Colony: A platform for open organizations

That this wasn't brought up during the naming process paints a pretty clear picture of the team's demographic makeup.

Edit: Yep. https://blog.colony.io/colony-q3-update-9daa57d0918c

The whitepaper outlines the system of Domains, which seem to be the same as your 'circles' as you describe them. You can read a TL;DR here, which also has a link to the full whitepaper: https://colony.readme.io/v1.0/docs/off-whitepaper

I think there may well be 'off grid' (or in Colony's case 'off-chain') challenges to running an organization exclusively with Colony.

> We know from digital sociology that these reputational systems create their own hierarchies and imbalances in the system and I am wondering if Colony can prevent these in any way.

One thing that comes to mind as a response is Colony's reputation system mechanics: Reputation decays over time. So, to help disincentivise a 'reputation aristocracy' within an organization, reputations scores will halve over the course of about 3 months, which means no-one can just rest on their laurels and hold influence in a colony without regularly contributing to that colony's goals.

As others have commented, the other main distinction would be that a colony can put bounties up in native tokens, which confers influence in some types of voting (other types can be exclusively reputation-weighted), as well as dividends from the colony's revenue. Each colony can tweak their token's total supply, issuance rate and initial distribution to achieve the desired incentive model for what they need/desire.

Hypothetical 1: You and a growing team of incredibly engaged Colony members build out a $10M/yr revenue stream. Edge case leaks 87% of tokens to a dedicated hacker. Sorry?

Hypothetical 2: I like/hate your successful Colony. So I locate and bribe/extort your main influencer/s to push your project into the ground (block work, object to everything, whatever) or in my preferred direction. Code is law. Obey?

There are so many other fun problems with code-as-immutable-law for human institutions, it's concerning that none of these are even remotely addressed in the Colony literature (not to mention that the full, binding, self-regulating dispute mechanism fails horribly in both the above scenarios).

Counteracting the tyrannical nature of modern company governance is a very good thing. If this takes off, I wonder how these non-centralized forms of governance might be able to be applied to traditional political governance! Any way you slice it it definitely beats out Chinese style dictatorship, and I'd be willing to bet it'd be a good improvement on even US republic-style governance!