The Colony Network is an Ethereum-based protocol for creating and operating Internet Organizations. In a traditional organization, rules are defined in policy documents and enforced by a management hierarchy; in an Internet Organization, rules are defined in code and enforced by a blockchain mining process.
CLNY holders have two primary roles. The first is to participate in the reputation mining process. The second is management of the Colony Network itself. There will be permissioned functions on the Network Contract to allow fundamental parameters of the network to be set, which can only be called by the Metacolony. For these permissioned functions to be called by the Metacolony, a vote open to all CLNY and reputation holders must be conducted.
Management of the Colony Network also includes making updates to Colony contracts available to colonies. CLNY holders are not necessarily responsible for the development of these updates, but are required to vote to deploy them. They are therefore responsible for at least ensuring due diligence is done, either by themselves or by service providers, to avoid introducing security weaknesses or other undesirable behaviour. In return for the responsibility of the development and maintenance of the Colony Network, the Metacolony is the beneficiary of the network fee.
Reputation in the Metacolony can be acquired by earning CLNY tokens by via expenditure payouts just as in any other colony . Reputation in the Metacolony can also be earned by participating in the reputation mining process , which is unique to the Metacolony
