Reclaiming Control

On September 24, 1660, King Kiscutanewh of the Yeopim tribe sold European settler Nathaniel Batts all the land southwest of the Pasquotank River in present-day North Carolina. Another European settler stood as witness to the land transfer. This transaction was recorded in a deed book in Chesapeake, Virginia. This is the first known deed in the United States.

360+ years later, the process that named Batts a landowner has remained nearly identical. Even with the advent of the internet,

“…little has changed in the way we transact property. Multiple stakeholders, data sources, service providers, regulators and government agencies take their slice... as a transaction marches from list to close” – Stephen King, Founder of ImbrexIO

This observation about buying property can be applied to nearly any real estate interaction. While Web1 and Web2 made great strides in digitizing existing real estate processes and creating a handful of exciting new business models, it has not fundamentally changed how real estate operates. The lack of innovation in real estate has not only led to an unpleasant rental and buying experience for most of us but also to seismic affordability and environmental issues.

Our sovereignty over our physical world is relegated to centralized parties, such as landlords, banks, and asset managers, who make the decisions about our surroundings for us. We have little say in how we live, what our community is like, and what our impact on the planet is.

Web3 may offer us an entirely new way of living in the real world, if we choose to pursue it.

A through-line of Web3 is reclaiming control:

• NFTs are ultimately about reclaiming ownership over our digital property.
• DAOs are ultimately about reclaiming our ability to make collective decisions.
• DeFi is ultimately about reclaiming control over our financial life.

This through-line of reclaiming control can continue to our physical world as well.

If we take the mindset of collective action and the tools of collective financing we are sharpening to almost purchase the United States Constitution or an NBA team and apply it to real estate, we could create a physical world that is owned, managed, and operated by us, the residents.

Web3 allows for online communities to reclaim sovereignty over the built world. Once that happens, the real fun begins.

Blockchain Comes Second

Since the advent of the blockchain, the same potential applications of this technology on real estate have been circulated:

1. Put the title on the blockchain to safely store, transfer and verify ownership of a real asset
2. Fractionalize real estate via tokens that can be more easily traded, sold, and liquidated

While these are both fantastic use cases for blockchain technology, neither of these applications directly relates to “reclaiming control” as we are seeing Web3 enable in creative and financial spheres.

Focusing on solely “putting real estate on the blockchain” is analogous to how users of Web1 focused on digitizing what they found familiar in the real world, like magazines and yellow pages, instead of realizing that the internet would enable new versions of content and contacts altogether.

In that vein, we shouldn’t focus solely on how blockchain could enhance existing processes and instead rethink real estate altogether. Vitalik Buterin writes about the potential applications of blockchain on the built world in his piece Crypto Cities,

“Using blockchains to implement new and experimental forms of ownership for land and other scarce assets, as well as new and experimental forms of democratic governance.”

While I agree with many of the ideas Vitalik puts forth in this piece, I do not believe we should start building our crypto cities by handing the tools of decentralization to centralized parties like local governments. It is hard to trust a state or city-run blockchain if there is no grassroots adoption of said blockchain first.

Grassroots adoption of the blockchain begins with everyday people being shown the tangible benefits of this technology via everyday transactions such as buying a coffee, paying rent, or buying a piece of art from a local artist. For these common transactions to occur on the blockchain, we need to have these pillars of our neighborhood running on Web3 rails.

We decentralize the built world not with just the blockchain but with decentralized apartment buildings, coffee shops, and galleries instead. We create our crypto city with the bricks that mean the most to us in reality: community.

Community Comes First

2021 was a banner year for Web3. We had celebrity adoption of NFTs, venture-backed DAOs, and all-time high crypto market caps. Web3 was pushed into the stratosphere by memetic movements like “GM”, “WAGMI”, “(X,X)” and PFP NFTs. For many, these movements served as the on-ramp to broader Web3 ideas like DAOs, DeFi, and cryptocurrency. While the technology was there, the community made it approachable. This is how the built world will be decentralized as well.

We experience the physical world in layers. Countries (United States) are distilled down to the cities that make it (New York City). Cities are distilled even further down to the neighborhoods that make it (Brooklyn). Neighborhoods are a collection of experiences such as culture, cuisine, and architecture that make it (Bed-Stuy). Behind these experiences are people. It is the human beings that live and visit these neighborhoods that make/enjoy the food, sell/wear the clothes, and spin/listen to the records. Where we decide to live, work and play is as much of a question of what we hope to experience as it is about the characters we interact with while we are there. Even before the decentralized built world has been created, its residents have already been gathering.

The real driver behind Web3 is the guilds, clans, and squads building inside. You may miss it because there is a jarring intertwining of genuine connection with financial speculation, memes, and hype. If you look deeper, you can see communities being built, not by racial lines but by pixelated ones.

DAOs like Friends With Benefits (FWB), Forefront, Syndicate, and Flamingo are gathering and operating closer to how a town would with its own governance, financial systems, and community events. Similarly, PFP communities like CryptoPunks, Bored Ape Yacht Club, and Solana Monkey Business are building out their own culture, norms, and language. These groups are starting to look like 3333, 5000, and 10,000 person villages.

These communities are largely thought of as groups that will make up the metaverse. These tribes will populate virtual worlds, play virtual games, and consume virtual content together. However, I believe that view is too limited. Behind each PFP and Discord handle is a human being who craves connection, companionship, and conversation. These online communities will build strong bonds in the virtual world and cement bonds in the physical one.

