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Reimagining Rent: From Analog to Computational Tokenization of Community Equity Interests

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Abstract

Throughout history, legal and financial instruments have been used to increase participation in the economy, adapt to changing socioeconomic conditions, and leverage new opportunities enabled by technology. Historically, the early technology of contracts and authentication-paper-in the form of contracts and records, led to the creation of deeds of sale and registries, which provided communities with a better understanding of who owned what land, how much land they owned, and how much money they had paid for it. The development of another paper instrument following the Great Depression, the mortgage, increased access to home-ownership, portable equity, and paved the way for a thriving middle class during one of the most economically depressed eras in American history. Even the technology of supply chains-boxes, containers, manifests, receipts, and vehicles-revolutionized how assets are bought and sold, increased transactional certainty, and lead to new opportunities for consumers, as those with one type of good were able to collaboratively build value through networks with people who have other types goods. Now, with the rise of digital networks and computational technologies, and against the backdrop of the Great Decoupling, it is time to be more daring and develop tools that further improve transactional efficiency, transparency, and equity by programmatically designing for both prosperity and antifragility. The market conditions are such that it is now possible to earn a portable interest in the well-being of your community by actively contributing to its growth. This paper outlines a preliminary structure for a Usage Appreciation Token (UAT), currently a paper model of a token that could be adapted into a digital environment. The pilot project and analysis herein is based on an implementation of the UAT model in Kansas City, Missouri in the commercial real estate context. This analysis demonstrates how new models for investment and rent, based on the UAT model, are competitive with traditional financial models, but provide considerable long-term advantages in the form of increased local resilience, better long-term asset performance, and more granular ways to access capital. Further, by leveraging data created by a UAT's transaction networks, there is an additional opportunity for UATs to be used to contribute to a more comprehensive understanding of community dynamics, address sustainability and biodiversity challenges in a data-driven manner, and empower communities with easier access by which they can make interventions that more directly achieve their stated goals.
Reimagining Rent: From Analog to Computational Tokenization of
Community Equity Interests1
By Bryan Wilson and Evan Absher2
Abstract: Throughout history, legal and financial instruments have been used to increase participation in the economy,
adapt to changing socioeconomic conditions, and leverage new opportunities enabled by technology. Historically, the
early technology of contracts and authentication - paper - in the form of contracts and records, led to the creation of deeds
of sale and registries, which provided communities with a better understanding of who owned what land, how much land
they owned, and how much money they had paid for it. The development of another paper instrument following the Great
Depression, the mortgage, increased access to home-ownership, portable equity, and paved the way for a thriving middle
class during one of the most economically depressed eras in American history. Even the technology of supply chains -
boxes, containers, manifests, receipts, and vehicles - revolutionized how assets are bought and sold, increased
transactional certainty, and lead to new opportunities for consumers, as those with one type of good were able to
collaboratively build value through networks with people who have other types goods. Now, with the rise of digital
networks and computational technologies, and against the backdrop of the Great Decoupling, it is time to be more daring
and develop tools that further improve transactional efficiency, transparency, and equity by programmatically designing
for both prosperity and antifragility.
The market conditions are such that it is now possible to earn a portable interest in the well-being of your community by
actively contributing to its growth. This paper outlines a preliminary structure for a Usage Appreciation Token (UAT),
currently a paper model of a token that could be adapted into a digital environment. The pilot project and analysis herein
is based on an implementation of the UAT model in Kansas City, Missouri in the commercial real estate context. This
analysis demonstrates how new models for investment and rent, based on the UAT model, are competitive with traditional
financial models, but provide considerable long-term advantages in the form of increased local resilience, better long-term
asset performance, and more granular ways to access capital. Further, by leveraging data created by a UAT’s transaction
networks, there is an additional opportunity for UATs to be used to contribute to a more comprehensive understanding of
community dynamics, address sustainability and biodiversity challenges in a data-driven manner, and empower
communities with easier access by which they can make interventions that more directly achieve their stated goals.
2Bryan Wilson is a Consultant with the Kauffman Foundation, the Editor in Chief of the MIT Computational Law Report, a Fellow at MIT
Connection Science, and a Member of Nested Minds Research; Evan Absher is a Senior Program Officer at the Ewing Marion Kauffman Foundation.
