Received |
Member A | 7 | 75 units × $100 = $7,500 |
Member B | 25 | 25 units × $100 = $2,500 |
Non-Member C | 0 | $0 (not a member, no redeemed Cred) |
Key Takeaways:
- Only redeemed Creds count towards dividends.
- Non-members, even if they have Creds, do not receive dividends.
- The amount of money you receive is proportional to your Distribution Units.
Membership Classes and Activities
Here's a summary of the membership classes and how they participate:
Summary Table
Class | Who They Are | Patronage Activities | Patronage Distribution Mechanisms |
Class A - Funders | Members who stream funding to projects. | - Contributions to matching pools
- Contributions to grantees | - Return stream of Cred tokens as long as the funding stream is open
- Superfluid mechanisms |
Class B - Builders | Members contributing to public goods while funded through Flow State. | - Receiving funding through Flow State | - Streaming matching
- Direct allocation of Cred |
Class C - Contributors | Members contributing labor to the cooperative or platform. | - Contributing to code
- Completing designs
- Managing projects
- Onboarding | - Peer evaluation (e.g., Coordinape)
- Guild streams
- Contribution weighting |
Class D - Holons | Projects or communities using Flow State to allocate resources. | - Using Flow State for funding allocation
- Paying for platform usage | - Percentage of the community's Flow State volume
- Retroactive patronage |
Technical and Legal Considerations
- Two-Tier System: Separating recognition (earning Cred) from redemption (converting Cred to Distribution Units) helps maintain flexibility and ensures compliance with legal requirements.
- Blockchain Integration: Using blockchain technology for tokens and units promotes transparency and efficiency.
- Governance: The cooperative's board sets policies, including redemption ratios and eligibility criteria.
- Membership Changes:
- Inactive Members: If a member becomes inactive or leaves, their Patronage Units are removed from the active ledger (after distributing any pending dividends).
- Returning Members: If they return, their units can be reinstated.
Key Points to Remember
- Membership Matters: Only cooperative members can redeem Cred and receive dividends.
- Active Participation: Stay engaged to maximize your benefits.
- Redeeming Points: Don't forget to redeem your Public Goods Cred if you want to participate in dividend distributions.
- Governance Participation: As a member, you may have a say in cooperative decisions, including how points are allocated and redeemed.
Your Input Matters!
The cooperative is planned to launch in Q4 2024, we welcome your ideas and feedback. Your participation can help shape:
- Policies and Procedures: How should Cred be allocated? What activities should be rewarded?
- Governance Structures: How can we ensure fair and inclusive decision-making?
- Community Building: How can we foster a strong and supportive community?
Please share your thoughts with us by joining this Telegram group. Together, we can build a cooperative that truly reflects our shared values and goals.
Visit flowstate.network to learn more and join the Flow State Coop.