Capital & Allocation Circles

Capital and allocation circles organize contribution tracking within the ƒxyz Network. They are holacracy circles of type investment (referencing their metadata category), meaning they inherit the full governance framework -- roles, policies, financial tracking -- while specializing in capital management.

There are two kinds of capital allocation circles: the Genesis Contribution Circle (a singleton managed by the anchor) and Collective Capital Circles (user-created collectives).

Genesis Contribution Circle

The Genesis Contribution Circle is the network's anchor capital sub-circle. It tracks all founding contributions and manages the relationship between early contributions and token allocation.

Characteristics

How It Works

1. A contribution round is created with parameters: valuation, price per token, cap, vesting schedule, and optional tier-based pricing.
2. Allocations are submitted against the round. Each allocation records the contributor, USD contribution amount, token form (Florin, Joule, HoW, or mixed), and allocation type (founder, member, contributor, advisor, partner).
3. When an allocation is approved, the system automatically adds the member to the Genesis Contribution Circle. This is best-effort -- approval succeeds even if circle membership fails.
4. Tokens vest according to the allocation's schedule (see Voucher Lifecycle below).

Tier-Based Pricing

The founding contribution round supports differentiated pricing by membership tier. Higher-tier members who contribute earlier or more deeply enter at a lower fully-diluted valuation (FDV). The round stores a tierPricing map driven by three FDV tiers: FOUNDER at $30M FDV (commitments $250K+), NAVIGATOR at $50M FDV ($100K–$250K), and EXPLORER at $75M FDV ($50K–$100K, where the $50K minimum-allocation lock applies). The CES production function from the Token Ecosystem ensures that balanced participation across token types is rewarded over single-token concentration.

Retroactive Allocations

The founding contribution round can ingest historical contribution data. Retroactive allocations are parsed, aggregated by contributor, and batch-created with their original dates preserved. This allows pre-network contributions to be recognized within the formal vesting system.

Collective Capital Circles

Collective capital circles are user-created collectives that pool capital for specific allocation strategies or opportunities within the network. Any NAVIGATOR-tier (tier 3+) member can create one.

Structure

Each collective capital circle is a holacracy circle with:

• Circle type: investment
• Sub-type: collective
• Parent: Anchor Circle (all capital and allocation circles are children of the anchor)
• Governance: Full holacracy -- the circle lead manages capital allocation decisions through circle governance, including roles, policies, and financial tracking
• Members: Circle membership follows standard circle membership rules

How Collectives Work

Because collective capital circles are holacracy circles, they inherit the complete governance system:

• Roles: Circle leads, treasurers, analysts -- defined through governance meetings
• Policies: Contribution criteria, minimum commitments, exit terms -- encoded as circle policies
• Financial tracking: Circle-level expense and transaction tracking applies
• Proposals: Members can propose allocations, policy changes, or role modifications through the standard governance process

This means there is no separate "club management" system. The circle governance is the circle governance.

Creating a Capital Circle

A new collective capital circle is created as a circle with circleType: "investment" and investmentSubType: "collective". The creator becomes the initial Circle Lead. Additional roles (treasurer, secretary, etc.) are filled through governance.

Voucher Lifecycle

Vouchers are the mechanism through which token allocations become redeemable. Each voucher progresses through a defined lifecycle.

States

LOCKED --> VESTING --> REDEEMED

Vesting Mechanics

Vesting follows a cliff-then-linear model:

1. Lock period: An optional initial lock during which zero tokens are available.
2. Cliff period: After the lock expires, a cliff period begins. No tokens vest until the cliff passes. For example, a 6-month cliff means the first tokens become available only after 6 months.
3. Linear vesting: After the cliff, tokens vest linearly over the remaining vesting period. Each day, a proportional fraction of the total allocation becomes redeemable.
4. Full vesting: Once the total vesting period elapses, all allocated tokens are available for redemption.

The vested amount at any point is calculated as:

if days_since_start < cliff_days:
    vested = 0
elif days_since_start >= total_vest_days:
    vested = total_allocation
else:
    post_cliff_days = days_since_start - cliff_days
    vesting_period = total_vest_days - cliff_days
    vested = total_allocation * (post_cliff_days / vesting_period)

Early Exit

Allocations vest per the schedule above (cliff-then-linear). There is no early-exit forfeiture penalty: vested tokens are redeemable, and unvested tokens simply remain unvested until the schedule releases them. Any future leaver terms would be defined as an explicit vesting clause rather than a proportional-exit penalty.

Anchor Circle Relationship

All capital and allocation circles -- both the Genesis Contribution Circle and user-created collective capital circles -- are children of the Anchor Circle. This means:

• The Anchor Circle sets overarching governance parameters that capital circles inherit
• Capital circle policies must not conflict with anchor-level policies
• The Anchor Circle can define domain-level constraints on capital allocation activities
• Circle Leads of capital circles participate in anchor governance as Circle Representatives

This hierarchical relationship ensures that capital allocation activities remain aligned with the network's overall governance framework. See Holacracy for details on the anchor-subcircle relationship.

Token Integration

Capital and allocation circles interact with the Token Ecosystem in several ways:

• Florin: The settlement form in which allocations are materialized — the allocation itself is a network position. Genesis pricing is denominated in USD per Florin.
• Joule and HoW: Allocations can be denominated in work tokens (Joule) or knowledge tokens (HoW) for non-capital contributions.
• Mixed allocations: A single allocation can span multiple token types.
• ƒxyz synthesis: Contributions feed into the CES governance score. All three tokens have equal default weights (1.0x), governance-adjustable. The CES production function rewards balanced contributors with a diversity bonus.

References

• Token Ecosystem -- Token types, CES synthesis, tier thresholds
• Holacracy -- Governance framework, circle structure, roles
• Holacracy Extensions -- Circle type categorization, financial tracking
• DAO Integration -- Hybrid governance model