This is an idea paper. Use github to participate.

TAVO 101

Shared truth-seeking in a non-violent environment.

The game

Business is an optimization problem of transforming resources into valued output.

Value requires optimal decision making (not governance) at 3 levels:

  • | Opportunity
  • | Strategy
  • | Tactics

TAVOs are designed to incentivize this optimization, recursively.

Player modes

Each player can choose a role best suited for them and play the game for their individual maximization.

There are 3 available roles:

  • Partner | Principal

    Founder mindset - exclusivity + skin in the game (not just sweat)

    Ideal for entrepreneurs.

  • Backer | Principal

    Investor mindset - status game + strategic value

    Status game of power is replaced with consent. Similar to Moloch.

    Ideal for entrepreneur that made it, and now paying it forward.

  • Operator | Agent

    Problem solver mindset + mastery of a skill - permissioned existence

    Ideal for the entrepreneurial mind seeking to build muscle.

Each role requires a different mix of capital and time contribution. The capital axis earns through asset appreciation and time axis through active cashflow.

TAVOs can also be public. In that case, there is an additional role:

  • Investor | Agent

    Profit mindset - control + pragmatism

    Serves the purpose of accurate price discovery of the TAVO's value and provides token liquidity.

Interesting Read:

Startups Need a New Option: Exit to Community | Nathan Schneider

Choosing a role

Each mode may accomodate infinite players. Choose what is your truth.

Each TAVO will end up with a unique personality based on the distribution pattern among all these roles. And the rules and scope set for them by the TAVO.

The Principal Agent Problem

There are 4 kinds of people in each team:

  1. People who don’t care for success of the business.
  2. People who care about business success when the ball is rolling.
  3. People who care about business success (even) when the ball gets dropped.
  4. People who care about business success irrespective of if the ball exists (or will exist) or not.

#1 need to be fired. #2 are short-term agents.

#3 are long-term agents and need to be empowered. #4 are principals.

Making an accurate choice will require self-awareness. Observe your natural tendencies, sans the pre-disposed mind. There is none that is virtous over the other.


Requires truth-seeking. Be actively searching for what is true, despite ego (i.e. pre-disposed identity/worldview).

Decision-making is the leverage here. Action capacity is a given.


Requires integrity at the core and an affinity to getting things done.

Action velocity is the leverage here.

Decision-making Model

Consensus is used for system-level decision making at layer 1 and layer 2.

Coherence is used for active decision making at layer 3.

Coherence affords players to make decisions in pursuit of the shared truth in runtime, achieved through mechanism design.

Modelling the mechanism rewards and costs on-chain, creates a (close to) trustless system.

Each TAVO has 3 layers of decision-making:

  • Governance | Layer 1

    Decides on (but not limited to):

    • Charter
      • Purpose
      • Values
      • Limits
    • Idea map
    • Token economic design
    • Token minting and allocation

    Chosen by the partners when initializing the TAVO.

    Modified using consensus from backers + partners.

    Responsible for:

    • Alignment to highest value path
    • Risk management
    • Enforcement of limits
  • System Design | Layer 2

    Decides on (but not limited to):

    • Ascend framework
    • Operating methods
    • Joining + exiting criteria

    Decided through consensus between partners

    Responsible for optimal mechanism design for operator layer.

  • Execution | Layer 3

    Decides on (but not limited to):

    • Critical constraint path
    • Specific Knowledge
    • Execution velocity

    Decided by each player using coherence. Sometimes led by a Partner.

    Responsible for:

    • Bringing ideas to life
    • Eliminating tactical ineffeciencies
    • Flagging new potential idea mazes

Each TAVO has a strategy that is voted in by its members. Like Moloch, if anyone doesn’t agree with the chosen strategy, they can exit with their pool of funds.

As a Partner, you get to patiently validate your 'view' using first principles, without making an attachment laden commitment to your idea.

As a Backer, you get to invest in strategies that seem high yield to you; instead of investing in teams and then taking the risk of an optimal strategy to emerge later.

As an Operator, you get to choose projects that have the highest probability of success (basis their transparent strategy); instead of having to chose basis coolness of ideas, or attachment to the team; and leaving success to serendipity.

