Genesis

Intro

Artificial intelligence will give each individual infinite leverage to realize their dreams. This will expand humanity's collective potential to unimaginable heights, promising a future of abundance and prosperity.

But, in a post AI world, our debt-based economic system will concentrate opportunity, cruelly oppress those who don't come from wealth, and tear society apart at its seams. Losing even one human to an oppressive economic system will be a catastrophic tragedy for humanity.

In this essay I propose a fundamentally different economic system that will not only democratize the opportunities AI enables, but also give each individual a stake in the collective upside in order to both unlock humanity's potential and keep society united.

Problem

Artificial intelligence will make the world very extreme: a small percentage of people will be responsible for the majority of economic value created — a power law distribution of outcomes. The more powerful AI becomes, the more extreme outcomes become, and the lower the median outcome becomes. Extreme outcomes aren't new; any highly complex creative activity has extreme outcomes. The average startup founder, musician, or content creator makes nothing, while the best ones generate astronomical outcomes. What is new is that the entire economy will become very extreme instead of just a few creative domains.

In such an extreme world, debt is death. Everything will be too risky to finance with debt. This increase in risk is not due to fewer opportunities. In fact, AI will enable far more domains of human expression, leading to many more opportunities. Due to the extreme winner-takes-all nature of outcomes within each opportunity, the median outcome falls to nothing, and thus financing with debt becomes too risky to be viable.

Despite this truth, the world is operating on an outdated model of outcome distribution that is becoming ever more misaligned with reality exponentially fast. As I type this, billions around the world are still taking out loans to finance their lives — from their educations, to their homes, to their businesses — without realizing that they will never be able to repay them. Most are walking into a catastrophe without even knowing it.

Moreover, even if one is debt-free, they will almost certainly be outcompeted by one who can experiment boldly and tinker freely with abundant resources.

And critically, in an extreme world, if individuals do not have a stake in the collective upside, they will resent the winners — corroding social cohesion and eventually tearing society apart at its seams.

Thus, the enemy is our outdated, oppressive, economic system, not extreme outcomes. We reemphasize that extreme outcomes is an inherent feature of complex, creative work. We cannot have an AI-enabled creative, prosperous society without extreme outcomes.

Therefore, we urgently need a viable way to:

1. Finance human activity to ensure that anyone with potential has access to the resources they need to realize their potential — regardless of the circumstances of their birth.
2. Give each individual a stake in the collective upside to keep society united.

Otherwise, human potential will be cruelly crushed, society will be torn apart, and we will fail to fully realize humanity's potential.

Venture capital

In an extreme world, venture capital is the only viable way to finance our lives.

At its core, venture capital unites people by intertwining their success and failure.

VC is already a popular way to finance startups: investors give early stage companies money in exchange for a stake in the company itself. If the company succeeds, the investors make great returns. If the company fails, the investors lose their investment. Importantly, startup founders are not indebted to investors, and because of the shared stake, investors give founders the resources they need to succeed.

Venture capital works exceptionally well in domains with extreme outcomes because an investor only needs a few of their bets to win in order to more-than-compensate for the many failed bets they will inevitably have (as the median outcome is nothing). Therefore, VC is the only way to finance activities that have extreme outcomes, as no other mode of financing can withstand the extreme failure rate.

But, VC as it is understood today is far too restrictive. Today, only those ready to start a company can leverage venture capital. In order to unlock our collective potential, we must expand VC's reach to serve all of humanity's endeavors.

We need a new financial instrument that democratizes venture capital.

Personal token

In an extreme world, venture capital is the only viable way to finance anything.

Venture capital is a popular form of financing in the startup world: investors give companies money in exchange for equity in the company. If the company goes on to win, its investors profit. Venture capital works exceptionally well in domains with extreme outcomes because an investor only needs a few of their bets to win in order to more-than-compensate for the many failed bets they will inevitably have. At the same time, founders raising capital by giving up equity in their companies can take greater risk without the fear of being crushed by failure (as they won't take on debt if they lose). Venture capital and extreme outcomes is a marriage made in heaven.

But, venture capital, as it works today, is far too restrictive. We need a new financial instrument that enables anyone to raise venture capital based on their potential, without having to start a company today (or ever).

Which is why we're creating the personal token: a financial instrument that represents an individual's potential. Individuals can raise venture capital by selling equity in their personal token.

Your personal token's value is grounded in your equities in companies and other personal tokens. A portion of the capital you gain when selling equity in a company or another personal token is sent to your personal token shareholders proportional to the equity they hold.

