The founder of adult entertainment payment provider SpankChain, Ameen Soleimani, has put forward an idea for an Ethereum-backed stablecoin that comes with a minimalist governance structure. Soleimani thinks a new schema is necessary to overcome centralized points of failures in existing stablecoins, like MakerDAO—which builds DAI, an Ethereum-based stablecoin that is supposedly decentralized.
“MakerDAO currently has at least four custodians, each of whom can, at will, steal 100% of the ETH collateral deposited in MakerDAO, also print a gajillion DAI, and then use that DAI to steal 100% of the ETH liquidity offered for the ETH/DAI pair across all decentralized exchanges,” wrote Soleimani.
SpankChain CEO Ameen Soleimani, and friends. Image: SpankChain.
“The custodians, the Maker Foundation, a16z, PolyChain, and Dragonfly, could execute this entire heist in a single atomic Ethereum transaction, before anyone has a chance to respond,” he added.
Essentially his point is that parts of the MakerDAO system are centralized, and that they are so centralized, that all of its token holders—and Ethereum holders—and subject to the whims of the few institutions that are in charge of it.
In a blog post yesterday, he laid out the details of MetaCoin, a new design for a stablecoin—not to be confused with an existing token with the same name—that makes it more difficult for those governing the coin to manipulate the price or supply of the tokens.
Thus, “The key bet for MetaCoin is that social scalability comes from trust-minimization, which in turn comes from eliminating the role of governance in maintaining the system,” he said.
Soleimani’s a little unsure any of this would work, but he believes that new thinking is necessary to address some of the risks posed by existing stablecoins, like MakerDao.
While his out-of-the-box thinking can seem disruptive, in the past he managed to raise $1 million for a project based on the Canaanite God of child sacrifice, Moloch. A project, which was so successful it led to the rebirth of decentralized autonomous organizations—not seen since 2016. Can he do it again?
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