The Failure of Organizing Imagination#
Governments, companies, and non-profit organizations seem unable to address society's biggest challenges.
Certainly, these entities have done a lot of good in the world, but they also have serious structural flaws. Governments may be slow to respond and easily influenced by special interests. Non-profit organizations struggle to generate meaningful impact because their charitable support is often unreliable and difficult to scale. Companies excel at innovation but are increasingly captured by the financial system, which sees them as wealth extraction machines.
Simply managing these institutions better will not solve the problem. To sustain large-scale innovation for the public good, we will have to change the way we organize ourselves. For this, we need new types of organizations.
Rethinking Value on the Blockchain#
Building these new organizations requires rethinking some fundamental assumptions about organizational purpose and economic value. The good news is that we are in the early stages of a technological revolution that will help us do just that.
Blockchain represents the third wave of the internet - the "Internet of Value." This new technology decentralizes computation, making it difficult for intermediaries like Google, Amazon, and JPMorgan to act as gatekeepers of economic transactions. The resulting freedom is not just about creating a fair competitive environment. It creates space to redefine what we consider valuable. Blockchain enables us to move transactions into new economic networks that organize around something more than just maximizing returns for shareholders.
Accelerating Organizational Design#
The ability to question value assumptions is a tremendous lever for driving other types of organizational goals. When combined with blockchain-based tools, this lever opens up a set of economic "building blocks" that fundamentally expand the possibilities of organizational design.
Increased flexibility reduces the time and cost of organizational experimentation, which is crucial because we don't have time now. Challenges like climate change and biodiversity collapse won't wait for humanity to come together. We need to conduct a large number of experiments to reorient human organizations to better address these crises - and we need them urgently.
Modularity as a Catalyst for Novelty#
Modularity is how we do this. It is an extraordinary force for iterative design. Through it, we combine useful parts to create new functionalities without reinventing the wheel every time.
In Endless Forms Most Beautiful, Professor Sean B. Carroll explores an ancient "toolkit" of Lego-like regulatory genes. This toolkit made the Cambrian explosion possible - and with it, the basic body plans of most existing animals. Fast forward millions of years, and technology will do something similar. In The Nature of Technology, economist Brian Arthur shows how technology emerges from more basic building blocks through a process he calls "combinatorial evolution." By piecing together these blocks, we stand on the shoulders of giants.
Modularity creates infinite possibilities and is as powerful a force as evolution itself.
Blockchain Modularity#
Modularity applies to multiple levels within the blockchain:
Tokens transform various assets - money, driver's licenses, car ownership, company equity, even artwork - into virtual objects that can be easily stored on the blockchain. Tokens represent economic value and can be manipulated easily through blockchain-based software called smart contracts.
Smart contracts work similarly to software libraries and application programming interfaces (APIs) on early computing platforms. The modular approach to software development allows one program to securely access the functionality of another program without reinventing the wheel. Placing smart contracts on public blockchains allows anyone to use them without permission, further extending their modularity.
The next level of blockchain modularity blends tokens, smart contracts, and organizational processes. These "cryptoeconomic primitives" serve as reusable patterns for abstract workflows, making them easily replicable across organizations. Examples include prediction markets, token-curated registries, and augmented bonding curves. These building blocks leverage the synergy of combining economic assets, workflows, and software, further amplifying the modularity of blockchain. Cryptoeconomic primitives make decentralized autonomous organizations (DAOs) and future forms of economic coordination that we can't even imagine today possible.
Token Engineering#
In summary, the new wave of technological modularity is helping us overcome the shortcomings of how organizations today create and recognize economic value. But who will use these new organizational design building blocks?
"Token engineering" is an interdisciplinary practice that applies blockchain modularity. It combines software engineering, mathematics, economics, machine learning, law, governance, and many other fields.
Over the past few months, I have been fortunate to participate in what I can only describe as a community-driven historical experiment in token engineering. After months of collaborative exploration of cryptoeconomic parameters, the Token Engineering Commons identified a combination called "Goldilocks" (because it's just right). This design sets the terms for how investors can enter and exit our organization through a fully automated "augmented bonding curve."
This collaborative design process has made me not only optimistic about token engineering but fully bullish. It shows me that we can use this new field to design organizations that truly serve the purposes and values of communities.
Building a Better Future#
Of course, it is crucial to turn these hopes into reality. Like many early tools, blockchain can easily be used to concentrate wealth and power. Venture capital already holds significant equity in important blockchain projects that can be used to attempt control, just like in Web 1 and Web 2.
Equally important is to note that token engineering itself will not bring about the changes we need. Organizational workflows are complex. They interact with many systems - including those mysterious social biological systems we call humans. That's why we also need investment in governance, community, culture, and professional development, to name a few.
But make no mistake, token engineering is crucial to changing the way we organize ourselves as humans. These Lego-like building blocks will crack open the potential economic models and value flows that define organizations. Yes, it will take other disciplines, but token engineering is the way we connect those other practices to the Internet of Value. It is the interface that humans use to inject our deepest values and hopes into our machine networks. It is the interface through which we write solutions to the current crisis and lay the foundation for an extraordinary new civilization.
Twitter: Hoodrh
Author: Gideonro
Translation: Hoodrh