The Colony Network is an Ethereum-based protocol for creating and operating Decentralized Autonomous Organizations (DAOs). ^[1][2]

Overview

Founded by Alex Rea, Colony is infrastructure for “open organizations”: self-organizing teams that run via software. It enables people to collaborate on a shared project without needing to trust or know one another. ^[3]

"Instead of being monitored and evaluated by someone higher up the hierarchy, any individual’s merit within a colony is calculated through systematic peer review of completed work, and represented numerically on the blockchain. This number, by virtue of being rooted in trustless consensus, entitles the individual to direct shared resources of the firm within the remit of their expertise." - the platform explains^[3]

Colony protocol's vision is a system by which people can coordinate complex and collaborative work, whereby contributions toward shared goals are justly rewarded, and through which an individual can maintain a level of agency not traditionally possible. ^[3]

Colony's podcast Collectively Intelligent is one where the team invites and interviews industry leaders about related topics such as DAOs, cross-chain messaging, etc. ^[5]

In April 2024, Colony announced its deployment across compatible chains starting with Arbitrum. ^[6]

CLNY

CLNY is the native token of the Metacolony. The Metacolony is the DAO responsible for the development, maintenance, and upkeep of the infrastructure. ^[4]

Utility

CLNY is used for governance staking in case of disputes in the Metacolony that require CLNY to be ‘staked’ as surety. Winning a dispute earns stakers a share of the loser’s CLNY. It is also used for revenue
sharing whereby accounts with both CLNY & Reputation in the Metacolony may be eligible to claim a share of Metacolony revenue. ^[4]

It is used in Reputation Mining where reputation updates are calculated off-chain by miners who stake CLNY to compete to perform them to earn CLNY and Reputation. Lastly, it is used in Fee Auctions where fees denominated in tokens other than USDT, USDC, XDAI, and WETH are auctioned for CLNY, which is burned. ^[4]

Tokenomics

Colony generates revenue through network fees. Fees paid in whitelisted tokens are directed to the Metacolony, supporting ongoing development, security, maintenance, support, and Colony's ecosystem incentive mechanism, BudgetBox. ^[4]

1. The Colony Network levies a fee on payments leaving a colony to an external address.
2. Fees paid in whitelisted tokens like USDC, USDT, WETH, or xDAI go to the Metacolony to incentivize contributors.
3. Fees paid in other ERC-20 tokens go to auctions where token buyers can purchase ERC-20 tokens using CLNY, which is burned.