The history of the token house
The record of a hacker house where we pay for our stay with tokens that can’t be bought with money.
Introduction
This article is a record of events at the hacker house, BLH House, during ETH Denver. The lodging tickets at that hacker house were managed not by legal currency, but by ERC-20 tokens. Tokens could be earned through receiving gratitude from others and also carried an aspect of an experiment for escaping capitalism. Below, I would like to discuss the founding period, transitional phase, revolution, and demise of this BLH House.
Purpose of BLH House
The hacker house is named Blue Lock Hacker House, commonly known as BLH house, which is taken from a Japanese soccer manga that features a striker named Blue Lock. The lodgers are entrepreneurs attending a cryptocurrency event called ETH Denver.
The inception of BLH has three main objectives:
Manage the bustling and often chaotic comings and goings in the Hacker House (HH) with tokens.
Experiment with the feasibility of realizing an economy of feelings, which deviates from capitalism.
Simply because it seemed interesting.
With these objectives, a system was established where lodging tickets could be purchased with tokens, and a certain amount had to be paid to stay. In other words, the value of the tokens is backed by the lodging tickets.
Also, at BLH, the service called Foteison was used to visually track token transactions on Twitter.
With the use of the Foteison service, it’s possible to send tokens to a specific individual on Twitter using the following command: “@foteison tip @<ID> xx(quantity)”.
$BLH Tokenomics
First, I would like to explain the tokenomics of the token used in BLH house.
Initial Supply: 210,000 $BLH
Initial Allocation: Each of the six initiators receives 3,500 $BLH. However, the initiators pay 350USD to the Airbnb contractor.
Utility: Lodgers send 2,100 $BLH per night to the management account (@BLHdenver). A lodger is defined as someone who is at BLH house at midnight. Also, those who do not pay the lodging fee cannot stay from the next day onwards.
There were also rules regarding additional issuances, but they will be omitted here.
Formation Period
Initial allocation was carried out, and there were exchanges of fiat and $BLH between the initiators and others who wanted to stay at BLH house.
During this period, there was particularly no depletion of tokens, and the main focus was on getting everyone accustomed to the Foteison service and the game.
For securing future lodging tickets, people were earning $BLH. There were individuals exchanging labor for $BLH by doing chores such as cooking, and others indirectly exchanging fiat for $BLH by providing cola or ordering Uber.
The commonality is, $BLH tokens were earned not by exchanging them with fiat currency, but by providing aid to other members of the HH. In other words, it was possible to sustain by performing actions that were appreciated by others. In this respect, a different set of values and systems was formed in this BLH house, separate from capitalism. We referred to it as a “sentiment economy”.
Transition Phase
By this time, people got used to the system, and imbalances in token holdings emerged. One of the most interesting phenomena that occurred was the formation of a trend where hoarding tokens was seen as uncool. Hoarding tokens was perceived as being a taker who isn’t expressing appreciation, forming a certain understanding. On the other hand, for people like cooks who were clearly giving a lot, the perception of being uncool even if hoarding, was not formed.
This “uncool” perception is a matter of life and death in this HH where relationships can earn lodging tickets, and there’s a possibility that one’s future livelihood could be threatened. Therefore, people began to make transactions at every opportunity. Typical instances include suddenly saying thank you and sending 1000$BLH. There were also mean individuals who would send even more to those who were hoarding.
To systematize this “trend,” a common sense to cause inflation in the lodging tickets started forming. The following effects were expected by causing inflation:
Reducing the incentive to hoard: This would increase the transaction volume and activate interactions among people.
Raising the value of “today’s” labor: Excluding vested interests. Preventing people who have acquired $BLH for future lodging tickets from staying without doing anything from now on, encouraging labor and appreciation.
Making it beneficial to express appreciation: As it will be necessary to acquire $BLH over the future, an incentive arises to strive for building relational values.
There was a gentle agreement formation regarding these matters, but problems arose when actually implementing it. The firm agreement on the inflation rate and implementation timing could not be reached before the management changed it, a tragedy of centralization.
At this point, the BLH house members recognized the following:
There’s a need to clarify the consensus formation method and the way to implement new rules.
How to form a consensus including people who are not staying in the BLH house but hold $BLH. (For instance, there was a time when Kumavis of Metamask came to visit, and tokens were sent.)
February Revolution
To resolve the aforementioned issues, the residents of BLH House carried out a hard fork. The objectives were to grant voting rights only to the residents of BLH House and to clarify the consensus and implementation of new rules.
Newly established points include:
Method of public announcement: Submitting proposals on Discord following a format.
Definition of eligible voters: The previous day’s lodgers.
Voting method: Conducted by sending $BLH to the management account. Positions of approval or disapproval are expressed on Discord.
Voting period: 12 hours from public announcement.
Resolution method: Calculated based on quadratic voting, adopted with 2/3 of the voting power.
Immediate resolution: Unconditional adoption with over 90% approval from eligible voters.
