DRAFT - !!!INCOMPLETE - WORK IN PROGRESS!!!

1.0 Executive Summary

1.1 Introduction

For the past century our built environment has been realized under an inelastic corporate framework to achieve a specific & limited set of goals.  This has served us well considering the technology available.  New and emerging technologies provide alternatives and new capabilities.  Considering the tremendous mobilization of material, financial and human capital needed to construct, and operate buildings; I believe that it is appropriate that we seek out and demand more utility, productivity and value from our built environment.  

This white paper endeavors to explain how the Building Industry; development, design, construction and operation of physical buildings & infrastructure can utilize and benefit from emerging technologies such as:  Internet of Things (IOTs), Digital Twins, Decentralized Energy Resources (DER), Decentralized Physical Infrastructure (DePIN), Artificial Intelligence (AI) and Distributed Ledger Blockchain Tech.  

1.2 Problems & Opportunities

1.2.1 Certainty

Blockchain Tokenization provides for higher levels of verifiability and provenance.  Helping to combat counterfeit building materials, faulty construction and negligent operation; blockchain will appeal to leasers, buyers, financiers and insurance.  In fact many financial services companies are already exploring and adopting blockchain technology, and where finance goes, so will other industries follow.

1.2.2 Productivity

Digital assets are a new frontier in property rights, producing new ways to adjust and align incentives, providing new ways to tackle the classic Principal/Agent problem.

Artificial Intelligence is emerging as a new labor pool that can shoulder tedious and repetitive tasks, freeing up humans to focus on the important and fun stuff.

1.2.3 Resiliency

Resiliency in a building project is generally only address through the uniform building codes (structural integrity), preventive maintenance and an insurance policy.  This is a good start, but considering the massive costs of buildings and valuable business activities occurring within buildings; we should looks for more opportunities for resiliency.    

IOT’s and Digital Twins can provide real-time monitoring of critical building systems issuing alerts and work orders as soon as problems arise, thus thwarting & limiting damages.  Decentralized Energy Resources (DER) like solar & geo-thermal integral to the project can keep a building (semi)operational when the power grid becomes compromised.  A robust Decentralized Physical Infrastructure (DePIN) network for data can provide a redundant system if the centralized legacy telecom/data providers become unavailable. 

1.2.4 Freedom  

As the built environment becomes increasingly composed of web-connected components and devices (IOTs), issues of privacy and freedom arise.  IOTs operated by a centralized authority, from private servers running closed-source software are operated under a framework outlined in the ‘Terms & Conditions’, which can be modified by the centralized authority at anytime.  

In many cases it would preferable that IOTs operate by clear and immutable rules that are in the building occupant’s or the building owner’s best interest.  Digital ‘Smart Contracts’ on the Blockchain can be rendered un-modifiable or modifiable under certain conditions; Smart Contracts such as these could operate IOTs in a way where the rules are clear, immutable and consistent.  

2.0 Project Description

An assemblage of data that provides clear instructions on how to construct and operate a building is a valuable asset; this could be tokenized on the blockchain as a Digital Asset.  As a stand alone legal entity; it’s ownership can be divided amongst different parties and it could enter into legal agreements.  Acknowledging the body and process of work as a legal asset and allowing contributors to enjoy ownership in this asset may spawn enthusiasm and open new use cases for how we design, build and operate the built environment. 

2.1 Decentraplex Project Type

A new Building type, initiated from and native to the blockchain, that may realize more capabilities for the built environment.  The Decentraplex, designed with tokenized digital models and project documentation, is a digital asset from its inception.  A physical building composed of IoT’s governed by immutable blockchain smart contracts may cultivate an Economy of Things (EoTs) and economies have a tendency to create productivity and prosperity.  

2.1.1 Digital Twins, Internet of Things & Economy of Things

1. Article on Digital Twin Technology by McKinsey & Company:  https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-digital-twin-technology
2. Article on Internet of Things (IoTs) from IBM:  https://www.ibm.com/think/topics/internet-of-things
3. Article on the Economy of Things by STL Partners: https://stlpartners.com/articles/enterprise/the-economy-of-things/

2.1.2 Energy Generation

Solar panels, photovoltaic glazing, geothermal in sub-grade are just a few energy generating technologies that can be incorporated into a building project.  Renewable energy generated at or near the place of consumption saves on transmission cost, and often least appreciated until it matters, adds to resiliency. 

Thus far complications in operations and load balancing of the electric grid have stymied power generation systems in buildings making them unfeasible.  New projects in Decentralized Generative Energy Networks (DeGEN) and Decentralized Energy Resources (DER), as well as new battery technology seek to overcome these impediments.  

Below are some links to exciting new projects in this space.  

1. Arkreen
2. Powerledger
3. Energy Web Token
4. Daylight Energy

2.1.3 Data Networks

As BDLT proliferates, the demand for increased decentralization of data nodes in order to increase the immutability of data as well resilience of the network will increase as well.  What better symbiotic relationship than a building that generates electricity having the option to use that electricity for data verification, node operations and proof of work crypto protocols when the electricity is not needed by building users or the Grid.  

