Case Details

This case studies the history of the Bunz barter economy. Participants of the Bunz community were primarily young millennial adults in Toronto who arranged to trade second-hand items such as clothing, accessories, plants, and groceries through a mobile app platform. The community’s founder forbade cash transactions for ideological reasons, so the platform’s roughly ten thousand daily active users, who were largely strangers meeting bilaterally in a decentralized manner, initially had to barter.

To facilitate trade, the Bunz platform introduced a digital token, named BTZ, that could be transferred among users and redeemed at designated local stores for retail goods at a fixed exchange rate. The platform then dramatically expanded token supply through direct deposits to user wallets. These changes increased transaction volume in the platform. When faced with dwindling reserves, however, the platform reduced the scope of its redemption program. Eventually, the platform halted redemption altogether, thereby transforming BTZ from credit money into an intrinsically worthless fiat money. When redemption was halted, users became less willing to accept the token. This eventually led to BTZ-mediated exchange to disappear altogether.