On the 3rd of March the website was live, the NFTs ready and the contracts deployed. But nothing happened: we had cancelled the crowdfunding campaign for our crypto.coliving project. Here lies the post-mortem.

Vision

What was this dream about? Why did we want to make it happen?

Coliving > living

Humans are social creatures, and this post-covid world is ignoring it. Yes it’s amazing we can now work from anywhere. Unfortunately, most of us end up being very lonely working from our bedrooms when we know for a fact that we feel much better when being part of community.

Coliving spaces allow us to travel around the globe while living and connecting at a deeper level with people. How else can we grow in this world without creating new connections, discovering new places and being exposed to new ideas?

There is also something very elegant about sharing resources with others: appliances, common spaces, toilets and yoga mats. But most importantly, it’s about sharing time with others: making new friends and possibly lovers.

Crypto IRL

It’s quite simple: fuck the metaverse. Really. We don’t want any of that crap. Sitting physically in front of someone, touching someone: Zuckerberg might think there’s an alternative, but he’s wrong!

The crypto space desperately needs a non-circular use case. Something that’s not about farming dirt to speculate on more dirt. There was some hope with ConstitutionDAO (but useless) and CityDAO (but too far away). Although the best use case might still be the original one: A Peer-to-Peer Electronic Cash System.

Web3 builders need to interact in real life with a more diverse crowd. It's all fun and games to chat with other degens on Discord, but maybe it's time to grow up to fully grasp the impact of what we are creating and understand who we are creating it for.

Serendipity as a public good

The ROI (Return on Investment) of serendipity cannot be computed. It’s the main reason we go to conferences instead of staying comfortably at home and watching the talks online. We know empirically that opportunities will arise just by being there and going to parties: a HAPPY crowd is worth all the APY in the world.

Coliving is about serendipity. Making it a perfect public good. Even more so because:

1. Real-estate businesses are anyway ridden with rent-seeking middlemen who leave very small margins. No extraction possible if there’s no profits

2. Accommodation is a basic need after food, water and wifi

3. It’s the only way to get public-good-lover Vitalik to stay with us

We already have the tools ready in crypto-land to fund, operate and govern this public good:

• Raise funds with membership-as-NFTs

• Payments!

• Propose, vote and use the beloved square root function

Choices

It took many detours to arrive at a decision regarding the property, mechanism design and legal stuff. Here’s a summary with the benefits of hindsight.

The house

For the location we picked Granada, a mid-sized city in the south of Spain:

• Spain → the Spanish way of life is the best with their going-out culture

• South → sun is paramount

• Mid-sized → all the necessary amenities (and hipster coffee shops) but small enough to connect with the locals

Owners of good coliving spaces would tell us that there is a magic number for the amount of people living at the same time in the property: 15. Small enough to feel connected to everybody, but big enough to always have someone keen on a cheeky drink on the terrace. So we chose a house with ten bedrooms, which guaranteed capacity between 10 to 20 people.

One perk of sharing resources is that it’s economical to get something fancy. This was the aha moment for people when we showed them pictures of that luxurious patio. What’s the point of living if we cannot be surrounded by beauty? There’s absolutely nothing wrong with a public good being bougie!

The drop

We decided to raise funds by issuing NFTs: they would be randomly-generated azulejos (those tiles on the walls) inspired by the house. But static images are boring, so our artist made them interactive. Here’s a preview of what they would look like in a wallet:

Now let’s do some back-of-the-napkin calculations:

• Buying, renovating and opening the coliving would cost ~ 3m€

• Assuming people cannot stay for less than one week, the theoretical maximum of people per year would be ~ 1000

• So with the help of some advanced maths we first wanted to issue 1000 NFTs at 3000€ apiece for the right to book a stay in the future

But that would price a lot of people out… So in true crypto fashion we added a bit of randomness to make it fairer: 10000 NFTS at 300€ apiece with 1000 of them giving their owners the right to book a stay before others. Minters would get a 10% chance (advanced math, again) to get this “priority booking” trait.

People on a lower budget would still get a chance to book a stay, while people with a bigger budget could still buy 10 NFTs to increase their odds. Not perfect, but it’s fairness through randomness. Also some people might just have wanted to support the project or hold a NFT because it’s cool without the motivation to stay there in the future.

