Colonies is a smart contract protocol that allows an on-chain Organization to move tokens, such as fees from its business model, from one Layer to another in an automated way without having to move tokens manually creating a cross-layer business model.

EthereansOS Colonies use case

The best way to understand how the flow works is by watching how the EthereansOS on-chain Organization uses this protocol.

EthereansOS organization is on Ethereum Mainnet, but it has a cross-layer business model between L1 and L2 (Optimism). In fact, the FoF, the Routines Factory, and Farming Factory have also been deployed on Optimism, and the fees they generate there flow to the Treasury on L1 thanks to these Colonies' contract.

Using this documentation other projects could recreate the same structure, of course with some specific customizations due to their business logic.

Let’s see this use case in detail:

The EtherensOS Organization on Ethereum (L1) provides that the following fee-based Factories (more info here):

  • Farming Factory

  • Routines Factory

  • Factory-Of-Factories

send the fees earned to the Treasury Splitter (on L1) that is the contract that once every 3 months distributes ETHs to the various Components of the Organization such as Dividend Farming, Delegation Grants, Investment Manager etc..

EthereansOS also presents on Optimism (L2) the following fee-based Factories:

  • Farming Factory

  • Routines Factory

  • Factory-Of-Factories

these fees are also sent directly to the Treasury Splitter on Ethereum L1 i.e. where the Ethereans OS Organization is deployed.

Colonies allows this automized token transition between different Layers such as Optimism/Ethereum in this case.

In this way it is possible to have the Organization on one Layer with its services, such as Ethereum L1, and to offer those services on other Layers as well, Optimism for example, without having to redeploy the Organization there as well but being able to trace all fees/tokens back to the main Organization creating a multi-layer business model.

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