The IOTA Foundation is the first foundation whose capital consists entirely of a crypto-currency. Dominik Schiener, one of the founders, explains in an interview how to improve our digital age by harnessing features of a traditional German organisational form.
Dominik, a year ago, the IOTA Foundation was recognised by the Berlin Foundation Supervisory Authority as a foundation with legal capacity under civil law. Has everything gone as planned since then?
As with every start-up, almost nothing ever goes according to plan. Especially in a rapidly developing environment like Blockchain and DLT [distributed ledger technology]. It is almost impossible to predict what will happen and how the industry will develop. The most important problems regarding the organisation have been solved in the last months, which means that we employ nearly 90 people in more than 15 countries through the foundation to continue working on the protocol and forge partnerships with companies and NGOs.
As a start-up entrepreneur, it was of course completely new territory for us to act with a foundation – often in frustration at having to slow down our fast-moving activities due to various barriers. Over the last few months, we have learned a lot of new things so that we can achieve even more with the IOTA Foundation in the new year.
How do these things fit together – your far-reaching visions for advancing the science and research needed to further develop IOTA technology, and the traditional form of a legal foundation?
Like traditional foundations, the IOTA Foundation is geared to promoting the common good. The IOTA project is based on open-source technology that we want to develop as a standard to enable a machine economy. This goal can only be achieved if the technology reaches production-ready maturity and we have an open and barrier-free ecosystem where companies, start-ups, and developers create together, i.e. develop new innovations based on IOTA.
It was clear to us right from the start that we could only realise the vision of the IOTA project through a foundation. We are not a Silicon Valley start-up focused on maximising profit; we have a strong focus on maximising the impact of our technologies and the ecosystems we build and enable. To promote this ecosystem, we have, for example, established a gGmbH as a subsidiary of the foundation to distribute around 8 million euros in grants to start-ups and open-source developers.
You have also opted to take the form of a hybrid foundation, i.e. a form of foundation that consumes part of its assets. Was this the right decision?
Definitely. The IOTA Foundation is financed by the founders (David Sønstebø and me), but also by our community, which donated money in 2016 to establish it. In total, almost 5 percent of all IOTA tokens are donated, which was quite a substantial sum when it was set up (about 120 million euros).
The aim of the foundation is to develop the technology behind IOTA through a part of the donated capital and to build and promote an entire ecosystem so that sustainable innovations can be realised. It is precisely for this reason that the Hybrid Foundation is the ideal legal form for us.