So we have the right investment approach and investment process. This will lead to companies that generate operating profits and companies that generate capital gains profit through acquisition or the sale of shares. There has to be a mechanism for shareholders to distribute these profits in a fair and transparent manner.

This is where the concept of a Profit IOU comes in. The Newton token is a non transferable profit IOU issued to shareholders by Social Kapital contracts as a Proof of Vote (POV). Only Social Kapital contracts can issue and redeem Newton tokens.

Shareholders do work by voting on community matters and investment proposals. Each type of work is assigned a newton value. Voting on community matters have a newton value of 1 and investments have a newton value of 2. Let’s assume a shareholder has 10,000 Florin (FLO) at the block number at which voting began and the shareholder takes part in a vote for an investment proposal. Social Kapital contracts calculate the newtons earned for this work as follows.

Proof of Vote (POV) = (10,000 x 2)/100 = 200 Newtons

POV is not the only way of getting newtons, but it is the major way and the basis for calculating the amount of newtons allocated to other newton earning activities by shareholders.

The following figures are not hard coded in any genesis contract and hence subject to change by shareholders. During each profit distribution event, 55% of the profit pool is allocated to POV, 25% is allocated to community reputation point holders, Support & Oversight groups get 12%, idea advocates get 6% and community workers/leaders get 2%.

Sirus Knight is the Co-Founder of Social Kapital