The drop would happen on Gnosis Chain. Three reasons for this choice:

1. Very low gas fees to transact (so low that they could be subsidized)

2. Native token being a stablecoin (1 DAI = $1) matching very well the non-speculative aspect of the project and the requirement to actually buy the house with fiat

3. Energy-efficient blockchain stopping the “NFTs are bad for the environment” narrative

The ownership

The goal of this crypto.coliving is to do as much as possible in crypto-land. But the house had to be bought in the physical world which is still ruled by the legacy system in Spain. The trick is to find the smallest possible legal wrapper to “own” the house.

We avoided the Cayman meme and went for an “Asociación sin ánimo de lucro” — basically a non-profit cooperative. Which mirrors perfectly what the NFTs are in that case: membership. The price of the NFT represents the membership fee. That’s it.

The association owns the house and has the only mission (written in its status) to run it as a non-profit coliving space and follow the decision of the DAO. The property is de facto forever “locked” inside the association which cannot sell it. Owning an NFT makes us members but not owners of the house. It sounds like a limitation, but remember we’re building a public good with non-computable ROI so it’s fine!

Staying at the coliving still requires members to pay a fee to cover the expenses of the house and the property management. Booking is done on-chain so that the ownership of the membership NFT can be checked. And an NFT accrues more voting power the longer it stays at the coliving. It’s what we call “The Ownership Economy”!

After the coliving opens the most important tasks for the governance will be to allocate funds properly but also to decide on parameters like the price for a night, the minimum and maximum duration of a stay, etc.

It is expected that people living in the house will submit proposals more on the micro level. Something like “mechanical keyboards should be forbidden in the co-working space”. A guest annoyed by these keyboards could accumulate enough voting power, convert them quadratically into votes to make this new rule a reality.

WAGBAC: We’re All Gonna Buy A Casa

Learnings

One day before the public launch scheduled on 3/3 only a fraction of the whitelisted people showed up to buy their NFTs. On top of that a technical glitch with the art was discovered and prompted us to pause the drop and take a step back. We were very far from having enough minters. The project did not succeed, and here are some of the learnings.

Niniche: a niche within a niche

The first niche was for digital nomads. There are many of them now, but the majority didn’t understand the concept of a DAO. The main reaction was “why would I give you 300€?” when there’s actually no “you” or “me” but just a non-profit association made of people who want to see this idea come true. Some of them were excited to own an NFT because they had heard about it in the news, and maybe that would make them rich…

The second niche was for crypto people. Here they understand the approach after seeing similar things happen before. But only digital nomads in crypto would be immediately sold on the idea. The others were supportive but waiting for the hype to pick up before committing to it. This was a classic chicken-and-egg problem.

Next time it would be clever to find existing DAOs or whales to commit at least 50% of the amount so that the hype is created and more crypto people are enticed to join the fun. Digital nomads might follow when they hear about this crowdfunded coliving space, but probably not before it’s 90% funded.

PGP: public good paradox

Public good funding is about making people donate money to a project. This works relatively well in crypto-land especially because it’s giving donors a special status. Oh that sweet feeling of thinking you’re a good person making the world a better place!

However when coming forward with a public good that is too realistic it becomes harder to convince donors because they’re just less excited and they start nit-picking. Building a city is way more unrealistic than building a coliving space, but sounds much better in a Twitter bio.

Next time it would be appropriate to be more unrealistic and to sell a macro dream that seems unreachable. Even if the first step is a non-bullshit action at the micro level.

Side-projectistan: energy is the currency

Contributors to this crypto.coliving project worked for free with the goal to pay themselves back with money raised during the NFT drop. A common practice in the world of side projects.

For posterity’s sake, this was the core team:
- Theo (me), crypto
- Marta, architecture
- Lea, design
- Damien, NFT

But the energy required to start such a project is huge. I personally estimate that I spent more than two full months on it. Building, communicating, coordinating, iterating, etc. And we could have rebooted the project if there had been some energy left — which wasn’t the case.

Next time it would be sensible to treat such a project as a startup and find a way to compensate contributors up-front to increase skin in the game and likelihood of success.

Coliving is getting a lot of tailwind. When people try it they become convinced it’s the future, and it’s very common to hear them say that they want to open their own coliving space. They love investing in real estate but the reality is that few manage to do it.

This will happen. And there are some interesting experiments going on, like the Manor DAO by Poolsuite. I’m expecting to see people try this idea with co-working spaces — which are perfect first steps for coliving spaces. I’m less bullish on cities because this is more prone to bs.

I really hope this will happen. Serendipity is priceless. LFG WAGBAC!!