Governance System

Governance System

Telcoin Association: Rationale

The Telcoin Association enables Platform miners and groups to benefit from the same protections, clarity and resources they enjoy for incorporating formal legal structures in the physical world of property in the digital.

Overview

The Telcoin Platform is a blockchain system, openly accessible to anyone with an internet connection, making it costly to exclude users from accessing the system. Users are highly incented to participate in the Telcoin Platform as it generates flows of scarce TEL units which are coveted in rivalrous consumption. The result is the Telcoin Platform is a common-pool resource governed by a common property regime, which is largely open to anyone and which operating normally incents large volumes of participation. Thus, the Telcoin Platform needs a flexible method of operation and governance that can facilitate its goals with the above expected operational requirements.

Many similar types of decentralized organizations for communal ownership of crypto-systems have thus far operated with no formal legal structure. In other words, most decentralized crypto governance systems to date are de facto organizations that are regime-less in legal structure and are basically just a group of individuals. This method of organization makes operation inefficient and exposes individuals to unnecessary liability.

The Telcoin Platform wrapped in a Swiss Verein enables these same individuals to operate in a decentralized manner of governance and enter into collectivities that are involved in using and withdrawing benefits from and managing crypto-systems in the same way tangible assets are in the physical world.

Telcoin believes that blockchain-based common-pool resources self-governed by local users and groups should be able to benefit from the same protections, clarity and resources they enjoy from incorporating formal legal structures in the physical world of property in the digital world of property.

The Swiss Verein enables that.

Relative Advantages: Legal structure vs regime-less structure

  • Legal Recognition: Recognition as a legitimate organization by a national and local government grants legitimacy to Miners’ collective authority to devise and enforce their own rules in the eyes of governance officials.
  • Banking: Incorporating formally empowers Council Members to open up bank and other traditional financial services accounts in the name of the Association.
  • Administration: By creating an official legal entity, miner councils can enter into contractual arrangements with third party services providers to administer the collective operation and regulate production of public goods for the community in accordance with its collective standards.
  • Taxes: Legal recognition gives Council Members clarity when filing taxes related to council member income. Legal and Political Interests: Without a legal organization, Council Members may not be able to represent the interests of the miners before administrative or judicial bodies.
  • Liability Protection: A legal organization may give Council members limited liability protection in relation to their activities in the Association’s operation and governance.
  • Legal Protection: A legal organization allows the community to avail itself to governmental enforcement mechanisms (e.g. courts and police) to protect itself against those persons and entities that would do it harm.
  • Compliance: A legal organization allows the community to effectively and efficiently implement tailored proactive policies and procedures reasonably designed to protect community members from legal and regulatory scrutiny.
  • Accountability: Without official recognition of the right to organize, it will be quite difficult to hold either miner council Members or individual actors accountable for their actions.
  • Record-keeping: The legal structure will facilitate the necessary recordkeeping necessary for community members’ legal and regulatory obligations such as tax and other reporting. actions.
  • Legitimate Rules: At scale, as the platform continues to develop and market opportunities arise for surplus products, the level of conflict over the allocation of TEL issuance to different miners is likely to escalate. If government agents use their authority to support those who refuse to follow the rules of a regime- less organization, it is hard for the other participants to continue following the rules either. Without formal, legal recognition, a regime-less organization may crumble rapidly when its authority to make legitimate rules for its own members is challenged and not supported by the formal government of a regime.
  • Basis for Evolution: The Association gives a solid base for polycentric governance and development while ensuring community involvement and expectations are respected.

    • Domicile: Switzerland in the Canton of Ticino in the City of Lugano

    Overview

    We made the choice to domicile the Telcoin Association in Switzerland in the Canton of Ticino in the City of Lugano for a variety of reasons.

    Switzerland has been a world financial center for centuries. It has developed legal precedent and structures that are well-adapted to the operating model of decentralized organizations and the Telcoin platform in particular. This support of decentralization is not limited to crypto. For example, 25% of all forestry, a common pool resource, in Switzerland is managed by common property regimes wrapped under a Swiss Verein Association Structure.

    Lugano, Switzerland in particular, has demonstrated is forward acceptance of cryptocurrency by integrating it into its government and community operations (see for example its Plan ₿https://planb.lugano.ch/ ). Further, this general area is home to the Crypto Valley Association, an independent, government-backed body that seeks to leverage Switzerland’s strengths to develop a crypto and blockchain hub for businesses from around the world. The Swiss Verein, for purposes of solidifying its connection to Switzerland may have at least one resident of Switzerland as a Council member, and the talent pool attracted to this crypto center will enable the Association to obtain top talent for that position as well as other human resources needed.

    Lastly, Switzerland is centrally-located globally and thus accessible to community members worldwide.

    Swiss Verein Entity Structure

    A Swiss Verein is an association (“Verein” in German, “association” in French, “associazione” in Italian). In its simplest terms it is a group (people and/or entities) that come together as a group to conduct an activity. This sort of group action is done all of the time. You may have known these types of groups as “clubs” or is a legal structure in Swiss law, similar to the Anglo-American voluntary association - better known as a “clubs,” “societies” or “consortiums.” In a Swiss Verein, this informal mechanism for group action is given legal structure and recognition, allowing the individuals to truly act as a group while giving them legal abilities and protections attributed to other more formalized legal entities. In sum, it allows informal decentralized operation within a legal corporate-type structure. This makes it most suitable for a decentralized operation such as the Telcoin platform. More specifically:

    Why wrap Telcoin governance in a Swiss Verein legal structure?

  • Decentralized: A verein by its very nature is a corporate organization that is decentralized. Switzerland regulation is the applicable law and this law supports the decentralized nature of its operation. The very law was set up to support decentralized operation. This is not a situation whereby a decentralized organization is trying to be fit into an existing regulatory structure that did not contemplate a decentralized operation. Rather, Swiss law was created with this very type of organization in mind. Thus the Verein is a suitable arrangement for Telcoin as an openly-accessible, blockchain-based platform embedded in the internet and an international, decentralized community seeking to self-govern their interactions with each other and with the system autonomously.
  • Global: Vereins provide a participation mechanism for geographically dispersed blockchain projects without a central location. The organization structure facilitates the interaction of community members with the system and with each other from locations all over the globe.
  • Separation of Powers: The Swiss Verein is structure enables the checks and balance of a coordinated but decentralized governance so that the community is adequately represented and also protected from concentrated control which may occur in traditional hierarchical legal structures.
  • Limited Liability: Members liability is limited with the Swiss Verein providing a limited liability wrapper around a common goal. This protects, enables and incents not only members, but service providers interact with and work on behalf of the collective community.
  • Separate Legal Personality: Vereins have a separate legal personality, just like companies or foundations.
  • Flexibility: As long as the Association is non-profit, there is no filing requirement. Meaning Vereins can be willed into life via a simple governing document called a Constitution. The Constitution’s requirements and powers are, in the case of the Telcoin platform, facilitated by a smart contract. Community members can participate as individuals or legal entities.