Overview
Most tokens don’t give you real ownership. The team controls the treasury, the IP, and a huge chunk of the supply. Token holders have no power. Founders can do whatever they want, including shutting it down and walking away with the money. Ownership coins work differently. The valuable parts of the organization—intellectual property, treasury, mint authority—are controlled by decision markets.[1] Legal documents and smart contracts enforce that this is the case. Teams must work to create tokenholder value or risk getting ousted by the markets. There’s no legal document saying that tokenholders own anything. But decision markets protect you from poor or biased decisions that would tank your tokens. What’s good for the token is good for the token holder.What makes a token an Ownership Coin?
Two things:- Treasury governed by decision markets: money sits in a treasury with market oversight so that the team can’t easily rug it.
- Key IP governed by decision markets: the key IP, which includes social media accounts, domain names, created software, and the like is assigned to an entity with decision market oversight. The team can’t build a product with tokenholder money and then rug them once the product is successful.
How “ownership” works under decision markets
| Normal ownership | Decision markets |
|---|---|
| Shareholders have a say and can vote | Market price is the decision |
| Shareholders have a contractual claim on residual equity value in the event of a liquidation or sale | Market price is the decision |
| Operators have a fiduciary duty to shareholders (or lienholders, in the case of insolvency) and can be sued for breach of that duty | Market price is the decision |