Managing Shared Expenses

Shared expenses have a cost that need to be fairly distributed. As usual, individual choice provides the solution.

Your Participants Are Your Bank.

An aftok doesn't have a bank account; it can't, because that would cause a dangerous centralization of project resources that could be difficult to manage fairly in the case of a fork. Instead, it is the participants' savings from their individual shares of the project revenue that provide operating capital. This section describes how the system can help you coordinate payment for shared expenses.

Managing shared resources presents one of the only situations where collective decisionmaking is necessary. The collaborateive payments interface provides an auction-based mechanism to help address this problem in a manner that is maximally fair to all the participants. The system is designed to minimize the amount of shared consent necessary, instead favoring individual action. Collective ownership of indivisible resources is a problem beyond the scope of this platform to solve for right now, so ideally any resource that is needed should be either individually owned, or, if used by all, then rented.

The primary objective of this system is to to provide an equitable means for raising money to pay for a rented resource from among the collaborators of an aftok. To do so, units of time (the primary aftokian unit of account) are sold at an internal auction to raise the money required.

You can think of it this way. If someone is contributing money to purchase a shared resource, effort was required in the past for them to obtain the money that they are contributing. This contribution of money is thus tantamount to a contribution of some amount of their time, and spending that "saved time" on a shared resource represents an assumption of some risk that should eventually be rewarded by a share of future revenue. The purpose of the auction process is to determine what amount of time their monetary contribution is worth.

The Auction Process

Contributors can use the auctions interface to initiate, find, and bid in auctions, and to fund successful bids upon completion.

The auction process follows a few steps:

  • 1

    First, a vote must be held to determine the amount of money to be raised in a shared resource auction; an auction involves the allocation of new logged units of time and consequently dilutionary pressure that will be felt by all the collaborators in the aftok, so it is important to obtain the consent of those affected before proceeding. In addition, an election may be used to determine one or more designees who will be responsible for renting or otherwise handling the acquisition of the shared resource once the auction is complete.

  • 2

    If the vote passes (if a nonzero amount is selected by the weighted range vote) then a Dutch auction opens. Each collaborator may then place bids, where a bid consists of both a monetary amount and the amount of time that they expect to receive in exchange if they win.

  • 3

    When the auction closes, bids are sorted in descending order by the ratio of currency to time expressed by each bid. Then, the top bids are accepted until the amount of money that the auction seeks to raise has been reached. Each winning bidder will be awarded the amount of time specified in their bid upon payment of the monetary amount of the bid to the auction's designee. Since the winning bids are those with the smallest amount of time awarded per monetary unit, the dilution collectively suffered by members of the aftok is minimized.

The designee of a shared resource auction is a position of trust, and so such an individual should be selected with care. In the future, it may be possible to use automation to replace the individual role in this operation when purchasing from organizations which accept cryptocurrency payments by way of multi-signature transactions, but at present as most resource providers still require payment in fiat currencies, a human intermediary is required.

A final note with respect to ownership of shared resources. There is, course, nothing preventing a subset of collaborators from making an external agreement for shared ownership of a resource that is then rented to the aftok; however, the particulars of such agreements are at present outside the scope of what is addressed by the platform.

The fact that an aftok doesn't own property, and only raises money for shared expenses from among its members in an on-demand fashion enables one of the other unique features of the aftok system: it's almost trivial for organizations to split into smaller groups responsible for different parts of a business, or merge multiple groups to form a new entity. Read more about forking and merging here.

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See how to put these principles into action