This research was funded by the Ewing Marion Kauffman Foundation. The opinions and ideas expressed herein do not necessarily represent those of
any of these institutions.
1This paper is based on a simulation of the Usage Appreciation Token model for the construction of 40 single family homes in Kansas City,
Missouri. Additional details about this work can be found in Elwood Hopkins’ article in the Stanford Social Innovation Review, “Building an
American Ownership Society” (Spring 2021), https://ssir.org/articles/entry/building_an_american_ownership_society#
I. Introduction
At the heart of the rental industry is a thesis that necessarily inhibits its growth and performance: property owners lack an
incentive to maintain a property more than is absolutely necessary because they do not live there and tenants lack an
incentive to maintain a property for which they have no portable equity interest. Accordingly, this adversarial relationship
sees an owner’s building fall into disrepair over time, while much of the value created by tenants through occupying the
same space goes uncompensated. This is one of the key reasons gentrification can lead to such disastrous outcomes -- a
lack of alignment between the stakeholders in rental transactions. Logically, then, it would seem desirable to find a way to
both increase the owner’s return on their initial investment, while also developing a new way to reward the tenants for
living and contributing to the property increase of the same space.
By shifting the focus from this adversarial paradigm solely focused on the bottom line to one that is generative and
rewards behaviors that lead to better asset performance in the long term, it is possible to forge a new path forward that is
mutually beneficial.
Indeed, throughout history, many of the longest standing financial and transactional instruments are those that harmonized
the business incentives, the legal mechanisms, and technological abilities in order to create new relationships that
benefited all parties involved. In the Middle Ages, stone contracts, market monies, grain receipts, and precious metal
currencies each functioned as a technology with legal significance that improved the economic relationships of those
using them to transact.3More recently, the Wörgl, the Wir, credit unions, trade unions, the LLC, and the Mortgage showed
that it was possible to adapt our financial instruments in order to correct for changes in socioeconomic circumstances and
build toward more generative community outcomes.4Now, modern community currencies, microfinance, crowdfunding,
digital money, and cryptocurrencies all present exciting new opportunities to program for an intended set of economic
outcomes.5In its own right, each of these instruments can be thought of as a token. Tokens, historically, have been used to
provide a representation of an abstract store of value that is used to transact between parties and that takes on a set of
measurable qualities (such as Securityness, Moneyness, and Commodityness), and that can be mathematically specified
based on how they are used and interact with other tokens in a transactional space.6
However, in spite of all these abilities to improve the relationships between individuals, businesses, and governments, our
legal and financial ecosystems have become complicated, inaccessible, and demonstrate either an inability or an
unwillingness to address challenges that many communities face. In spite of constitutional protections of due process, the
cost of justice and equity excludes many from such pursuit.7The practical effect of this is that many community dynamics
asymmetrically favor those with means over those without.Worryingly, this is by design. A direct result of the way the
legal system has been designed, as demonstrated by societal responses to events ranging from the Great Depression all the
way to the 2008 recession, is that bubbles and crashes follow periods of experimentation with new types of financial
vehicles when there is an exploitation of those vehicles by those who have the means to do so. Up front costs are
externalized in unregulated industries and the consequences are borne by the many much later on. The implication, then, is
that the existing legal and financial infrastructure provides stronger incentives for those performing these jobs to
perpetuate systems that are expensive and difficult to understand because it keeps them in high demand. As such, these
incentives prioritize antisocial and adversarial behaviors at the individual level over communal and generative ones.
7Daniel W. Linna Jr., The Future of Law and Computational Technologies: Two Sides of the Same Coin, MIT Computational Law Report (2019).
Retrieved from: https://law.mit.edu/pub/thefutureoflawandcomputationaltechnologies (“In the United States, estimates are that more than 80% of the
impoverished, and more than 50% of the middle class lack access to legal services, according to findings from the Legal Services Corporation and
cited in Access to Information, Technology, and Justice a Critical Intersection.”)
6For a general discussion on the various qualities of tokens, especially financial tokens, see Wassim Alsindi’s overview of TokenSpace, August 10,
2019. https://tokenspace.pubpub.org/.
5Tobias Adrian, Tommaso Mancini Griffoli, “The Rise of Digital Money” FinTech Notes - The International Monetary Fund, July 15, 2019.
https://www.imf.org/en/Publications/fintech-notes/Issues/2019/07/12/The-Rise-of-Digital-Money-47097.