These were first established, and an immediate resolution regarding inflation measures was carried out. It is a 30% increase in lodging fees per day.
Chaos Post-February Revolution
After the implementation of the inflation measures, people struggled to cover the cost of lodging tokens due to the original supply amount, the uncertainty of HH lodgers, and the high inflation rate. Although a resolution on additional issuance was passed, it was marginal and did not lead to a fundamental solution.
People endeavored in effective fiat currency exchanges by working (house chores) or ordering Uber for others when it came to raising tokens. On the other hand, there were also individuals who simply begged.
In light of this, individuals scheming to secure stable lodging vouchers emerged. This led to the establishment of a union by syora, askyv, and tkgshn.
With askyv’s capital, who had long worked as a cook and hoarded tokens, they contemplated starting a business. They considered gambling, insurance, and financial operations, and also tried introducing the concept of inexpensive lodging vouchers by purchasing air beds.
Their speculation was to target the vulnerable who basically found lodging difficult, engage them in a zero-sum game, and probabilistically rescue but also probabilistically bankrupt them. Bankrupt individuals were temporarily loaned by askyv, with a usurious interest rate that exceeded the inflation rate of tokens. If they couldn’t repay, the settlement was done in dollars.
Meanwhile, the administrator of the operational account (pinokey) was plotting a coup leveraging his authority.
Introduction of a licensing system for gambling and financial operations.
Determining penalties for individuals who stayed without payment.
Supreme decision-making authority on subtle nuances.
The End of BLH House
Although many schemes were brewing, aside from the exploitation of one individual from the joint company, all vanished into thin air.
This is because due to the excessively high inflation rate, a large number of people couldn’t afford the lodging fee, which resulted in a trend where it was acceptable to stay without purchasing lodging tickets. It’s a collapse of the system. Also, being simply busy with work at ETH Denver and not having the time to allocate to token governance could have been a factor.
However, we surely had a first-time experience in our lives. It was very stimulating and there were many lessons learned. Let’s reflect on this as a conclusion.
Reflection
Firstly, the method of visualizing “gratitude” and as a result, visualizing “takers” too, was a very interesting attempt at building a mutual aid-oriented ‘emotional economy’ sphere, which is not capitalist. In the end, when the living conditions of the citizens became harsh, although it didn’t become brutal, the situation regressed to a far-from-peaceful part of token scrambling, which is sadly understandable.
Also, having no familiarity with politics until now, I was deeply involved in setting the collective living guidelines which offered a lot of learning. It’s mostly not written in this article, but the most learning came from the discussions for making big decisions. Everyone being entrepreneurs and managers, there were many learning points in decision-making aspects such as prioritizing and choosing. After this experience, there’s a sense that nations and politics suddenly became something closer.
On the other hand, there were many issues such as deficiencies in token design and consensus mechanism, and eventually, the social contract was discarded. This would likely be due to the limitations of off-chain and lack of execution power.
Towards Autonomous World and Fully On-Chain Game
The primal experience for me venturing into the field of Autonomous World/Fully On-Chain Game is clearly rooted here in BLH House. The collapse of the game in BLH House was due to its off-chain nature and lack of execution power. In other words, by conducting it fully on-chain and managing contracts and their execution through smart contracts, a completely fair form of meta-game can be played.
The merits of being fully on-chain include being able to change rules as long as consensus is reached, transparency in rules, and assured execution based on contracts.
The occurrences in BLH House were a meta-game, and it could be rephrased as a political game. This genre of games could only exist in an incomplete form before smart contracts. The politics of a nation, needless to say, is for a limited number of people, and also, there wasn’t transparency for them either. On the other hand, even if one tries to do it among friends, realization is difficult due to lack of execution power.
Fully on-chain games make it possible for everyone to play this new game genre, meta-game.
Contributions to Sociology and others.
The experience at BLH House is clearly full of learning, and similar attempts would be extremely beneficial as a part of lessons for students.
Fully on-chain games that enable similar meta-games are unparalleled as venues for social experiments.
If a cooperation fee is paid to participants, social experiments can be conducted targeting people around the world. Moreover, being fully on-chain allows tracking transaction history, enabling the payment of rewards only to cooperators after the experiment ends, and not paying non-cooperators. This has the potential to provide work opportunities to people globally. As long as one is cooperative, they can participate in social experiments and earn rewards.
The ease of this experimental environment is likely to bring about an accelerated development in many humanities academic research areas such as sociology, political science, game theory, behavioral economics, psychology, etc.
Acknowledgement
The service used: Foteison(TIPWAVE)
Foteison is a system that allows the exchange of unique tokens on Twitter and Discord, enabling the incentive and evaluation of community members. It can also be used for community governance, and its distinctive feature is that community members can easily tip each other. It is currently known as the service “TIPWAVE.” If you wish to use it, please contact Iijima.
Major participants
SUIKA, askyv, HANA, jun, tkgshn, chi, kid, yuki, pinokey, masato, syora