## The problem

Early full members of The Reef are putting in months, or even years, of work more than the latecomers; deal with more uncertainty; and need to front some money to finance the option for the site. This entitles them to some kind of reward.

## How Brutopia did it: supplements on the Casco price

In Brutopia, they chose as a reward a discount on the apartments. If p was the indicative price per m2r in Brutopia:

- Full members that signed the compromis (and fronted the advance for the site) paid p per m2 on their unit (Casco)
- Full members that joined after the compromis, but before the permit was granted, paid p + 2%
- Full members that joined after the permit was granted paid p + 4%.

On top of that, Brutopia added another 2% for full members that had not put in 400 hours of work.

Notice that, if p is the average cost of construction Casco, this formula means that there will be some extra money in the societĂ© simple. I guess Brutopia used it as a buffer against unforeseen expenses.

## Another way: loans to the sociĂ©tĂ© simple

Another way to do it is to treat the fronting of money for the Reef as a loan to the sociĂ©tĂ© simple. It could work like this: we set a fair (net of inflation) interest rate. Imagine we decide that this rate is 4%, and we predict inflation to also be 4%. Imagine Alice, a well-off Reefling, contributes 100,000 EUR to paying for the option on the site, and that it then takes one year for the deed to be signed by the group, which at that point will be complete. At the end of this year, when everyone pays the full amount for the site, Alice receives a discount of 108,000 on her part: thatâ€™s the 100K she put in, plus 4% of that to compensate against inflation, plus another 4% to reward the risk she took. These 8K are a discount for Alice, but a cost to the whole group. They becomes their own line in the final budget and are carried by the whole group.

By comparison, Casco prices could be in the range 3,300 EUR per m2. Consider now another Reefling, Bob, also well-off enought to buy a 100 m2 apartment. Bob joined after the permit had been granted, so he needs to pay 4% more than Alice. This would be 0.04 x 3,300 x 100 = 13,200 EUR more than Alice. These 13,200 stay in the budget as a contingency fund; they mean that Bobâ€™s money will be used to compensate unforeseen expenses.

Any thoughts, @reef-finance