4Alexander Lipton, Thomas Hardjono, Alex Pentland, Alexander Lipton, Thomas Hardjono, and Alex Pentland, “The Tradecoin System” From
Building the New Economy. MIT Press Works In Progress (2020). DOI: 10.21428/ba67f642.0499afe0.
3Carlo M. Cipolla, Before the Industrial Revolution: European Society and Economy, 1000-1700, 3rd ed. (New York: W. W. Norton, 1994). Douglas
Rushkoff, How Corporatism Conquered the World, and How We Can Take It Back, (New York: Random House, 2011).
These are all characteristics of fragile social systems. What is needed are antifragile social systems. Nicholas Nassim
Taleb defines Antifragility as beyond resilience or robustness (the resilient resists shocks and stays the same, while the
antifragile gets better).8As applied in the context of community investment, an antifragile approach would ensure learning
from mistakes, and making changes that lead to greater aggregate benefit to the whole community. These are the types of
behaviors that reduce the impacts of bubbles, but also ensure greater trust and participation among all the members of our
communities.
A composable and adaptable investment vehicle for community-based organizations that gradually transfers value from an
initial set of investors for some asset to the users of that asset would create more generative assets, reduce wealth
inequality, and could continually course correct by using data to improve equity outcomes. We propose a model for such
investment vehicles -- the Usage Appreciation Token (UAT). The first version of this model is not built with sophisticated
technology, but rather uses pen and paper in order to log and transfer fractional pieces of equity between parties based on
their use of an asset. Our paper model of the UAT uses a point system, wherein use of a given asset proportionally
generates points that function according to some set of conservation functions (i.e., a bonding curve) from which tokens
are created through buy and sell functions that are interdependent with each other.9Such a point system for modeling and
understanding different types of value through tokenized transactions could build upon existing work to understand the
meta-characteristics of token classification and analysis.10 Looking at the challenge of accounting for community value
more broadly, reimagining the concept of rent from one that is static to one that is dynamic, there is an even greater
opportunity space in which to develop a set of primitives that actively bias the outcomes of a community based on the
inputs of its members.
The rest of this paper proceeds as follows: Section II provides a simplified example of the UAT in the commercial rental
context, Section III simulates our UAT model based on assumptions from the Kansas City pilot project, and we conclude
in Section IV.
II. A Simplified Example
Consider the traditional finance, construction, and usage of a $100 million housing project. Typically, investors put in $35
million to start the project with debt-financing of $65 million. Over time, the investors are paid back, through ordinary
income, as tenants pay rent. Investors are incentivized to buy and build at the cheapest rate that returns a profit and rent at
the highest rate possible. The goal of maximizing individual profit causes investors to maintain the apartment at the lowest
rate that allows them to keep collecting ordinary income. For the people living in the building, the lack of a meaningful
opportunity to share in the wealth created by their inhabitance of the building means they are similarly motivated to make
only those repairs necessary to ensure the space is livable. Then, if a tenant fails to make a rent payment, the investors lack
any meaningful recourse other than mitigating losses through eviction and attempting to replace them with a new tenant.
During times of economic crisis, this is a mutually undesirable position for both the tenants who lose a place to live and
the investors who lose a source of income.
Now consider our UAT model, wherein incentives are aligned from the outset between all stakeholders; in this case, the
investors and tenants. Like in the previous example, investors put in around $35 million to start the project with
debt-financing $65 million. Instead of paying rent, however, the tenants contribute a pro rata interest to a capital account
in an amount approximately equal to a rent payment. The interest is portable, meaning if the tenant moves they would still
10 see Wassim Alsindi’s TokenSpace for an overview of these concepts. However, note that they are beyond the scope of this paper.
Available at: https://tokenspace.pubpub.org/pub/ryvuc23a/release/4
9Michael Zargham, Jamsheed Shorish, and Krzysztof Paruch, “From Curved Bonding to Configuration Spaces” 2020 IEEE International Conference
on Blockchain and Cryptocurrency (ICBC), 2020, pp. 1-3, doi: 10.1109/ICBC48266.2020.9169474. For a general explanation of bonding curves,
read Justin Goro’s “Token Bonding Curves Explained” Coinmonks, Medium, April 30, 2018. Available at:
https://medium.com/coinmonks/token-bonding-curves-explained-7a9332198e0e.
