The share economy
A currency has to be honest about what stands behind it.
Share Credits are created out of objects and destroyed on use. That only stays true if the arithmetic is right. Here is the arithmetic, including the part that constrains what we can offer you.
Credits are minted by objects, not by us
Nothing creates a Share Credit except an item entering the network. When you list a coffee table, we appraise it and credits equal to its Share Value come into existence. There is no other faucet — no purchase, no promotion, no signing bonus, no investor round that quietly prints some.
Market price
What the item actually sells for used, right now, from live listings — not what it cost new.
× Condition
Honest wear, priced. Like-new keeps 100%; fair keeps 68%.
× Confidence
How sure the appraisal is. A blurry photo of an unbranded object gets less, because we are guessing.
× Liquidity
How quickly something like this finds a neighbour. The one people find surprising.
Why a kayak is worth less than a drill
Two items can carry the same price on eBay and be worth very different amounts here. The credits you get are spendable immediately, but the item behind them stays in your home until somebody wants it. Something that sits for four months has credits circulating against it for four months with nothing available to redeem them.
So we price that in at the start rather than discovering it later. It is not a penalty. It is the difference between a number we can honour and a number we cannot.
Moves fast
A current-model phone, a popular stroller, a cordless drill.
Usually claimed within a week
80%
Moves steadily
A dining table, a decent bike, a mixer.
Usually claimed in 2–4 weeks
68%
Moves slowly
A kayak in February, a treadmill, a niche instrument.
Can take a couple of months
52%
The reason you do not get all of it up front
This is the honest part, and most of our competitors have never had to say it out loud, because they only pay you after something sells. We pay you before. That is the entire product, and it is also the entire risk.
Credits get created twice against one item: some of the appraisal the moment you list it, the rest when it is claimed. But only claimed items put a real object into somebody’s hands. Every listing that never clears has left credits circulating with nothing behind them. Move the sliders and watch what that does.
The rest unlocks only if the item is claimed.
ThredUp, which physically inspects every item, clears 43% at 30 days and 69% at 90.
Try these
For every 100 of credits created, goods actually delivered are worth
$82
Workable
A shortfall of 18%, which is the size the liquidity haircut and the credit sink below are built to absorb. If it stops closing, advances tighten automatically at 115% coverage and stop at 105%.
backing = 1 ÷ ( 50% ÷ 69% + 50% )
Set the front-load to 100% and there is no setting of the clearance rate — short of every single listing finding a home — that produces a currency worth what it says. That is why the advance is capped at 50% for everybody, including our most trusted members. Trust earns you a smaller haircut, not a bigger advance: the reward lever moves, the solvency lever does not.
New
25%
up front
10% deeper haircut while we learn how your listings clear.
Established
40%
up front
Standard haircut on every appraisal.
Trusted
50%
up front
5% shallower haircut — a higher Share Value on the same item.
What destroys credits
A currency with a faucet and no drain inflates until it is worthless, and the people holding it at the end are the ones who trusted it most. Ithaca HOURS, the best-known American local currency, ran for two decades without a real sink; by the end a single co-op held about a third of the money supply and started refusing it.
Destroys credits
The credit fee, on every claim
The claimant pays 4% of the item's Share Value in credits on top of the price. Those credits are not paid to anyone — they are deleted. It is shown as its own line before you confirm, never folded into the price.
Specified and priced, not yet switched on. Until it is, the haircut below is doing this work alone.
Destroys credits
The liquidity haircut, at appraisal
An item that may take months to move is appraised well below its market price, so fewer credits exist against it from the start. Credits that are never created never have to be honoured.
Does not destroy credits
Spending credits
Not a sink. Buying something moves credits from your wallet to a neighbour's — the total is unchanged. This is the mistake that has ended most community currencies, and it is worth naming plainly.
The 4% credit fee is the one number we expect to adjust over time, and we will publish it when we do. It is the network’s monetary policy in a single dial — the only lever that removes credits without taking anything from anyone who has already earned them.
The number we publish, whether or not it flatters us
Coverage is the value of every item currently committed to the network, divided by every credit currently outstanding. It answers the only question that matters about a credit: if everyone tried to spend at once, is there anything there?
We target 125% rather than 100%, because 100% means every credit is spendable only if every listed item clears — and nothing clears entirely. The buffer is the point.
Coverage right now
143%
$6.42M committed against 4.48M outstanding
- 125% and aboveBusiness as usual.
- Below 115%Advances tighten across every tier, automatically.
- Below 105%We stop issuing advances entirely until it recovers. Credits already in your wallet are unaffected.
Four things we have deliberately given up
Each of these would make ShareHouse easier to sell and worse to hold. They are constraints on us, written down so they are harder to quietly reverse.
Credits cannot be bought with dollars.
The only way to hold credits is to put a real object into the network. That is what keeps each one attached to something.
Credits cannot be cashed out.
Not to a card, not to a bank, not at a discount. A withdrawal option would make this a lending product aimed at people who are short on money.
Credits cannot be sent to another member.
Transferability is what turns a closed loop into a currency, and a currency into something people manipulate. It stays off until the fraud controls are ready for it.
Credits do not earn interest and never change in value.
Always S$1 to one dollar of Share Value. There is nothing to speculate on, which is the point.
The mechanics of listing, claiming and handing off are on How ShareHouse works. The full modelling, with sources, is in the business plan.
A better way to own.
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