Take NFT NYC 2021 as an example. The week-long conference was considered a paradigm shift for many. Groups that have been forming over the internet were reveling in each other’s company…in real life. Pixels were meeting, sharing ideas, and showing their pride in being a part of their respective squad. This week showcased a fierce desire for in-person interaction.

We will eventually want to meet more often and for longer than a week. To do that, communities will need their own real spaces. Jon Hillis explains this well,

“When you think of cities, you think of... Paris and the Eiffel Tower... the skyscrapers of New York. But that's just the stage... it's not the place that matters, it's the density of creative ideas and interesting people... find your friends online and then meet up in person.

There are…1000x more people to choose from online, and they conveniently gather into easily identifiable tribes... But the physical world still matters. Once people connect, they need meatspace to come together, break bread, be present, and immerse themselves in the environment. Maybe someday there will be virtual realities with the same bandwidth as the real world, but for now, you can’t beat good old fashioned reality”.

Online communities will be the real bricks of a decentralized built world. Groups will slowly allocate more of their shared treasury to in-person interaction. It will begin with a week in Yosemite then move to two weeks on a ranch in South Carolina, and then a month in Lisbon. A month will become too short and these groups will need a permanent place to stay. Perhaps they settle down in in Brooklyn and create the first house in a Blockchain Village.

Blockchain Villages

Cohabitating with those who have similar interests, religions, or goals is not new. Even just in the last decade, an entire slate of co-living companies sought to bring like-minded people together under the same roof. The ones that focused on convenience and affordability survived the pandemic while those that worked hard to “curate a vibe” by screening tenants themselves and providing programming did not make it.

Due to how Web3 communities are forming, we will no longer need to rely on centralized parties to curate the tenant base. Online communities are building the key elements to a successful living arrangement like trust, communication, and comradery, before moving in together.

In addition, there could be joint financial ownership over these spaces. With DAO governance, tokenization, digital currency, and immutable ledgers, there is now a unique possibility that we collectively buy, manage and operate our built world by the rule of us, the residents.

Once that shift has been made, entirely new ways of living can exist:

Housing becomes more flexible, fungible and part of a network

If enough houses are owned and managed with Web3 mechanics, we could feasibly live anywhere, with far less friction than today. Imagine a network of homes that allowed you to swap your ownership in one home with another home in a different neighborhood, city, or country for a week, month, or year in a fluid manner. Squads or individuals could move to different houses, share houses, and upgrade these houses as they saw fit.

Your physical user experience is decided by your squad, not a landlord

Residents can decide on a variety of things that they could not before such as:

• Amenities: Pool on the roof? Dry cleaning service every Sunday?
• Services: Do we use the 3-star or 5-star plumber on Yelp? The yoga instructor who studied in the jungle or the one who studied down the street?
• House Rules: Dogs of all sizes? No noise on Tuesdays because that’s when we code? Mandatory GM and GN at the start and end of the day?
• Operations: Do we use metal keys or an NFT to access our buildings? Do we compost?
• Design: Do we want the L-shaped couch in the living room? Do we want to buy a piece by Fewocious or commission an up-and-coming artist?
• Innovation: The issues of sustainability and affordability outlined at the beginning of this piece could be addressed if the residents choose to do so. While every house may not choose to pay extra for the more energy-efficient light bulbs or allocate a unit in their building for affordable housing, decentralized real estate makes it an option we did not have before. Enough small decisions at scale are how most big change happens.

New Processes Can Remove Every Day Friction

Those living in this decentralized village may no longer need to:

• Worry about breaking a lease because it may do away with the concept of the lease altogether and replace it with a smart contract.
• Fill out rental “applications” because your living history is on-chain.
• Use security deposits because if you are a bad actor, your ownership stake in the housing network is reduced or erased completely. If you still use a security deposit, you can have an instant transfer of funds on both sides of the deposit’s lifecycle.
• So. Much. More.

Own the Third Space

Decentralizing the built world doesn’t have to end with housing. We can extend the boundaries of our borderless neighborhood with the third places we already cherish. We can purchase and operate our coffee shops, bars, and art galleries in this manner as well.

Perhaps we then incentivize the residents of the houses in the network to become patrons of the third spaces in the network… now, that’s starting to look like a real Blockchain Village!

Communities Will Decentralize the Built World

The rate at which we are testing the limits of collective ownership and shared liquidity pools in tandem with the fierce desire for in-person interaction gives me confidence that Web3 can meaningfully impact the built world sooner than we think. We are already seeing hard asset initiatives like CityDAO looking to build an entire city on-chain and Creator Cabins creating a short-to-medium-term rental network for Web3 builders.

Whichever way you slice it, decentralizing the built world will happen in layers. We will likely begin with an asset, then move to a series of assets (houses, coffee shops, bars etc.) that work in concert with one another, and then ultimately, an entire city operating on the blockchain.

As we approach this scale, we can bring non-crypto natives under our roof. This village could expand its boundaries until it becomes a city made of wood, brick, steel, and blockchain. At the core of all of these advancements is online communities.

For this world to exist, online communities will need to wish it into existence. DAOs, PFPs, and other groups will have to want to reclaim sovereignty over their physical surroundings the same way they wish it over the internet. While we are building a better internet, let’s rework the real world as well.

If you want to decentralize the built world with me, please reach out on Twitter @s_afiaziz.