Regenerative Cryptoeconomics and the Internet of Mobility
Capitalism brought a level of global prosperity improving many metrics of quality of life, increasing access to basic services like energy, food and transportation, creating new jobs and unleashing a century long wave of innovation in what Schumpeter referred to as “creative destruction”.
Yet in recent decades our economic system embraced by so many “democratic” countries, has shown serious cracks. Income inequality and climate change have emerged as nearly intractable negative externalities of capitalism gone wrong.
In 2011, along with the famed environmentalist, Hunter Lovins, I published my first book: Climate Capitalism. As implied by the name, at that point in time I believed deeply that we would solve climate change through capitalism as the growing evidence of ways to profit from accelerating to a low carbon economy across all main industries: construction, energy, transportation, food, etc. was emerging around the globe. Yet several years later, I published a book entitled: Post-Capitalist Entrepreneurship with a recognition that capitalism as it is currently practiced in most parts of the world, was failing us all.
Instead, in Post-Capitalist Entrepreneurship, I provided evidence of new technology-enabled approaches to the creation of public goods and hybrid business models emerging such as platform cooperatives and blockchain-based decentralized autonomous organisations (DAOs).
It is increasingly obvious to a growing number of economists, entrepreneurs, investors and the public at large, that we need a reset. I believe that reset is going to be driven by blockchain technology for good.
Thankfully, this movement now has a voice and maybe even a commonly accepted term to describe it.
Regenerative Cryptoeconomics
The emerging leading voice for regenerative cryptoeconomics is Kevin Owocki a founder of Gitcoin, a pioneer in leveraging Web3 to accelerate the growth of open source and public goods creation.
Kevin has just launched a new podcast called Green Pill supported by Bankless which will exclusively focus on regenerative cryptoeconomics. The goal of the movement is to expose the ways blockchain tech can be used to solve, not exacerbate, the negative externalities in capitalism. Kevin has also published a book on the topic and is seeking other ways to grow the movement.
In the past month, I published a post announcing that my company, Iomob, is returning to its roots and our vision from day one when we incorporated in 2018, to decentralize our tech stack via the Internet of Mobility protocol. One of the early pioneers in the impact investing movement, Kevindoylejones wrote me a succinct question following that post: “so what?”
As that original post was just an announcement, it contained little context to why it matters or what impact decentralizing Iomob could have on the world.
The rest of this post will apply the concept of regenerative cryptoeconomics to Iomob’s plans to decentralize and tokenize in 2022 and beyond.
A Case Study in Regenerative Economics: Decentralized Internet of Mobility
The 3 cofounders of Iomob, Josep Sanjuas, Victor Lopez and I first started forming the thesis for Iomob in 2017 and by April 2018, we had incorporated the company. The intention was to build a decentralized Internet of Mobility (IoM) protocol that would:
“allow any user of any interface connected to the IoM to discover, route, book and pay for any mobility service connected to the IoM”
While we raised initial funding for the protocol, it became clear to us in 2018 that the markets (crypto and transportation) were not ready for scaling a decentralized approach to solving the coordination problem the industry is facing.
So we decided to build a more centralized stack, engage with key public and private actors in the ecosystem and commercialize as a more traditional tech startup being a multi-sided platform. We have achieved those phases and are now decentralizing in 2022.
So, let’s answer Kevin’s question in the context of Regenerative Cryptoeconomics.
So what? Why does a decentralized IoM matter?
Many of us who have been in sustainability for a long time have been trained to think about sustainability in the context of the “triple bottom line” which highlights the idea of optimizing economic activity beyond profit and instead for ecological, social and economic impact.
Most of the sustainability world has moved beyond this rather simple framing to more complex framing of the necessity to go beyond short-term profit maximization. Newer frameworks have emerged such as: triple top line, post-capitalism, ESG and others. Yet for the purpose of simplicity, I will use the three elements to provide an introduction to what Iomob aspires to achieve through our decentralization plan.
- Ecological benefit of decentralizing the IoM
The underlying reason to tackle the coordination problem found today in our global, fragmented mobility ecosystem is to make it easier to accelerate modal shift from private car dependence (especially with ICE engines) and towards more sustainable, shared multimodal mobility between cities and within them. We were lucky enough to host a workshop with two major European impact funds: Creas Impact Fund and the newly launched World Fund. The goal of the workshop was specifically to create a methodology for measuring the potential emissions reductions which could be achieved if the whole world adopted technology like that of Iomob.
