Gabriel Delgado: Próspera Update

Timothy Allen speaks with Gabriel Delgado, co-founder and Chief Development Officer of Próspera, recorded at Zuzalu – Vitalik Buterin’s experimental two-month pop-up city in Montenegro — in May 2023.

This was the first of two long-form conversations with Gabe on the show. The second, recorded three years later from inside Próspera itself, covers what happened next – and everything Gabe was promising in this conversation now exists.

At the time of recording, Próspera had roughly a thousand residents and three hundred registered companies, but the political situation was bleak. The socialist government of Xiomara Castro had declared the destruction of the ZEDE framework its top political priority, using the project as what Gabe calls a “piñata” – a distraction device beaten publicly whenever the administration needed to redirect attention from domestic problems. Gabe put the odds of reaching an agreement with the government at ten percent.

He explains why they chose to fight anyway. Gabe’s journey to Próspera involved four attempts at governance reform over more than a decade: one failed initiative in Guatemala, two in Honduras that collapsed before launch (including one where they had land, a master plan, money down, and a signed MOU with the government), and finally Próspera, which he and co-founder Erick Brimen launched in 2017 under the ZEDE organic law. He invokes Tolkien’s concept of “the long defeat” – the idea that you keep fighting even when you believe you’re losing, because it’s the right thing to do. That was the mood in 2023.

On the ground, the conversation provides a detailed snapshot of early-stage city building: the Beta building fully operational and out of space, the 82-unit Duna tower nearing completion, the Circular Factory (a robotic cross-laminated timber workshop that cuts building components to be assembled on-site), plans for drone delivery to the tower rooftop via Ecuadorian startup Area Loop, and early traction in the biomedical and longevity space.

Gabe also lays out the legal position as it stood in 2023. Honduras Próspera Inc., registered in Delaware, had activated the arbitration clauses in the US-Honduras bilateral treaty CAFTA, filing a case valued at over ten billion dollars – a figure derived from the 50-year legal stability agreement and the projected future value of the investment. He describes a government unwilling to meet, a diplomatic channel that had produced nothing in a year of attempts, and a team that had decided to lean into its legal protections rather than retreat.

The most important passage is the core hypothesis behind the entire project: if Próspera can become the zero-to-one proof of concept – a functioning, prosperous special economic zone with private governance – then other countries in the region will have no choice but to respond through competition. Rather than reforming from within systems where incentives are hopelessly misaligned, you build the working example next door and let competitive pressure do the rest.

TIMESTAMPS:

00:29 – Introduction and context from Zuzalu, Montenegro
02:39 – Start of conversation
03:51 – The ideological media onslaught against Próspera
07:10 – Gabe’s background: four attempts at governance reform across Guatemala and Honduras
12:38 – The core hypothesis: succeed as zero-to-one, then other countries replicate
17:47 – The Circular Factory: robotic cross-laminated timber construction
23:13 – Drone delivery to the rooftop of Duna tower
28:31 – From zero buildings to four in three years
31:12 – The hostile relationship with the Castro government
36:19 – CAFTA arbitration: what happens if Honduras breaks the treaty
42:00 – Gabe’s scenarios: 10% chance of agreement, waiting out the government, or a new election
46:34 – Biomedical traction, longevity treatments, and the Builders Network

Enjoy the conversation.