8Nassim Nicholas Taleb, Antifragile: Things that Gain from Disorder. Random House p. 20 (2013).
be entitled to some or all of the interest they have accrued and if the inhabitant is unable to pay the full amount of rent
each month, they will be able to draw down from their capital account. Alternatively, tenants in a stronger financial
position could pay an amount over their expected monthly payment to advance their equity position. Over time, the
tenant’s equity interest can either be used to buy out the investor and the debt financing or the interest could be sold with
the asset on the market, an opportunity to participate in the windfall of the property. Through the use of the property, the
tenants have the opportunity to become owners of the property or otherwise participate in its success.
Usage Appreciation Token Charter
Name
[name of the UAT]
Description
[short overview of the UAT: what it is; how it works; who it’s for]
Description of
Property
[property involved]
Appreciation
Terms
[how is the value of the token connected with its use]
Financial Terms
[from a financial perspective, how is this modeled]
Legal Structure
[from a legal perspective, how are the operating rules implemented]
Technical
Structure
[From a technical perspective, how do the funds get allocated]
Notes
[Additional notes about use of the UAT]
A blank UAT Charter in which the terms of the token can be expressed, linked, and understood
Meanwhile, in our UAT model, the equity investors still receive an annual distribution, even though most of their return is
upon the liquidation event. The monthly capital contributions by the tenants are also used to buy down the investors
interest at a specified rate of return, after taking into account operating expenses. If a tenant is unable to make a monthly
contribution some month in the full amount, their capital account could, for example, be decremented in the form of
equity and the investor would have a new way to recoup value that would otherwise be lost and that could lead to
evictions. This insulates each party against recessions and creates more harmonious relationships between these parties.
Extrapolated further, and imagining scenarios by which these generative concepts could be extended beyond housing, the
UAT model could be adapted to create new incentives for the finance sustainability projects and maintenance of local
utilities. By integrating these different modes of value generation together, it is possible to configure them in ways that
produce passive income for the users. A housing complex that uses our UAT model to provide for both the transfer of
ownership among these properties and also to finance the construction of solar and photovoltaic cells transforms from
merely a place where people live to one where people live and one that generates power for all therein.
III. Simulating a Usage Appreciation Token
The fundamental assumption of our example is that the basic mechanisms of capital markets can be democratized to
include more people and extended with digital technologies to include more forms of capital and reveal deeper insights
about a community’s financial health. The analysis is based on three different investment structures for the construction of
an apartment complex in Kansas City; each model is a byproduct of discussions and negotiations with partners, investors,
developers, community leaders, policymakers, and service providers. The investments simulated in this version of the
article are based on the following models: PE is based on the traditional private equity model, UAT is based on a pure
version of the UAT model, and UAT/PE is a hybrid between PE and UAT models that is generated by creating separate
classes of stock representing each type of interest.
There are three sets of major assumptions within the models that we use. First, there are three sources of equity that help
finance the project, Senior Equity,Junior Equity, and Debt Financing. The Senior Equity would be filled by market-driven
investors seeking a competitive return. The Junior Equity would be filled by government, philanthropy, or impact
investors seeking a self-sustaining and equitable solution. In order to have any functioning UAT model, there needs to be a
minimum of two classes of stock set up: one for the interest of the investors, which receives annual distributions and could
leverage depreciation, and one for the community that would capture residual value of the investment. Second, in the UAT
model, the investment thesis for the Senior Equity is based mostly on generating a return through the liquidation event at
the end of the hold. In our model, the Senior Equity receives a 9.16% IRR before any tax credits, depreciation, or other
boosting mechanisms. Third, the Junior Equity would receive annual distribution in the form of an interest-only payment
amounting to a 2.25% IRR. This Junior Equity also serves as an anti-dilution measure as it will be the 15% of the capital
stack that the community buys downs, thus preventing dilution of the Senior position. Finally, the community would own
15% of the investment in aggregate and the same percentage per unit of the building. At the point of liquidation, the
occupying entity holder, i.e. the Community Equity, can either elect to use their holdings to purchase the home or maintain
their equity position and participate in the proceeds of the sale. The UAT/PE model is the same except that the investment
thesis for the Senior Equity receives annual distributions of 6% instead of participating in the liquidation event to realize a
return. While this model does shrink the return timeline and reduce the risk to the Senior Equity, it also limits IRR to
roughly 6 - 7%. Moreover, the UAT/PE model reduces the available equity over time and makes the equity mechanism
and exit more complicated and less advantageous to the community members. However, it remains an appealing option in
cases where more customization is desired.