As an Investor, you get access to a more decision effecient organisation with a higher probability of (not speculative) success.

TAVOs run on top of the main chain and inherit some base models on all 3 layers. Some of them are hard limits, others are suggestions. Complete list is here: Network Playbook

Decision-making process

Deep dive pending. Interesting ideas here.

Starting a TAVO

Each TAVO is initialized when partner(s) get together to seek a shared truth.


1. Idea:

This is the initial idea map of an opportunity of value creation.

This serves as the basis for coming together.

2. Charter:

  • Purpose: What does the TAVO aspire to achieve
  • Values: What does the TAVO hold inalienable
  • Limits: What is the TAVO unwilling to compromise on

3. Seed capital:

Each TAVO’s treasury must always be solvent. That is it can not have liabilities (including commitments made to operators and other stakeholders) greater than its assets. The first tranche is contributed by the Partners.


4. Invite Backers

This is non-mandatory.

The choice of terms and process to use is for the partners to choose.

5. Idea map

Collaborative ideation and then, consensus on opportunity being chased + year 1 strategy.

Any association from this point is with consent. That also implies that backers and partners can dissociate and take their remaining capital (like Moloch DAO) if they do not agree with the TAVO’s decision output.

6. Playbook

Ideal organsation is designed as a game, where operators work on quests to accomplish a specific goals (business objective) by choosing actions and experimenting along the way. As they make certain progress or achievements, they can earn psychic (eg. badges and experience points) and economic profit. Playbook is its documentation.


7. UBI starts

Web3 Governance may be overrated

To trigger a view: think corporate governance.

Wealth comes from creative pursuits.

Governance is not a creative pursuit. Governance exists because a power paradigm (between the govern-ed and the govern-ors) is needed; to prevent bad actors from eroding the general trust in the system. Power, as is its nature, uses punitive methods to do so.

Such methods are significantly limited in crypto. Why:

“For example, you can’t say in cryptoeconomics, “It’s illegal to bribe people,” because there’s really no simple way to define what a bribe is. If someone really wants to bribe someone else, he can just go and do that outside of the protocol, and the protocol would have no way to tell.

Whatever your rules are for rewarding, penalizing inside of the mechanism, they have to be specified as a piece of Solidity code, Viper code, whatever programming language you’re using in that set. That’s a much tighter constraint than policymakers writing laws have.

Another one is, of course, that all of the actors are anonymous, and what that means in practice is that you cannot drag people’s utility down below zero. If I have 70 ether, and I put that 70 ether into a mechanism, the worst thing you can do to me is you can take away that 70 ether."

Vitalik Buterin on Cryptoeconomics and Markets in Everything (Ep. 45) | Tyler Cowen

In the crypto world, these limitations free us to pursue non-violent methods of mechanism design.

This is an unsolved problem and will require fundamental innovation as we evolve. In the meanwhile, temporary bridge solutions have started to emerge.

An idea for a long-term solution:

Incentivize Actions, not Actors.

It is easy to see the game as made up of good and bad actors. This view is understandable given that we live in an identity/ego driven society. It may however, be untrue.

There are no good/bad actors; only good/bad actions. Each actor is capable of demonstrating both. Whatever action is more profitable (for the player) occurs. When it is congruent with the shared truth, it is called good; else bad. Usually, non-zero sum strategies create good outcomes and zero sum strategies, bad.

TAVOs use incentive design to make it more profitable to be a good actor, than be a bad one.

Next 12 months are whitespace to iterate on this incentive design in production and get it right.

Some methods in the current idea pool:

  • Limits: Used to screen new players, solicit consent and encourage self-responsibility. Any violation leads to disassociation. An incentive for association could be a default lock-in period for all tokens.
  • Affordance: for non-zero sum games only.
  • Commitments: are made at strategy level, not at TAVO level.
  • Non-myopia: All equity has a default and transparent lock-in period.
  • Risk management: Each strategy only gets allocated the amount of capital that is willing to be lost.
  • Shared success: All players earn a base income through UPI and the major share of income through a success payout.