Unlike company shareholders, personal token shareholders have no direct “ownership” or control over anything the personal token owner does. The personal token owner retains full agency over their lives.

Each personal token is associated with a wallet: where funds are deposited by investors on a successful fundraise, and from which capital is collected to finance investments in other personal tokens.

System

Personal tokens can't exist in a vacuum. We need many functions in order to have a thriving ecosystem of individuals investing in each other through their personal tokens. The system needs to legally ground personal tokens, fight fraud, enable discovery, etc. As personal tokens becomes a critical primitive that finances all of human activity, there will be many more functions that we will need, but can't predict looking forward.

In order to finance the various functions this system has to perform, the system will collect an “equity fee”: a small stake in a personal token in each of its successful fundraising rounds.

To be able to collect this equity fee, we have another type of token called the “NetworkToken”. The NetworkToken represents the collective potential of the entire network through its micro stakes in all personal tokens (that have successfully fundraised). The wallet associated with the NetworkToken is the network's treasury that helps finance all of its functions.

Future-proofing

A personal token is a long-term instrument that represents the most valuable asset in the universe: human potential itself. Therefore, this system must be designed to stand the test of time, to cultivate trust and instill confidence that investments will be respected well into the future — without which we won’t be able to get off the ground in a meaningful way.

To make this system future-proof, we will make the system sufficiently decentralized and easily forkable.

Decentralization

We will build this system in a sufficiently decentralized way so that insanity can never derail it. This system will be decentralized in both its core technology and its organization.

From a technology perspective, the core ledger (which contains information about who owns how much of which tokens) will be implemented on a blockchain. All transactions will occur on chain in USDC.

From an organization perspective, this system will start as two separate entities: a nonprofit organization (“Foundation”) — that serves as a steward of the core idea of personal tokens, and a for-profit company (“FirstCompany”) — that grounds the core idea in reality.

The Foundation

The Foundation's responsibility is to ensure long-term optimization of our mission to democratize opportunity.

To this end, the Foundation owns:

1. Core ledger, smart contracts, and the code that runs them.
2. NetworkToken.
3. Treasury (the wallet associated with the NetworkToken).

The Foundation will spearhead the development of the core underlying technology that the system is built upon, ensure a rich ecosystem of products and services based on personal tokens, and bring the idea of personal tokens to the world by educating & shaping policy.

The FirstCompany

On the other hand, the FirstCompany is responsible for grounding the idea of personal tokens in the real world. It will focus on ensuring legal compliance and fraud-mitigation to enable users to participate seamlessly. The FirstCompany will also admit users into the network in a selective & tiered manner, build the clients (web & mobile apps) used to engage with personal tokens on chain, enable discovery, and whatever else it takes to drive usage.

The FirstCompany will operate like a lean, hungry startup.

Checks & Balances

In the early days, the Foundation and the FirstCompany will act seemingly as one because they both want the same exact thing: bringing personal tokens to the world as quickly as possible. Over time, there will be a growing tension between the Foundation & the FirstCompany. The Foundation will create opportunities for other companies to come and build on top of the network — that may even directly compete with the FirstCompany — to cultivate healthy competition to ensure a rich ecosystem of products and services. The only advantage the FirstCompany has is being first. The Foundation will ensure that users are able to switch between various products and services built upon personal tokens.

The incentive structure of a company doesn't allow it to remain relevant for centuries. Sooner or later, the FirstCompany will be outcompeted on all of its functions. New companies will form and die in their efforts to serve the growing changing needs of users. The Foundation, on the other hand, is designed to last.

The Foundation cannot be “bought”. Owning shares in the NetworkToken does not come with voting rights or influence in governance. Initially, I will be responsible for building the initial Foundation team. But over time, we will implement a process to elect & fire Foundation members.

Fork-ability

Fork-ability ensures that even if our system goes insane, a new system can seamlessly take its place to continue the mission of democratizing opportunity through personal tokens — in a way that is aligned with reality.

To disincentivize the Foundation from going insane, we will optimize for ease of fork-ability in both the technology and culture.

That is to say, if the Foundation itself goes insane, the core ledger itself can be forked, a new NetworkToken issued, and a new foundation can continue the work to democratize opportunity in a way that's actually aligned with reality.

Culturally, the Foundation will operate transparently: every cent it spends, every idea it produces, every conversation it has, every line of code it writes will be published for the world to see, judge, and steal.

The Foundation will hold no secrets.