Summary Statistics for Simulation of Apartment Construction in Kansas City, MO with Private
Equity (PE) Model, UAT Model, and Hybrid UAT/PE Model11
PE
UAT/PE
UAT
Year 5
Year 10
Year 5
Year 10
Year 5
Year 10
Equity Ownership Breakdown (%)
Investors
100%
100%
100%
100%
100%
100%
Senior
---
---
19%
0%
53%
53%
Junior
---
---
71%
71%
37%
27%
Community
---
---
10%
29%
10%
20%
Return at Sale ($)
Investors
$52 million
$68 million
$28 million
$62 million
$76 million
$103 million
Community
---
---
$7 million
$24 million
$8 million
$26 million
Senior Equity IRR
Multiple
1.55x
2.28x
1.26x
1.37x
1.31x
1.95x
Percent
9.26%
9.19%
6.00%
6.00%
7.54%
9.06%
Junior Equity IRR
Multiple
---
---
.33x
1.22x
1.08x
1.19x
Percent
---
---
-19%
2%
2.25%
2.25%
11 These numbers are approximate and have been adapted from multiple different Pro Formas in order to demonstrate only the relative viability of the
UAT and the UAT/PE models. These numbers are for a larger use case than our proof of concept in Kansas City and assume 1,000 units, 65% LTV
Debt Financing, construction cost of $125 per square foot, and average rent between $1030 and $1200 per unit per month.
While the UAT and UAT/PE models perform comparably to the traditional PE model according to classic economic
assumptions, there are some interesting opportunities that are available with these new models. For example, the broader
distribution of equity ownership for a capital asset can serve as a hedge during times of economic recession and keep
incentives aligned in such a way that mitigates, for example, urban blight. For cities, this sort of investment is more
appealing in the long term and could be used for more competitive bidding arrangements for different types of municipal
funding. Aligning the incentives between developers and residents and could assuage some of the issues with the
adversarial relationship between those living in a place and those seeking to develop it through investment. This
framework also creates better alignment with local and regional levels of government, especially through funding and use
of taxpayer money, increasing the access to stable capital that can entice private investment. Accordingly, this is
represented in the model above. Now, instead of asking for incentives that only serve to pad a return for the owners, the
government support, in addition to making the deal more profitable, creates an evergreen fund wherein money used to
build a capital asset is bought out by the users and the money from the taxpayers can be used to fund the construction of
new projects. Such arrangements can be further customized beyond the more binary PE and UAT models, where the
community has no equity in the capital asset or where the community buys the equity directly from the investors in
proportion to their usage of the asset. The hybrid UAT/PE model, as previously stated, uses different classes of stock to
achieve the balance between the two models at terms stated in the investment vehicle. Such a customization of rights
within the context of the UAT can be used to improve stakeholder representation and empower a community to begin
combining different ideas and incentives together for more expansive arrangements.
Usage Appreciation Token Charter
Name
Neighborhood Equity Vehicle
Description
Gradual transfer of ownership between Senior Equity,Junior Equity, and Community Equity
Description of
Property
40x single family homes
Appreciation
Terms
The tenancy contract is predicated on a monthly contribution in lieu of rent. The longer the tenant
stays in the building the more equity they earn. At some predetermined date, the Tenant will be able
to redeem the Community Equity for the full ownership of the building (buying the property
outright), liquidate their Community Equity to future tenants in an amount proportional to the
appreciation of the tenancy payments (selling their interest in the property), or holding onto their
interest and sharing in the value created while it suits them (holding onto their interest in the
property).
Financial Terms
A financial document, such as a Pro Forma, would be linked or otherwise attached to the charter
Legal Structure
A copy of the legal documents would similarly be linked and would include organizational
Technical
Structure
Structured to collect and distribute funds using an investor portal to distribute funds in accordance
with the Financial Terms and Legal Structure.
