What is the Cardano Member Based Organisation (MBO)?

Since Charles did the video about the Cardano roadmap and Governance 4 months ago, we can hear more and more short format channel mentions about “members-based organization” (MBO) in Cardano Community but rarely see long format discussions about it, so why not start some?

In this context, also thanks to @Michael.Liesenfelt who has already started a topic yesterday with some concrete suggestions under CIP - Cardano Professional Society. In this post, I’d like to take one step back and start the discussion much more fundamentally. (also to pick up people who may not have thought about it at all until now)

So if you ever hear people talking about Cardano MBO, they talk about the future of Cardano: it’s about governance, it’s about who pays and who decides, it’s about parameter changes, treasury management, sustainability, structure and committees and how we want to handle Genesis keys

On a high-level view, a MBO is created with:

  • some bylaws/constitution. It defines all kinds of procedures and rules for holding elections, organizing meetings, how the board should work, quorum requirements, goals and strategies.
  • the actual “members” in most concepts there are different tiers with which you can buy in. This can start very cheap like 49.- USD per year, up to million fees. Normally, people who pay more also buy more say. (but here there are also different concepts)
  • not seldom the highest tier get direct seats on the board and smaller tiers can vote on one or more seats. In order to avoid that people/companies simply buy in and then deciding on their own about the future, the board must act in the “spirit” of the constitution, and any change to the constitution can only be handled by a vote of all members. (every vote is of equal value in this case)
  • different overseeing and executive committees/experts

Another exciting thing about Cardano MBO will be how to bring together on-chain and off-chain governance.

I would like to know if you have heard this concept before and if you have an opinion on it, and what is important to people within the Cardano community. What do you think such committees would look like?


similar structures and cases remind me the “state / cities” in ancient Greece,
where we find smaller and smaller societies, which are independent from each other and developed based on ideas and processes internally.

I love the idea, only few countries (which are “strong” now a days) operate like that.
as risky it is, yes it can bring amazing results.
so happy to see our Cardano move to this direction.


hmm, ancient Greece governance was only open for some very view & wealthy and free people and excluded most parts of its population from governance processes…


MBOs have a track record in Open Source culture. First I would look at existing examples of MBO such as OSI which is a California public benefit corporation.

Fundamental questions would include -

  1. How can a MBO based on Open Source non-profit models be reconciled with serving the operations of a private company such as IOG ? Should’nt IOG become non-profit first ?

  2. How is the MBO related to decentralization ? Surely a top-down organization with a definition of “skin in the game” as plutocratic will simply reproduce and entrench itself ? According to the June Roadmap presentation these plutocratic steering committes would decide the roadmap (Roadmap and Governance - Ekphrasis).

I am not excited about the prospect of a constitution defined and dominated by plutocrats. Capability does not follow the money - quite the opposite.

The committee as the definition stands would look like any other “pay or work” economic structure.
“Pay or work” is no different in kind from existing shareholder models. For example, shareholders pay for power and workers work for pay. Where is the economic innovation ? What is the difference ?

There are many fundamentals being glossed over here. (This phenomenon has been identified in the academic literature on blockchain as “semantic shift”) .Not least the impact of plutocratic voting and thinking on Blockchain governance. A good place to start would be to look at IOG’s own paper which references sustainable development and participation.

Not even a nod to Liquid Democracy ? Does Cardano just see this kind of Blockchain research as tools or products to be marketed and not applied to themselves ? Not much skin in the game there ?

There are ways to mitigate the plutocratic direction such as imposing thresholds on voting (see The role of Delegated Representation in Blockchain Governance)


Thanks for putting this summary together. I guess the dynamics will depend on the details of the constitution and decision-making process

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agree. that is the human part of this old system.

but as a structure is similar, to what today is developed and build it.
I see how good organized is germany, with regions and each one has its own independence with sub-organized teams / institutes.
the example of the ancient greek was only for the city state organized system.

now and the future is…
an Idea / Vision,
behind it, there is self-organized communities for different reasons / and goals,
technical teams, development, sales and so,
with each one to run their own culture and community.
for me, it sounds so healthy and futuristic.


Feel free to take a look at my stuff


Thank you @Official_Jornlr. I think people who have been very active in Catalyst are particularly well suited to drive an MBO forward.


A bit familiar and a bit new to the concept.

I think MBO’s would be well suited for more local treasuries and solve some of the complexities we see already in Catalyst where it is impossible to read all the proposals without using days for this.

