JPJA (2014) – Book NFT & DeFi Pioneer

JPJA is arguably the very first 1/N NFT and possibly the first ever DeFi contract. One hundred tokens were issued with a promise of a future dividend based on the verifiable result of an underlying asset.

I also made JPGOLD and the JPBULL/JPBEAR bitcoin options around the same time. Their stories are further down this article.

Timeline
On 27 June 2014 I tokenized an eBook and promised a future dividend based on its revenues. Here’s the announcement on Bitcointalk:

On 28 June 2014 the token supply was locked at 100 and the description updated to: “1 share = 1 % of eBook tips. See JPJA.net”.

On 27 December 2014 all holders of JPJA received the promised dividend.

The eBook

Project Explained
I had spent the past year obsessing about bitcoin and decided writing a book would be a good way to structure my thoughts. Tokenizing the book would prove that:

“[B]itcoin is more than just a payment system. It is a financial platform of endless opportunities”.

More specifically, it struck me that the little man could now mint tokens like companies issue shares. These tokens could even mimic an IPO and be traded on a decentralized exchange. All for pennies! Compare this to the hundreds of thousands of dollars an IPO and stock market listing would cost in the old world of finance.

JPJA was the experiment which proved the point. Through a defined model of ownership, revenue and distribution – fully verifiable on the blockchain – a new financial reality was born.

After I made the announcement I listed some tokens on the decentralized exchange. At the same time I did not want to beg for money, so I put a symbolic price of $0.30.

I did make a few sales;

I am happy a few forum users joined the experiment, and especially that one managed to buy with BTC despite a horrible Counterwallet UX at the time. If you are interested, you can find some frustrated posts in the old bitcointalk thread. Today a similar sell can be done painlessly with a dispenser contract.

In total there were 100 locked and indivisible JPJA tokens;

  • 15 sold on the DEX
  • 11 gifted away to three separate addresses
  • 74 held by me until 2021

The second part of the experiment was to raise some revenue. I used a model to illustrate how bitcoin tipping could stimulate online content creation. I didn’t expect much tip, but hoped for a few dollars. Since the tip address was public, anyone could verify the amount received.

The third part was to pay out the dividend. As promised, all tip revenues were paid out to the token holders. This was super easy since Counterparty tokens are held by Bitcoin addresses. I simply took the list of JPJA holders and paid them proportionally in a single bitcoin transaction.

Still, today, this is a mostly ignored but extremely useful feature of Counterparty tokens.

Principle Proved
I held a micro scale IPO. The JPJA shares were traded on a decentralized stock exchange. The investors got their returns and everything is verifiable due to the blockchain’s transparency.

First Ever DeFi Contract?
One could argue that Counterparty itself is a set of DeFi contracts. In this sense, of course, JPJA is not first. This aside, there were also some earlier tokens linked to individual artists but I think neither of them specified what the link really involved. JPJA is likely the first with defined conditions.

First Ever ICO?
I think JPJA could be classified as an ICO although I want to stress that I only raised symbolic amounts. Mastercoin held a token offering a year earlier, in 2013, so JPJA is certainly not the first. It is likely the first Book ICO though.

First Ever NFT?
OLGA, also by me, was issued a few weeks earlier and is considered the first 1/1 NFT – as in both “non-fungible” and “token”.

First Ever 1/N NFT?
JPGOLD, with a supply of 1000, is the first use of the scarce 1/N model on Counterparty – and most likely on any token standard. I issued JPGOLD the day before OLGA and a few weeks prior to JPJA.

JPGOLD didn’t really serve a purpose though, so JPJA may be considered first 1/N NFT depending on definition. In the next section will I describe JPGOLD in detail so you can make up your own mind.

Conclusion
JPJA is a very early pioneer of DeFi. It proved that Bitcoin could level the playing field of finance. Even now, in 2022, I believe JPJA is ahead of its time. I joined Counterparty with a hope, and belief, that crypto would empower the little man. I think we’re still early on the journey.

You can authenticate the ebook pdf against Internet Archive’s copy:
https://web.archive.org/web/20141022013556/http://jpja.net/2014/06/ebook-the-economics-of-bitcoin/
Sha256:
8031025a667824a188dd5479ca5cb20c5306be06ed01875f7bcc11ecb48251be

JPGOLD (June 2014)

Here’s my original note from 2014:

This is the first asset I ever minted. Although it didn’t serve a purpose beyond “just for fun” and only hinted towards gold, it turns out to be the first use of the scarce 1/N model* on Counterparty. By scarce I mean a token supply low enough to be a potential collectible.

This scarce 1/N model has been used thousands of times since, including for Spells of Genesis, Rare Pepe and Curio Cards. Thus, JPGOLD stands out as the first token with all the essential economic parameters set right;

  • Indivisible tokens, meaning you can only collect entire tokens – not fractions as with cryptocurrencies.
  • Low enough supply to create scarcity. SOG typically issued 300–2000, but the highest was 3000.
  • Locked supply to guarantee scarcity.

Sure, you may find collectibles with earlier initial issuance. But all of these have had some economic parameters changed later, meaning been locked and/or had tokens destroyed to fit the JPGOLD model.

As far as I can tell, JPGOLD is the first 1/N token regardless of token platform.

Screenshot from Value-of-XCP.pdf, p 18.
File hash embedded in a Bitcoin transaction on Oct 29, 2014.
Sha256: 2bca95eb91e6be1e9ae5b23de5f8373952987f0cdebbd7f6b0d484821951f486

* From the 1147 assets that had already been issued, none had a low, locked supply of indivisible tokens. None were even close. The lowest by then was 100,000 tokens – one hundred times more!

JPBULL & JPBEAR (September 2014)

JPBULL (1/7) and JPBEAR (1/7) are possibly the first ever tokenized bitcoin derivatives.

I auctioned off call and put options against the Bitcoin price. At expiry Bitcoin was below the strike price and JPBEAR holders received a payout.

Everything is documented in the file Value-of-XCP.pdf on pages 8-11. This is the same notarized pdf as for JPGOLD.

I concluded that blockchain makes fully transparent contracts possible, yet trading on the DEX is too slow for a real life application.

Note
The JPBULL and JPBEAR tokens are divisible. The original supply of 7 was locked in 2021.

CPNEWS (September 2014)

Counterparty News was a blog with a token rewards program. Unfortunately, I failed to attract participants.

I consider this the least important of the 2014 financial experiments. Read about it here.

Proof of Prediction

My ‘Proof of Prediction’ experiment was not tokenized (it wouldn’t make sense to do so) but I mention it here as it was done in the same ‘pioneering peer-to-peer finance’ spirit as the before mentioned experiments.

The background is explained on page 6 of Value-of-XCP.pdf.

“There’s no shortage of persons who claim they were able to predict a stock market move. There’s also plenty of academics and “experts” who arrogantly (and ignorantly) state that this is impossible. In reality it is possible to make a forecast with some degree of accuracy. The problem is to prove that you really did make the predictions that you claim to have made.”

I can indeed today prove that my rhodium prediction made a whopping 700% return. At the same time it’s impossible to hide some other embarrassing recommendations. This again shows the transparency of blockchain. I cannot cherry-pick winners without exposing the losers.

You can find all these reports in JP_VINTAGE_TOKENS.zip.

Note
My Bitcointalk profile is hacked. Please ignore whatever project it advertises.

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