Djed Alliance
Search
K
🧡

What does it mean to be Non-Rent-Seeking?

Traditionally, organizations have been classified as either for-profit or not-for-profit. But this classification is too coarse.
Objections and negative sentiments against profit are usually not really against profit itself, but against being purely and greedily profit-driven and about engaging in rent-seeking behaviors, which lead to the accumulation of wealth without the creation of new wealth.
The expectation of proper profit is justifiable and necessary for any risky endeavor to make economic sense. For instance, if a project has only a 10% chance of success, it only makes sense to invest one's resources on it if the revenue in case of success is at least 10 times the value of the spent resources.
The Djed Alliance is mission-driven. It is not profit-driven, but its activities can be profit-seeking. However, the Djed Alliance is not-rent-seeking. Its activities do not aim to generate revenue beyond what would be considered fair profit for the undertaken risk and into what would be considered economic rent.
This is particularly important in the case of autonomous protocols. Since autonomous protocols can run by themselves on a blockchain, it is not justifiable to have a perpetual protocol-level fee going to any entity, because such a fee would be a form of economic rent imposed by this entity, since this entity is not needed for the operation of the protocol and in fact is not creating any new wealth in relation to the operation of the protocol. However, a temporary protocol-level fee that eventually becomes zero, to recover the risk-adjusted development costs of the protocol is an acceptable form of profit.