Vitalik Buterin's Ambitious Blueprint for an Utopic City

Ethereum co-founder Vitalik Buterin recently unveiled an innovative blueprint for a city that would be built as a hybrid, integrating the principles of democracy, capitalism, and decentralisation.

His vision was shared during a discussion on Farcaster, his preferred social media platform instead of X (formerly known as Twitter), in response to a post that questioned whether cities should be for-profit entities or serve as public goods.

Profit-Driven Cities

The discussion centered around the concept of "for-profit cities," which conjures up images of "Walmartopia" or "Teslaville," but in essence, it would mean treating city governance as a business venture.

In response to the question of whether cities should operate as for-profit entities or as public goods, Buterin proposed a hybrid model:

“Ideally a hybrid model (note: we have a hybrid model today, because of land ownership; I'm going to argue that we should have more opportunities for individuals to make profit from shares in the city, *and* weaker property rights in land!)”

In Buterin's ideal scenario, citizens would have increased access to "assets" that provide them with "governance" rights, while landowners would experience a reduction in their holdings and an increase in taxes.

He explained:

“The argument is that this creates better incentive alignment with the whole city's success, and land value taxes in particular give government the best incentives to affect what they can change (local public goods, which affect land value), while leaving the full value of anything built on the land in the hands of the local owner, who is the one who can affect that.”

Buterin's vision is reminiscent of a decentralised autonomous organization (DAO) structure, combined with taxation and profit incentives.

From a political theory perspective, this approach would effectively socialise the democratic process while upholding a capitalist framework.

Is a Hybrid City of For-Profit & Non-Profit Best?

The decision between a for-profit, nonprofit, or hybrid model for cities largely depends on the potential sources of funding and the specific activities of the city.

Hybrid models can be beneficial as they can leverage the strengths of both for-profit and nonprofit entities.

This approach might be particularly advantageous for cities, as it could potentially balance the need for financial sustainability with the goal of serving public interests.

In short, hybrid models could offer a balanced approach that might be more suitable for complex urban environments.