Krause House

Creation of House Protocol Labs Inc.

Author Name: Commodore

---

Flex & I have been thinking a lot about collective ownership through the lens of remixing access, equity, & governance for the past 3 years. We made incredible progress with owners from the NBA, EPL, & dozens of sports/leagues. The vision resonates with owners, fans, & leagues, the challenge has been the structure in how to do it.

The Ball Hogs experiment has been a tremendous success. Krause House acquired effectively 40% of the club at a $1.2m valuation. Since then, the BIG3 recently announced the 4th sale of a team — with estimated valuations around $10m. We’ve watched the core thesis of a fan (Bayesian) going from an outsider to sitting on-the-bench weekly as an assistant coach, due to a human coordination engine called Krause House DAO. Streaming numbers on X are massive, the league is growing rapidly.

We’ve seen the progress Lewk has been able to make with Krause House Capital & also the material challenges faced along the way. Insiders in sports ownership continue to be blown away with how much progress we’ve made but matching capital with opportunities continues to be a challenge.

Flex & I have been off-stream for all of 2024 thinking about what comes next for collective fan ownership. We’ve been kicking around an idea to tackle all of these opportunities & problems with one elegant solution:

We want to build the reserve currency of sports & want to call it House Protocol.

Leagues & owners need a simple structure they’re familiar with, the best option is a trust. But instead of creating one-off trusts with traditional ownership requirements, we believe the opportunity is to build treasury-backed protocol to acquire cultural assets including sports clubs. We think of it like the reserve currency for culture, empowering fans with exclusive access and governance.

We see a future where Krause House DAO is a human coordination layer for sports clubs & House Protocol is a capital coordination layer.

What is this proposal about?

We think both layers are important to make this a reality, but Flex & I need to establish an entity that will require outside funding (that KH cannot afford… nor should it) to build the idea.

As an example, Krause House could benefit from the creation of House Protocol by acquiring the majority position (>51%) of the Ball Hogs from the BIG3 — without using treasury funds. This would protect KH’s minority position + secure governance of the Ball Hogs. If Krause House were successful at generating interest in the Ball Hogs ownership through the protocol, it could use the fees to both acquire ownership & fund fan engagement experiences we’d like to pursue as a collective.

We’d love to aspire to build a world where people like Uncle Jon, Bayesian Baller, & many more can come to Krause House and earn incredible fan experiences across a rapidly growing sports portfolio facilitated by the DeFi mechanisms of House Protocol. We see a future where Krause House DAO becomes the home of unique fan experiences around the world.

What’s this proposal outlining?

• KH grants the creation of House Protocol Labs Inc. (HPL), a development company to build House Protocol & a financial vehicle to take external funding.
• KH invokes HPL to build, launch, and maintain House Protocol.

Covenants

• House Protocol does not request any funds of any kind from KH.
• House Protocol will use KH governance as a nomination & approval flow of House Protocol as per protocol parameters, until eventual independent governance.
• KH acknowledges zero claims of IP for the name & concept of House Protocol.
• KH can seek to use House Protocol to attempt to acquire the Ball Hogs majority position.