The result of this work was the Total Avoidable Emissions (TAE) infographic for multimodality.
The concept behind the TAE model is to assess the potential carbon emissions that could be avoided if the whole world adopted similar technology, not if the whole world adopted Iomob in this case.
As a centralized company, Iomob could never achieve more than probably 10% of the reductions we estimated, i.e. maybe 130 million tonnes. That would still be a great achievement. But, those of us who have been pursuing the low carbon economy for more than a decade all realize that the pace of change is just not fast enough and we are all suffering the consequences of inaction.
So what about a decentralized approach to Iomob? Well, if Iomob is able to turn our proprietary code base into a quasi public good (token gated), and if the global community were to embrace the IOM Protocol, than the global community leveraging the IoM could make its ambition to contribute to the protocol and to grow its adoption at a global scale meaning we could help accelerate modal shift at scale to capture a much higher % of the total potential TAE.
2. Social Impact of decentralizing the IoM
By addressing information asymmetries in a currently broken and fragmented global mobility marketplace, a decentralized IoM can enable local and regional players (who are way more connected to their communities and the opportunities for better coordination) can help help more people from all socioeconomic levels gain access to multimodal mobility solutions which not only reduce their emissions but can transform quality of life and access to education, culture and employment opportunities.
Similarly, localized approaches to subsidizing mobility for lower income or other disadvantaged populations, such as fare capping systems, can be embedded into the protocol by local node operators in partnership with public and private sponsors making inclusive mobility accessible to all.
3. Economic Impact of decentralizing the IoM
By default, a centralized company like Iomob, if it scales and grows, will reap economic benefits for its founders and shareholders and have some trickle down benefits to the mobility ecosystem that we unite. But a decentralized IoM creates a network economy whereby all tokenholders are co-owners of the protocol with governance rights to boot. This means mobility users, mobility service providers and others who obtain IoM tokens can benefit from the network effect achieved.
Furthermore, another less obvious and equally exciting opportunity can emerge for inclusion. Small and medium-sized enterprises, including startups, can gain permissionless access to announce their vehicles and services to the IoM allowing for a more equal playing field.
Imagine, for example a founder, let’s call her Wendy. She has discovered this cool new hybrid vehicle/bike built in Vancouver called Veemo and wants to see if residents in Cape Town as they head into rainy season would be interested in using this as a shared vehicle. Wendy has saved up enough to buy 10 vehicles to deploy across a few neighborhoods of Cape Town. She does not have budget yet to build out web and mobile interfaces nor to spend a lot of money trying to acquire customers. And besides it seems a waste of money for Wendy to spend resources on this before she had validated product/market fit.
In a decentralized IoM, we can expect there is a node operator in South Africa who has deployed the IoM architecture and managed to connect a healthy amount of supply and demand partners. The local transit agency, TDA, is leveraging IoM to get more residents and visitors to embrace multimodal mobility, the largest cricket club uses IoM for their fans to get to and from the stadium, some of the largest employers do too.
Now, Wendy can connect her 10 Veemos to IoM and gain immediate exposure to the millions of users connected to the IoM through the local demand partners. Wendy can use this “app-less” connectivity to IoM to determine product market fit and validate the demand without spending her own money on digital interfaces or customer acquisition costs.
Conclusion
Regenerative Cryptoeconomics is a framework for thinking about how decentralization and tokenization can be a powerful force in mitigating the growing income inequality and climate crisis that has been exacerbated by perverse incentives inherent in web 2 and some interpretations of capitalism around the globe.
About the Author
Boyd Cohen is the CEO and Co-founder of Iomob, a global mobility on demand platform for enterprise. Since obtaining his Ph.D. in strategy and entrepreneurship at the University of Colorado in 2001, he spent the past two decades focused on accelerating the path to a low-carbon sustainable economy. This included publishing 3 books, multiple peer reviewed articles and starting a handful of ventures in the smart cities and sustainability arena. At Iomob, Boyd leads a growing team of mobility and technology experts to deploy the world’s first Mobility on Demand platform for enterprise. Early clients have spanned multiple continents including Europe, Asia and North America.