2.1.4 Other Industries

2.2 $PLEX:  Digital Asset, Token(s) & Smart Contract(s)

‘A person who can acquire no property, can have no other interest but to eat as much, and to labour as little as possible…”  – Adam Smith, Wealth of Nations, 1776

Adam Smith’s words are as true now as they were 250 years ago.  

Tokenization of Real World Assets, such as buildings and business entities within which they operate provides a method for compensating employees, contributors and other participants with equity tokens in the project.  Employees and consultants become partial owners as they work on the project fostering a work culture of principals rather than agents.  

The PLEX token is a tokenized equity share inextricably linked to a building project, or building projects, via a smart contract that exists on a dispersed distribution on digital ledgers that are constantly updated via blockchain protocol.  

The physical building(s) itself will be inextricably linked to the smart contract and tokens because the building is composed of IoTs that take their operational instructions from the smart contract.  

2.2.1 The Project Specific PLEX token: P-PLEX

P-PLEX tokens specific to a project, for example ‘PLEX_123MainSt’, would derive its value from the specific project.  In the projects early phases of concept and design, the value would be speculative.  Once the project is complete and generating revenue, the tokens being equity stakes, would derive their value based on more traditional real estate valuations; cap rates, comps, net present value, and general supply & demand in the real estate asset market, etc… 

2.2.2 The Ecosystem Standard PLEX token: E-PLEX

All individual PLEX projects would contribute very small portion of their value to a liquidity pool to support a ecosystem standard PLEX token.  

2.2.3 Debt Tokens

There may be good reasons why individual projects would want some debt financing. Should debt financing be tokenized and how would that fit into this context?  TBD.

2.2.4 Custody of Tokens

A feature of cryptographic tokenization is the capacity to be bearer assets; similar to US dollars, individuals can take custody.  And, similar to dollars, I expect most people will elect to keep their digital assets in banks.  

2.3 AI Agent(s)

“As machines become increasingly capable, mental work will become more valuable and physical work less so, until eventually most people will be completely freed from drudgery and able to pursue their passions” – I.J. Good

AI agents can be useful as an assistant solving tedious problems, looking out for project blind spots & scope gaps, and shepherding the process ensuring that the design or construction teams do not deviate too far from the path.  Web3 AI agents live on the blockchain, and as such are owner bearer digital assets not dependent on a 3rd party intermediary.  Each Decentraplex project may have it’s own team of AI agents that may accompany the project for its lifespan.

Below is a list of the types of AI agents and the tasks that they may do.

2.3.1 Simple Reflex Agents:  

2.3.2 Model-Based Agents

2.3.3 Utility-Based Agents

2.3.4 Goal-Based Agents

2.3.5 Learning Agents

2.3.6 Hierarchical Agents

1. Perception
2. Learning
3. Reasoning & Decision Making
4. Natural Language Processing
5. Automation

Determine what tasks are appropriate for humans and what’s tasks are appropriate for AI.

Produce iterations 

A selection of AI Agents to Shepard the process 

Continuously searching for regulatory blindspots

Assisting searching for regulatory arbitrage  

Continuously search BIM models for clash detection

Offer bounties to AI Agents to discover problems. 

What management decisions can be delegated to AI 

2.4 Project Phases and Activities

2.4.1 Planning

2.4.2 Design

2.4.3 Bidding

2.4.4 Construction

2.4.5 Post Construction

2.6 Brand Brief

2.7 Metaverse

A shared digital venue, or metaverse, would be helpful.  As of now, a metaverse is beyond the scope of this white paper.  There are some metaverses in the works that may be good candidates for hosting this activity; most notably is Realio Networks Districts

[For sections 3.0, 4.0 and 5.0; I’m using Nathan van den Bosch’s Framework for developing a blockchain-based business model.  Please see a link to van den Bosch’s framework below:

View at Medium.com

3.0 Business Model Framework

3.1 Problem Statement

Real Estate Development; design, construction, asset management and operation involves a myriad of disparate participants working on concurrent, dynamic and unclear schedules over years and decades.  

Acknowledging this, is there any surprise the the industry is rife with waste, inefficiency, misallocation of capital and occasional fraud.  

Certainty, surety

Resiliency, access to power and data; being a part of a power and data network may prioritize a building.  Resources are often deployed where they’re needed most

3.1.1 Practical reality of building projects

3.1.2 Outline and describe the impact of the problem

3.1.3 Importance and urgency

3.1.4 Propose solution

3.1.5 Benefits of proposed solution

3.2 Impact Statement

3.2.1 Clear description of problem

3.2.2 Description and explanation of its impact

3.3 Value Proposition

3.3.1 Verifiability

3.3.2 Provenance

3.3.3 Liquidity

3.3.4 Expanded Capabilities

3.3.5 Expanded participant pool

3.3.6 Principal/Agent problem; ‘skin in the game’

3.3.7 Regulatory

3.4 Customer Segment (TAM) 

3.4.1 Real Estate Space Market; Demand for buildings.

First and foremost, occupancy is the reason to build a building.  

