Individual contributions to ventures within the open value network (OVN) are transferred into fluid equity using a benefit redistribution algorithm.

The term fluid equity is the conceptual/economic term, wich must be distinguished from contribution-derived participation or fluid participation rights

Fluid equity, as a conceptual/economic term, is a continuously computed record of contribution-based participation in an open organization. It is not an investment contract because it represents a continuously recalculated participation relationship arising from the contributor's own contributions and continuing participation in an open production system, rather than a passive investment of capital in a common enterprise from which the contributor expects profits generated principally through the managerial efforts of an issuer or promoter.

Contributions are NOT considered as "investment", since the contributor is part of the open venture, with access to governance also provided as a benefit to contributors. Contributions can be of different types: time, financial, material (equipment, tools, consumables, space), social capital, etc.. Therefore, fluid equity is not to be considered a security, in the traditional legal sense.

The fluid equity distribution for a particular venture is presented as a piechart. We call this form of equity "fluid" because within the context of one venture everyone's equity is continuously diluted as other affiliates contribute to the venture.

Moreover, an OVN is totally transparent and open (or permissionless). There is no secrecy and there is no walled activity that a contributor doesn't have access to. Even if an agent only contributes financially to a venture, since there is no hierarchy between different types of contributions, this agent is considered a contributor, therefore an insider, like any other contributor, with the ability to influence the course of the venture.

Legal issues

fluid equity or security

The classic formulation in Canada asks whether there is essentially:

an investment of money;
in a common enterprise;
with an expectation of profit;
derived from the efforts of others.

That creates an obvious problem for OVN fluid equity. Imagine: Alice contributes $10,000 to Venture X and receives fluid equity representing 10% of the venture. That looks suspiciously like an investment. But now change the facts: Alice contributes 500 hours of engineering work, 100 hours of administrative work and $1,000 of materials. The OVN accounting system records those contributions and calculates her current participation share. Now the "investment of money" analysis becomes considerably less natural. And if Alice is actually participating in the venture, influencing decisions, accessing information, producing things, and contributing resources, the "efforts of others" component becomes much weaker. This is where the OVN model has an interesting legal argument. So financial contributors must be asked to contribute also with time and to engage in governance activities.

Argument #1 — The contributor isn't merely an investor

This is probably the most important point. Traditional securities law is designed around a distinction between: Capital provider and Entrepreneurial/managerial operator. The classic securities situation is: Investor -> money -> Enterprise -> entrepreneurial efforts -> profit -> Investor. The investor is passive. An OVN is intended to operate more like: Contributor -> resources / labor / knowledge / relationships -> participation -> production -> venture -> benefits

The contributor is not necessarily entrusting money to somebody else. They are participating in production. This is an important distinction. The Canadian Supreme Court's Pacific Coast Coin decision itself recognized that not every network of commercial contracts should automatically be treated as investment contracts.

Argument #2 — The "investment" is actually contribution

This is where the OVN contribution-accounting philosophy becomes legally useful. Suppose I contribute:

100 hours of engineering;
a 3D printer;
$500;
laboratory space;
intellectual contributions;
network connections.

The OVN doesn't necessarily say: "You invested $X." It says: "You contributed resources of various kinds to the production process." The resulting participation share is therefore an accounting representation of the contributor's relationship to the venture. That is conceptually much closer to: partnership accounting, cooperative patronage, member contribution, joint production, profit-sharing arrangements, than to a conventional securities offering. But this is not automatically decisive. Securities legislation is deliberately broad.

Argument #3 — The contribution does not purchase a promised return

This is critical. Suppose the OVN says: "Contribute $1,000 today and you will receive $1,500 next year." That is extremely problematic. But suppose it says: "Your contribution is recorded. Your participation share is calculated according to the contribution-accounting rules. The venture may or may not generate future benefits." That is substantially different. There is no promise of return. The contributor is exposed to the actual economic performance of the venture. And crucially: the contribution itself does not generate the return. The return, if any, comes from future production and future collective activity.

Argument #4 — The contributor supplies the "efforts"

This is potentially the strongest distinction from Howey. Imagine:

Investor → capital → promoter
                       ↓
                 managerial effort
                       ↓
                    profits

versus:

Contributor
   ├── capital
   ├── labor
   ├── knowledge
   ├── equipment
   ├── relationships
   └── governance participation
             ↓
          venture
             ↓
          benefits

The second system does not fit comfortably into the classic passive-investor model. Indeed, the contributor's own future contributions can affect their participation share. That is why the word fluid matters. The position is not simply an instrument purchased at time t₀. It is continuously recomputed based on participation.

Argument #5 — Dilution is contribution-based, not capital-market dilution

This is a subtle but important distinction. In a conventional company: Lynn owns 10%. Then the company issues more shares: Lynn is diluted to 5%.

In an OVN: Lynn's contribution record represents 10% of the contribution base. Bob contributes additional validated resources. Lynn becomes 8%. This is not necessarily an issuer creating securities to raise additional capital. It is an accounting consequence of new production contributions. The denominator changes because the productive system receives additional contributions. That gives fluid equity a very different economic ontology.

Argument #6 — There is no passive secondary market

This becomes extremely important. If we allow the possibility to people to sell accumulated fluid equity before a venture generates revenue, from a securities-law perspective, this becomes a major danger zone, because secondary-market transferability makes the instrument much more resemble an investment asset. The SEC's digital-asset guidance has historically identified transferability and the existence of a secondary trading market as factors relevant to whether purchasers have an expectation of profit. And the SEC's current 2026 interpretation continues to distinguish the underlying asset from transactions that can constitute investment contracts.

So: non-transferable contribution position

Contribution
     ↓
participation
     ↓
venture
     ↓
benefit

is legally much easier to defend, whereas tradable fluid equity

buy
 ↓
hold
 ↓
expect appreciation
 ↓
sell

looks much more like securities-market behavior.

Crowdfunding for equity

In some countries today, crowdfunding for equity is still illegal. Some people have raised the concern that ventures of an OVN may not be able to get micro-contributions in cash from people, because that would be considered crowdfunding for equity. But the law applies to companies that are closed organizations, which don't give access to internal processes to investors, but only some limited access to information. The OVN is an open organization, meaning that it provides free access to innovation and production processes, as well as to governance. The individual who contributes cash for a venture becomes an affiliate, or a member of a non-registered association if you will, has access to all the processes that make up the venture, and can influence all these processes.

Secondary markets

Some individuals have proposed to make OVN fluid equity transferable. In other words, to allow individuals to sell their accumulated fluid equity in ventures even before the venture generates revenue. This subject has been discussed at length within the Sensorica community.

Reasons in favor of it:

Individuals can get some currency for their past efforts, offloading some risk and use it for their immediate needs.

Reasons against it:

Creating a secondary market for OVN fluid equity might drive those who are close to ventures to inflate the potential of the venture, according to some exit strategy that they might have. Since OVN ventures are open, it would be much more difficult in the OVN context to inflate ventures than in the current economic context and markets.
The legal risk of conflating fluid equity with a security becomes considerably higher if fluid equity;; is made transferable, marketed as an appreciating investment, or sold to passive contributors.

Fluid equity

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