Introducing Umia - The Next Step of Onchain Organisations

Ethereum has proven itself to be an unstoppable technology capable of projects only possible on its smart contract blockchain. Despite this, an ecosystem can only be as strong as the organisations that are grown and nurtured within it, and so far these have always been fundamentally flawed.

The current landscape of Onchain Organisations is rife with limitations that limit the scale of projects and their underlying tokens. Current tokenholders have nebulous rights compared to those of the core team, and even when these rights are clearly defined the process is unnecessarily bureaucratic, leading to lagging correlations between the token growth and governance. This, combined with the cumbersome nature of setting up and funding a project on chain, has led to a complete loss of trust for many onchain projects, with many fleeing to fintech structures to mitigate these limitations.

Rather than reverting to traditional structures, we believe that it is possible to build a form of project that draws from the inherent strengths of the Ethereum ecosystem, based on neutrality, maximal transparency and sourcing the most capable talent with its open nature. Today, we introduce organisations that not only live but thrive in the world of Ethereum through Umia orgs.

Umia orgs address many of the core challenges we are currently facing, from trust assumptions to decision-making process design. As the innovations being pushed are manyfold, we want to briefly walk through some of the major changes we are bringing to the table with ventures and decision-market governance.

Voting by Conviction with Decision Markets

As we have seen multiple times in the past, traditional token-based voting has run past its usefulness and shown its unfitness to run projects at scale. Simple vote signalling has led to an ever-increasing asymmetry between the motivation of tokenholders, the core development team, and the overall long-term health of the project that comes from these cases.

In essence, most of the problems with current token voting tend to boil down to two core issues: incentives and signalling. When voting on a proposal, the tokenholder (or delegate) has no direct benefit on either participating on the vote nor voting on the option that they personally believe is the most beneficial to the token. This, in turn leads to voter burnout and weak signalling between the outcome of proposals and the welfare of the project.

Based on these learnings, Umia orgs are powered by decision markets. Whenever a decision is made, the token splits into different conditional states, and market participants are able to estimate the price impact of each path, until the most favorable outcome settles based on market pricing.

By driving governance through decision markets, a long-term welfare-building cycle is generated. Not only do predictors who accurately price outcomes get to generate profit from participating in governance, but project teams can see in real time the predicted impact of each outcome manifesting. Thanks to this system, the wisdom of crowds that inherently powers decentralized governance can be assessed in real time, while participants stay aligned to provide their most insightful knowledge.

Example of a Decision Market on Umia, with different conditions diverging on the underlying token

An On-chain Treasury with a Clear Framework

Decision markets bring a new dimension to the decision-making process of an organisation, but this is only as useful as long as the token holds a true degree of control in steering the protocol. Trustlessness is a core principle of Ethereum, and we believe that the ventures of the future should inherit this property.

Unlike previous organisations where Foundations, Labs, and DAOs have a strange delineation of duties, every Umia org created must enter into a formal operating agreement to a smart contract onchain for executing key actions. Whether it be token issuance or the complete dissolution of the project, these decisions can only be executed if a decision market is opened for the respective token.

On the framework side, we have collaborated with MetaLEX to ensure that ventures deployed with Umia follow the model of BORGs. Thanks to this structure, we ensure that a project's token holds true utility and remains a pivotal part of the protocol.

The Future of Onchain Coordination is Now

If you are an onchain native project looking to give control to your community and token holders, Umia orgs are introducing innovations that were not possible until now. Be it the TGE, legal setup, or onchain governance and treasury, Umia wishes to provide the complete package in a single product. The first such example will come from Umia itself, as it will lead a decision-market-first organisation to determine the growth of the protocol and its ecosystem.

We believe that the future of onchain coordination is extremely important, and this is why we are focusing our efforts on launching ventures. Whether you are a seasoned participant of prediction markets or wish to experiment with the next iteration of governance, this is your chance to be part of it and help shape the future of Ethereum!