Profit Redistribution

Demonstrating Net Profit

If 8fold has:

  • debt, or

  • a cash reserve less than three times its average monthly expenses

net profit is not demonstrated.

If a net profit cannot be demonstrated, the decay rate does not apply. Just because 8fold is in debt in some way should not impact members who contribute their time, energy, and income to support 8fold and its mission. Further, because 8fold's expenses might change dramatically choosing a static reserve amount is untenible. Finally, if 8fold is in the red, it is the definition of not having a profit.

This dynamic is meant to motivate members to create, look for, and offer ways to keep operating expensis low. Further, to create incentive to work together to help each other raise more revenue individually to contribute to the greater pot.

Calculating the Profit Pool

If all of the above are in place and 8fold can consider executing a distribution 8fold takes the balance beyond the reserve, deducts the estimated expenses for the following quarter, and what remains is the profit pool from which to complete the distribution. For example, Quarter 1 to Quarter 2:

  1. Balance: $10,000

  2. Debt: $0

  3. Reserve: $3,000

  4. Estimate Q2 expenses: $3,000

  5. Profit pool: $4,000

Redistribution Schedule

Every quarter, 8fold performs a financial review. If a net profit is demonstrated, a redistribution occurs to 8fold members based on Fold level.

Scenarios and Equations

Scenario One

Who's ready for some math!

Let's say 8fold generates a net profit of $10,000. There are four members:

  1. John is Quarter.

  2. Suzy is Full.

  3. Jose is Double.

  4. Gita is Oct.

We calculate the value of a Full Fold reimbursement by calculating the Fold levels represented, dividing the net profit by that total:

  • Quarter: 0.25

  • Full: 1

  • Double: 2

  • Oct: 8

  • Total: 11.25

$888 is what a Full Fold member receives ($10,000/11.25 - rounding down to the nearest dollar).

This means that for our example list of members, we would have a redistribution of the following.

Member

Level

Multiplier

Reimbursement amount

John

Quarter

0.25

$222

Suzy

Full

1

$888

Jose

Double

2

$1776

Gita

Oct

8

$7104

Note: This results in $10 being unclaimed from the profit pool, which is rolled into the next reimbursement cycle.

Scenario Two

Let's say you earn 20,000 Folds in one month, making you an Oct Fold. I earn 2,400 in the same month, making me a Full Fold. Let's then say that 8fold has the entire monetary equivalent in the profit pool: $22,400.

  • Me: Full: 1

  • You: Oct: 8

  • Total: 9

$22,400/9 = $2,488 for Full Fold.

I receive $2,488. You receive $19,904 ($2488 * 8). Thereby demonstrating it is possible to receive a higher redistribution than intial contributed. However, it most likely won't be a lot depending on the scales we're talking about.