Economic Growth: A Nation of Owners, not Renters
This post is the final instalment of my 8-week series of research about the failing economic system, solopreneurship trend, blockchain, and Solana Pay.
This research wouldn’t have been possible without the support of Superteam UK so follow them on X.
If you missed the previous articles, I made a Gitbook for this series, which also functions as a playbook for the DAO.
And, here we are, at the closing article of the 8-week research series.
As a reflection to ponder, I’d like to add one more point on the utilisation of blockchain towards a more benevolent world where small businesses participate actively in the economy. Solopreneurship becomes the catalyst of this change, and empowering them means contributing to the change we would like to see.
The key idea is about fractional ownership, represented by a token.
Note: if you’re reading this from the standpoint of a long-time blockchain aficionado, you might skip this part as I’m going to discuss real-world asset tokenisation, or what is commonly called RWA tokenisation.
Yes, it sounds a bit techy, but stick with me. It’s pretty cool and not as complicated as it sounds. This idea could change the game for small business owners looking to get a leg up.
What’s the Big Deal with Tokenisation?
Imagine you’ve got a small café. It’s your pride and joy. You’re thinking about expanding or maybe just need a bit of cash to get through a rough patch. Traditional routes like loans or finding a few big investors can be tough and not always ideal. Here’s where tokenisation steps in, waving a magic wand. In simple terms, tokenisation lets you take a piece of your business and split it into digital tokens. Think of these tokens as tiny slices of your café that people can buy and own. It’s similar to the basic idea of the DAO I offered in week 5.
Only, the ownership is represented in an equity-backed token. Therefore, the token now becomes a security token, as it’s proof of your fractional ownership of the small business.
Tokenisation is a process to record the ownership of something as a blockchain token. Since a chain is a distributed ledger, the ownership of a business or a property is recorded in the form of a token. You can draw a similarity with the traditional finance (TradFi) equivalent of a share. When you have 100 shares of company stock, it means you have the equity of that company at the amount of the corresponding stock that you have.
Issuing stock requires some legal steps and is generally lengthier than creating a token. Besides, a company must go public and trade in stock exchanges before issuing the common stocks that are accessible by the members of society.
Tokenisation allows the ownership at a fraction of the cost and time since it’s codifiable in a smart contract.
The benefits of tokenising small business ownership are multiple:
- Everyone’s invited: Investing money is not only for the big fish with deep pockets. Anyone can invest, especially a fellow little guy to support another little guy’s business. This is an example of the distributist economy that I mentioned in the article of week 2.
2. Better liquidity: Selling shares the old-fashioned way can be like waiting for a kettle to boil. Tokenisation can speed things up, making the business nimble.
With the small businesses owned by the boomer generation looking out for an exit as I shared a fortnight ago, equity tokenisation allows them to stay in the hands of the decentralised economy rather than the big corporations.
3. Keeping it transparent: Everything’s on a public blockchain, an online ledger that’s visible to everyone. Since the transaction mutation is trackable, it builds trust.
Note: if you’re new to how a wallet works, feel free to read my article here where you can get an idea of how the ledger data is accessible to everyone.
4. Reducing costs of the middlemen: Banks and brokers often take a slice of the pie for M&A or share issuance. With tokenisation, the fee is considerably lower. For instance, if the transaction occurs at this DAO, then the fee goes to the treasury which in turn will be invested and yield is generated.
Moreover, we can expand the use case for homeownership, instead of businesses only. Forbes article summarises comprehensively the dire reality we live in wage stagnation can’t match the house price inflation [1].
In the case of homeownership, the fractional equity works for a house with multiple rooms that can be leased towards different renters. The proceeds from the rent will then be split according to the weight of each token owner.
A simple diagram is as follows. I envision this for the P2 (Priority 2) of the DAO.
As the participation grows, the investment can be made in the form of equity ownership and no longer direct funding.
This is applicable to solopreneurship businesses with established revenue schemes so that the investors can also “own” the business. Moreover, the yield can be returned to the investors in the form of tokens which can then be exchanged with stablecoins like USDC or simply withdrawn to fiat.
When the token price increases, the conversion rate also increases proportionally, resulting in a better return to the investors and consequently, attracting more investment. As the world follows the money, this small business ownership model garners more attention. Therefore, the solopreneurship business tokenisation is the foundation before this plan happens.
And now, it’s my turn to conclude the research series. I’d like to thank all of you who have stayed with me and read each week.
Key Takeaways
- job insecurity leads to solopreneurship, as work is still a means to achieve human dignity
- distributist justice is translated into decentralised ownership
- solopreneurs are at the frontier of this new economy
- providing them with a quasi-UBI empowers these creators and pioneers
- blockchain is an enabler for a DAO model and cross-border payment to break the geographical income limitation
Parting Thought
If you are a solopreneur, an investor, or simply know someone who might benefit from joining this DAO, feel free to join the Discord server or extend the invite link below.
Lastly, I can’t part ways with this series without reposting this image, the spirit of Berdaya DAO that I founded:
The idea is far from perfect and I know that writing it in the articles makes it sound a thousand times easier than implementing it.
Ideas are cheap, executing them is proof of excellence.
If you’re compelled by my ideas and willing to have further discussion on the implementation, feel free to book my time here ⏰.
If you want more articles that are centred around business and leadership that value gentleness and a holistic approach to problem-solving, feel free to head to my ✨Substack✨.
Until next time,