3.4.2 Real Estate Asset Market; Demand for yield.

3.4.3 Decentralized Energy Generation and Resources

3.4.4 Decentralized Data and Communications networks

4.0 Tokenomics Framework

“If it can be coded, it can be incentivized” -The TaoTemplar

Real Estate development is the physical manifestation of capital formation; financial, human, organizational, social & Physical capital.  Tokenization gives a process for capital to begin accruing measurable value at the commencement of a project, and this creates a new sets of leavers with which to optimize how we incentivize contribution and effort.  

4.1 Token Distribution (Token Supply)

4.1.1 Token Supply and Distribution

The Ecosystem Standard PLEX Tokens (E-PLEX) are minted based on the liquidity supplied by the project specific tokens.  There will be no maximum supply.

Project Specific PLEX Tokens (P-PLEX) is where token supply and value creation for the ecosystem begins.  There are a myriad of ways tokens are minted into existence; Token minting is both a tool for fundraising as well as a mechanism for incentivizing.  

1. Initial Coin Offering (ICO) and Token Sales:  The majority of P-PLEX tokens will come into existence for the purpose of financing the project.  
2. Work Tokens:  Tokens are minted as work is completed.  This could be the work of a financial analyst developing a pro forma, an architect producing construction documents or a roofer driving nails.  There’s a myriad of ways this can be achieved.  
3. Partnership Rewards:
4. Community & Governance Rewards:
5. Bug & Design Defect Bounty Programs:
6. Mining:
7. Liquidity Mining:
8. Staking Rewards:
9. Airdrops:
10. Burn-and-Mint Equilibrium (BME):  

4.1.2 Token Allocation

1. Core Development Team
2. Private/Public Sale
3. Project Development
4. Ecosystem Development
5. Community & Airdrops
6. Reserve & Treasury

4.2 Business Scope (Token Demand)

Tokenized BDLT projects blur the lines between token supply and demand; contributors are investors and everyone’s an owner. 

4.2.1 Value Proposition

1. Provenance
2. Liquidity
3. Immutable ownership, Nakamoto Coefficient
4. Tokenomic Resonance
5. Flip the Script:  

4.2.2 Market Opportunities

The ability to seek out pools of Capital similar to MSTR

Quadratic Funding

4.2.3 Supporting Research

4.2.4 Primary Business Model

4.2.5 Revenue Streams

1. Rents
2. Energy 
3. Data
4. Economy of Things

4.3 Token Price Stability

4.3.1 Inflationary or Deflationary

4.3.2 Stable coins & Token Pegging

4.3.3 Token Actions

4.3.4 Token Functions

4.3.5 Network Valuation Models:

Market Cap

Network Value to Transactions Ratio (NVT)

Active Address Count

Total Value Locked (TVL)

https://www.nydig.com/learn/exploring-bitcoin-valuation-methodologies

View at Medium.com

https://www.altrady.com/crypto-trading/fundamental-analysis/compare-cryptocurrencies-valuation-models

“Eventually what we’re going to see is the highly regulated institutions and the DeFi community merge into a single Internet of Contracts”  -Sergey Nazarov, Chainlink

4.4 Governance Model

4.4.1 Blockchain Governance Model

4.4.2 Scope of Governance

4.4.3 Governance Operating Model

4.4.4 Compliance

Subnet 

Validator 

Miner

4.5 Decentralized Project Initiation Framework

The Decentralized Project Initiation Framework describes a method for anyone to suggest and initiate a building project.  Many, if not most Decentraplex projects will likely have professional sponsorship and skip the three steps below, but why should the people at the top have a monopoly on having the ‘Big Idea’.  

4.5.1 Conception

The initial idea, as simple as a napkin sketch minted as an NFT on a Web3 geo-located metaverse platform such as Realio Districts.  Similar to sperm fertilizing an egg, the vast majority of these low-cost/low-effort ideas will go nowhere, but a select few may become something great.  

4.5.2 Incubation

Once a liquidity threshold is achieved, incubation can begin.  Activity and enthusiasm build on geo-located metaverse project site, concurrent and complimentary proposals are made and minted as NFTs.  A DAO is formed so that participants have an organizational framework.  

Legal, physical and market aspects of the project begin to be addressed during this phase. 

The Liquidity Pool is transformed into an Escrow Pool, a smart contract is drafted for investors and participants.

4.5.3 Birth  

Once a developer, lured by the merits and enthusiasm for the project, as well as the size of the escrow pool, contracts with the DAO; the project is born.  The Developer and the DAO take on a GP/LP relationship.  The Escrow Pool becomes an initial Working Capital fund, and additional funds are raised, both equity and debt, via token issuance.

5.0 Behavioral Model Framework

Narratives are the substrate of human activity.  Narratives give order, the substrate or organizing human behavior.  

Game Theory and Applied Game Theory

Byzantine Generals Problem

Principal/Agent Problem

Cognitive Bias

The creation of a intellectual digital asset around which enterprise can happen

Vesting Schedules that extend for the life of the building

5.1 Network Personas

5.2 Network Empathy Maps

6.0 Partners

6.1 Bittensor

Realio Districts

Propy 

Origin Trail

Helium

Abeeway

Samsara  Leader in Industrial IOTs

Nividia Omniverse

Chainlink

VeChain