Personal tokens will eat the world

Personal tokens will start as a toy in San Francisco, the only place in the world crazy enough to play with it. Most of the world will, at best, view it as a piece of trash in the sea of "waste" that SF produces. Out of ignorance some may even perceive it as a tool for exploitation.

Then, personal tokens will rewrite our entire education system by enabling a better business model: instead of charging for education, great teachers will invest in students they want to train. In an extreme world, this will be the only way teachers will be able to earn what they deserve, and the only way students will be able to incentivize the best teachers to train them.

In an extreme, post AI world, the outcomes of nations too will be extreme. The most powerful nation will be orders of magnitude more powerful than the next one, leading to a near absolute economic and cultural domination. In a post AI world in which each individual has infinite leverage, the most valuable resource will be human potential. The nation that adopts personal tokens first will win because they will be the best at unlocking their collective potential. Eventually, the winning nation will force everyone else into this economic system.

So, in an extreme world, in addition to Universal Basic Income (UBI), we will need Universal Basic Equity (UBE) such that each individual has a stake in everyone else. When any one wins, everyone directly profits, enabling social cohesion. Eventually, we will further designate tokens as AI tokens, company tokens, and even nation tokens (e.g. “USAToken”). All investing in collective potential will happen in this system. Personal tokens will eat the world.

Invest

I'm offering a small group of early investors the opportunity to participate in the genesis round — the first issuance of NetworkToken shares.

Terms

At genesis, 100,000,000 shares of the NetworkToken will be issued.

• Raising: $20 million
• Number of shares offered: 5% of NetworkToken (5,000,000 shares out of 100,000,000)
• Valuation: $400 million (post money) (@ $4 per share).

Investors will receive Token Share Warrants, which are legal contracts entitling you to receive a fixed number of NetworkToken shares, delivered upon token launch. Shares will vest linearly over a 4-year period with a 1-year cliff.

Shares in the NetworkToken does not come with governance control or voting rights. However, as early shareholders, you will have access to our thinking at the earliest stages, and play an outsized role in shaping the direction of this protocol through conversation, feedback, and alignment. We believe systems like this are shaped in dialogue with their first believers.

NetworkToken shareholders will not receive dividends until the network has matured, as all funds will go to the treasury to fuel operations. The When the time is right, the Foundation will think through when and how to start issuing dividends.

To be able to invest: you must be based out of the SF Bay Area. You must believe that personal tokens will positively transform humanity. You must bring something valuable to the table aside from capital that will help us win.

Dilution

As personal tokens scale, we will issue more NetworkToken shares proportional to the number of users and their demand to hold equity in the NetworkToken. We may also have future fundraising rounds to fuel operations that will lead to dilution. Investors will have pro-rata rights and will be notified at least a week before we issue new shares so that they can choose to buy shares to retain their equity percentage in the NetworkToken.

Capped returns

Eventually, the NetworkToken will represent the potential of all of humanity. It will be worth what humanity believes its potential is in that moment. This will become astronomically high, accelerating exponentially. Therefore we must cap the returns so that no individual disproportionally captures the value that all of humanity will work hard to generate for generations to come.

No shareholder will be entitled to more than 1,000x their original investment. Once this threshold is reached (through dividends, liquidity events, buybacks, or any other protocol-driven mechanism), the economic rights of those shares will be redirected to the Foundation treasury. The shares may continue to exist for symbolic or governance purposes in the future, but they will no longer accrue financial upside.

(TODO: we will need a more nuanced cap as it will need to cap returns for the founding team as well).

This return cap preserves early investor incentives while protecting the long-term legitimacy of the network.

Share allocation

• 5% for genesis investors.
• 15% for team (this includes teammembers in both the Foundation and the FirstCompany).
• 80% held by the Foundation to be released gradually in a planned way to enable more to participate.

How capital will be used

Capital raised will be used across three categories of work:

1. Legal Infrastructure: ensuring compliance, and handling filings and identity verification.
2. Core Technology: the foundational ledger, on-chain share registries, capital flow smart contracts.
3. Product & Distribution.

A significant portion of the funds will be held in reserve to help us weather unknown challenges that we will inevitably face as we bring personal tokens to the world.

Who am I?

I'm homan. A nobody. I've accomplished nothing that I consider worth mentioning. You shouldn't believe that I can pull this off. In fact, if you like this plan, you should steal it and beat me. I welcome you. I challenge you.

I'm going to build the most powerful team to have ever been assembled, with the right incentives, and bring personal tokens to the world — to democratize opportunity.

This is my life's work.

Next steps

In the coming weeks I'll be meeting potential investors and teammates in San Francisco. DM me.