Notes
This structure could be expressed more dynamically through an interface that further builds
financial literacy and observes patterns and behaviors in payment history. Further, by building a
networked search function that enables participants to see other UATs in the area, as well as their
UAT Charters, users would have the ability to contribute to their communities in new ways. At
some threshold velocity, such a framework of networked UATs would begin producing network
effects for the participants who participate in the programs that benefit the expressed values of the
communities they are deployed in.
A simulation of the UAT Charter for the Neighborhood Equity Vehicle12
12 A more mature version of the UAT Charter could also include more granular permissions that are based on the programmatic expression of rights
for each party involved. However, that is beyond the scope of this paper.
As important as what is included in these assumptions is what is not included. The numbers above in our sample model do
not account for innovations that already exist. For example, we anticipate that photovoltaic cells could be part of a UAT
structure to transform networks of homes into microgrids that provide an additional cost off-set and further increase the
value generated by an apartment complex. The long term, combinatory benefits of adapting the UAT model are
compelling and, if effectively integrated into interoperable digital systems, could serve as a strategy to further boost local
economic resilience through new types of analysis.13 These models invite experimentation with the way communities
learn, govern, and work together to achieve common values. The idea of a financial vehicle that is able to be
“programmed” to achieve certain incentives is not a new concept; community currencies have long been used as a means
to improve local economic resilience and economists have acknowledged that financial vehicles that are tied to
non-economic values can harmonize the goals of a community with their finances (e.g., by developing baskets of
commodities that are valued as some combination of asset production, the creation and maintenance of infrastructure, and
financial certainty).14 What is new here is that the legal and financial models used by these investment vehicles can be
designed in such a way that harmonizes the specific incentives a community desires with an interface that enables them to
achieve their goals. Then, by using data to measure the efficacy of such measures, this type of approach could even be
used to bring a higher resolution to global standards attempting to improve sustainable economic growth, such as with the
U.N.’s Sustainable Development Goals and ESG metrics. This type of tokenization would be agnostic to underlying
technologies used to achieve these effects, but would be a starting point in the experimentation with new forms of wealth
creation that account for the shortcomings of the systems in place today.
IV. Conclusion
Combining the UAT Charter with financial and legal documents provides a more comprehensive framework by which the
impacts of a proposed token might be understood. Further, this approach also provides a better path toward understanding
the digital transformation of investment vehicles and transactional systems in a way that is mindful of the state of legacy
systems and can adapt better to future innovations.15 The long term effects of this will both incentivize participation with
and increase adoption of more equitable investment vehicles by level-setting between those working to build the future
and those working to maintain the present. A suite of products for building community equity is in line with the general
successes of antifragile systems that have been successful on the internet, the transformations from analog to digital to
computational, and provides a foundation on top of which cutting edge ideas can be implemented, analyzed, and
understood.
The internet has shown that the most antifragile systems (i.e., those which are empowered by complexity instead of
inhibited by it) are those which most empower all of their users.16 Older platforms like eBay and Wikipedia demonstrated
this in the early days of the internet and newer platforms, including Uber, OnlyFans, and Substack, continue to
16 Mathematics shows us that the complexity creates higher costs and barriers to entry and, thus, adoption. Herbert Simon’s The Architecture of
Complexity provides a stylized example of this phenomena in his proverb of Tempus and Hora (1962). Available at:
https://www2.econ.iastate.edu/tesfatsi/ArchitectureOfComplexity.HSimon1962.pdf.
15 John Clippinger provides a framework for how this might be understood and organized in his article, Reflexive Mutual Series-LLC, MIT
Computational Law Report (2019). Retrieved from https://law.mit.edu/pub/rmsllc/.
14 Bernard Lietaer, Jacqui Dunne, Rethinking Money: How New Currencies Turn Scarcity into Prosperity. Berrett Koehler Publishers, San Francisco,
CA (2013). ISBN: 978-1-60994-277-7. pp. 91. See also Douglas Rushkoff, Throwing Rocks at the Google Bus: How Growth Became the Enemy of
Prosperity Penguin Random House, New York, NY (2016). pp. 140.
