On-Chain Organizations (OCOs) follow a very limited set of requirements, which essentially boils down to putting an organization’s assets and transactions on-chain. Although OCOs will fill many societal functions (social, charitable, educational, religious) early developments in the category will generally revolve around companies because the killer features are particularly helpful for capitalistic entities.
Companies on-chain have an emerging set of organization patterns including1:
Guilds - teams with particular talents (developers, gaming, legal, marketing) that incentivize contributors to provide their specific talents
Investment Funds - closely resemble traditional asset management
Special Purpose Acquisitions - raise money for a specific purchase
Collectors - groups that collect multiple assets, usually of a shared type
Protocols - teams building web3 protocols
Grant-makers - community allocated funding
Companies on-chain run similarly to traditional companies: they’ll need to hire talent, build new initiatives, conduct business development, market their products, fire underperformers, etc. The main difference is that the treasury is entirely on-chain and the “operating agreement” is the code of the smart contract itself. The treasury contract defines the terms of operation, payments, salaries, liquidation.
At the formation of an OCO, the treasury contract will define the assets and ownership. Everything else will be approved by the treasury, which is controlled by tokenholders. For example, one of the first things an OCO will approve will be compensation plans for employees. This will dictate the allocation/creation of tokens, the flow of assets, and the terms of payments.
This list is not exhaustive