I think they should have mechanisms to be organic, a member might have some particular expertise in a subject qualifying her or him to a more leadership role in a particular case, or the whole MBO might join up with another MBO’ on some larger goal or purpose.

They should generate some form of reputation to allow trust to be gained. How should perhaps be up to the individual MBO and there could also be collaboration between MBO’s on this to share reputation history. The tricky part here is not to make as system that can outcast someone from wrongdoings of the past. Maybe reputation can decay over time the less active you are and also allow you a chance to clear your history if so needed? (Or join another MBO with another reputation system)


Multiple MBO’s versus multiple divisions within one MBO is a good debate.

I proposed a Voltaire/MBO concept with 6 different divisions, 6 different purposes, 6 different main accounts/treasuries, and potentially 6 different leader/member selection criteria (not all plutocratic!) for distributed diversified capabilities in decentralized governance. Each division can have as many sub-committees, sub-accounts, sub-projects, sub-conferences, sub-efforts, … As determined by the division members.

CIP - Cardano Members Based Organization

I haven’t considered quantifiable reputation systems yet. How do you think that should be implemented? On L1 chain votes of confidence or no-confidence between members?


MBOs can operate well using a DAO organizational structure.

Transparent governance of company funds is a competitive advantage for a lot of enterprise use cases. There are a few infrastructure protocols building MBO infrastructure in the Cardano ecosystem.

This community should look into Agora. GitHub - Liqwid-Labs/agora: Governance modules for Cardano protocols With agora you can set governance thresholds enforced by smart contracts on chain. Examples: Set proposal approval threshold. Set minimum amount of GT you need to hold to create a proposal. Set a threshold for cosigning in order to move the proposal from draft to voting phase.

My team (Our Team) is building an extension of Agora to bring a front end to it and make it a non technical experience to create and participate in on chain governance. We also have some temperature check mostly off chain tooling you can see using our governance app.

MBOs will be a great addition to the Cardano ecosystem.


I think you can argue there is a place for both. Sub topics could have internal mbo’s (so lets say for example a nordic MBO and with a sub Norwegian, Swedish, Denmark, Finland and Island etc). And when it comes to topics I think its natural to build expertise in a organisation so yes could be one for the SPO’s and another MBO for the governance and such. I do not think this will make or break the success for MBO’s but can make them more efficient if we give this some consideration.

Yeah, I saw it and I like the approach. Certainly better than a lot that just critiques without giving a proposal themselves.

For starters I think we should look at some of the great scientific work that has been done on this subject. One example is the work by Dr. Mihaela Ulieru.
In particular, I would point out the work by Zeinab Noorian and her back in 2010, where they made a framework for comparison of reputation systems. That could be a useful starting point for discussions. See: https://www.theimpactinstitute.org/Publications/Final-noorian_ulieru_pN.pdf


I agree and I’m sure there is a role for Catalyst and the participants in the MBO. Catalyst can be difficult to understand sometimes. As they say, “things may disorient, overload, and inspire.”

I believe IOG is expecting Catalyst to mature a little more. Their response to this letter seems to indicate a synergistic relationship going forward between IOG, CF, and Catalyst.

I think it’s important to point out that this letter was not from “The Catalyst Community”, not in solidarity as indicated.

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Alright, well I applied. I would like to see that for myself. I have seen 4-5 Funds now of people just complaining about incompetency. People repeating the same thing and nothing getting done. I hope that things will change and that I can be a part of that change. If this is going to be used: CIPs/README.md at voltaire-v1 · JaredCorduan/CIPs · GitHub

as the voting mechanism for this members based organization. I encourage you to adopt more legal procedure so that people aren’t just throwing up governance actions and lynching people based on mob rule. Specifically trial procedure. I sent an email to Mr. Corduan about creating at least a basic trial procedure to go along with this voting mechanism. Ideally, I would like more pre-trial procedure stuff to be implemented and post trial as shown by my work creating a legal framework for a charge but that will be on you guys if you do not heed my warnings as many have done the entire time I have been here.

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Kinda like the current power behind votes. Please clarify if this is not what you were intending to project.

Neat article by LiberLion (unable to find you on the forum) that summarizes the main points of CIP-1694: A CIP for a Decentralized Governance Mechanism for the Voltaire Era | AdaPulse

Convenience link to CIP-1694: CIPs/README.md at voltaire-v1 · JaredCorduan/CIPs · GitHub