13 Some notable examples include the work completed by Michiel Bakker, Alex Berke, Matt Groh, Alex ‘Sandy’ Pentland, and Esteban Moro, in the
“Effect of social distancing measures in the New York City metropolitan area” describes new types of policy analysis for tracking the spread of
COVID-19 using information from cell phones (available at: http://curveflattening.media.mit.edu/Social_Distancing_New_York_City.pdf); the Atlas
of Inequality Project, a project set up and maintained by the Human Dynamics Lab at MIT, which serves as a tool from which to understand
inequality at a more granular level than census data (available at: https://inequality.media.mit.edu/); and the City Scope project, maintained by the
City Science Lab at MIT, which provides new ways of understanding the connections and relationships between municipal policy, city planning, and
outcomes (available at: https://cityscope.media.mit.edu/).
demonstrate how it is possible to earn money while providing new types of value to all the parties in these transactions.17
Perhaps the key feature that explains why these platforms are so successful is because they earn money and provide value
on both the buyer side and the seller side of the transactions. This is two-sidedness of the something that has been missing
from rental dynamics and has led to information and power asymmetries in the creation and production of investment
vehicles.
By further specifying what such a point system rewards, it is possible to intentionally bias the transactions in a community
toward a specific set of outcomes that continuously and proportionally reward the behaviors that are best for everyone. In
the near future, this type of point system could be adopted for the development of more resilient local utilities, the creation
of microlending schemes to benefit local entrepreneurs, and mutual aid programs that provide advantage to the
disadvantaged.
Absent some intervention, the disparities that inhibit modern society promise to worsen unless the methods used by hedge
funds and private equity groups are democratized to the communities who most need to use these tools. The elegance of
the UAT structure is that it can accommodate a variety of different technologies and empower a diversity of communities
in order to programmatically calibrate toward their stated interests. Through the introduction of voting rights, these
interests could continuously be calibrated to the changing aims of the community; this is beyond the scope of this paper.
Another benefit to the UAT structure is its flexibility - the basic principles from a UAT specification could be tokenized in
either an excel spreadsheet or a blockchain network or something else completely. At a minimum, however, each UAT
should 1) create one class of equity for investors at the outset of an asset’s creation and another class of equity that is
liquidated to those using the asset, 2) over time, the common equity is used to buy out the investor equity, and 3)
outstanding shares from the commun equity pool are to provide liquidity for the investor equity. In our example we
account for Senior Equity,Junior Equity, and Community Equity; however, additional classes could be developed or
collapsed according to the assets intended outcomes.
17 See e.g., Yochai Benkler, Sharing Nicely: On Shareable goods and the emergence of sharing as a modality of production, The Yale Law Journal
(2004). Available at: http://benkler.org/SharingNicely.html. See also, Thomas Fried, “The Economics of OnlyFans” April 24, 2020. Available at:
https://xsrus.com/the-economics-of-onlyfans.
ResearchGate has not been able to resolve any citations for this publication.
See also Douglas Rushkoff, Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity Penguin Random House
  • Bernard Lietaer
  • Jacqui Dunne
Bernard Lietaer, Jacqui Dunne, Rethinking Money: How New Currencies Turn Scarcity into Prosperity. Berrett Koehler Publishers, San Francisco, CA (2013). ISBN: 978-1-60994-277-7. pp. 91. See also Douglas Rushkoff, Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity Penguin Random House, New York, NY (2016). pp. 140.
); the Atlas of Inequality Project, a project set up and maintained by the Human Dynamics Lab at MIT, which serves as a tool from which to understand inequality at a more granular level than census data
  • Michiel Bakker
  • Alex Berke
  • Matt Groh
  • Alex ' Sandy' Pentland
  • Esteban Moro
Some notable examples include the work completed by Michiel Bakker, Alex Berke, Matt Groh, Alex 'Sandy' Pentland, and Esteban Moro, in the "Effect of social distancing measures in the New York City metropolitan area" describes new types of policy analysis for tracking the spread of COVID-19 using information from cell phones (available at: http://curveflattening.media.mit.edu/Social_Distancing_New_York_City.pdf); the Atlas of Inequality Project, a project set up and maintained by the Human Dynamics Lab at MIT, which serves as a tool from which to understand inequality at a more granular level than census data (available at: https://inequality.media.mit.edu/); and the City Scope project, maintained by the City Science Lab at MIT, which provides new ways of understanding the connections and relationships between municipal policy, city planning, and outcomes (available at: https://cityscope.media.mit.edu/).