At Bitcoin Unleashed in Miami, Freehold co-founder and CityCoins Community Lead Patrick Stanley took the stage to share the history and potential future for CityCoins, outlining ways the community has proposed to deal with current challenges while continuing to push the protocol forward. (Based on an essay on his personal site, aptly titled CityCoins 2.0., you can read a summary of Patrick's community-sourced strategy below.)
Meanwhile, as CityCoiners return from their adventures in Miami, the community vote to upgrade the CityCoins protocol begins. If you haven’t voted yet, you can find context and instructions at the top of our last blog post.
How CityCoins began
In April of 2021 the initial spark for CityCoins arose during, of all things, a Twitter Spaces. Stacks community members were discussing the protocol’s Proof of Transfer (PoX) mechanism when someone proposed that a developer fund could be a receiving entity for the transferred tokens in a PoX system.
The idea expanded from there. What if the dev fund was actually a local government? What if users paid an opt-in tax to support the protocol out of opportunity rather than out of obligation?
CityCoins was born.
CityCoins launched its first CityCoin, MiamiCoin (MIA), in September 2021. The city soon formally accepted donations from the protocol, and not long after withdrew $5.2M that it put towards rent relief.
In just a few months, Miami’s wallet grew to approximately $25M. Before the year came to a close, Mayor Francis Suarez announced the city would be sharing the BTC rewards generated by stacking its STX tokens with residents. To date, the city has earned an additional $400,000 in Bitcoin from stacking the city wallet’s STX alone, money that will be sent directly to citizens later this year. What better way to educate people on Bitcoin and CityCoins than by onboarding an entire city firsthand, all at once?
The second CityCoin, New York’s NYCCoin, grew fast as well. The token arrived in November 2021, on the first day in office of newly-elected Mayor Eric Adams. Within a month the protocol had generated almost $30M.
Where CityCoins are going
The rise of CityCoins has been brilliant, but not without challenges. Every day the community works to improve the protocol, connect more integrations, develop new utility, and deploy capital faster. But the greatest challenge so far has been speed: speed of selecting and confirming new cities, speed of getting governments onboard, speed of deploying money for tangible impact.
Toward that end, Patrick sketched out a possible evolution for CityCoins to streamline its processes and get more cities helping more residents sooner: CityCoins 2.0. Although Patrick was the one onstage, concepts in CityCoins 2.0 are a true community effort, an amalgamation of ideas from every corner of the CityCoins ecosystem. (So if you have any feedback, pop into the appropriate Discord channel or join the next community call—we have one at least every two weeks.)
Here’s what CityCoins 2.0 might look like.
Define the starting line
CityCoins 1.0 unlocked a new funding model for cities. CityCoins 2.0 should unlock faster city activations and capital deployment. Potential solutions involve creating a simple CityCoins DAO, upgrading CityCoins into governance tokens, and allowing users to vote with coins for new cities.
These ideas would simplify how potential CityCoins cities are qualified and activated, allow for many cities to be considered at once, and keep the entire process decentralized.
Right now selecting new cities is sort of like playing with a Ouija Board—it drifts around, moving here and there, but nobody really knows who’s in control. There’s no clear threshold for when a city should be activated, no definitive green light for when the community should press the gas pedal. There’s just a general vibe when a city has enough momentum to launch, and the result is a stalled, stilted process that lurches forward in fits and starts rather than making strides with power and momentum.
So, perhaps we set a clear threshold for activating a city. When a city meets that threshold, it’s automatically activated. Users could vote on the cities they want to activate by forwarding STX into wallets autogenerated for qualified cities. Once that threshold is met—say, two million dollars worth of STX—mining begins automatically using those forwarded STX. Should the city not meet the threshold within a certain period (two months, six months, etc.), all STX forwarded to its wallet are automatically refunded.
This system brings a myriad of benefits.
- It generates critical capital for a CityCoin, offering each newly-activated city reserves to start powering community proposals the moment it is activated.
- It also allows many cities to be considered and activated simultaneously, perhaps via a token-curated registry listing the top 50 cities for the community to vote on. Now the process can be clear and automated.
- It scales many cities concurrently rather than debating and voting on them one by one. Not only does the selection process accelerate, the activation process does, too. We no longer need to wait for city governments to hem and haw—it just happens automatically.
- It reduces risk. If your proposed city doesn’t hit the threshold, you still get all your STX back at no loss.
- Most importantly, it gives the community more agency. Those interested in a particular city can lead the charge. Those uninterested can focus their efforts elsewhere.
It’s a simple, elegant system with profound and exciting implications for the future of CityCoins.
CityCoins utility as governance
By turning CityCoins into governance tokens for a simple DAO, you give them immediate new utility: every CityCoin holder could now vote on how a city allocates its funds. We’re no longer talking about decision-making at the speed of government, but decision-making at the speed of crypto.
This change would speed up funding proposals and supercharge community involvement. It would give control—without burdensome responsibility—to the city, which may retain the right to veto or overrule community proposals.
The new voting process would ensure that funds are deployed only into initiatives that actually reach their goal, and not wasted in projects that just fizzle out.
The vision for CityCoins 2.0
We don't want to fast-forward three years from now and only have a handful of CityCoins with little reinvestment back into the ecosystem itself. We want to have hundreds of independent and thriving CityCoins. But if we don’t change now, we won’t get there.
This new approach would:
- remove barriers,
- foster the growth of many communities and ecosystems simultaneously,
- get more developers working on more projects,
- onboard more community members, and
- make the protocol more global.
Ultimately, CityCoins 2.0 will get more CityCoins out there improving the health, wealth, and happiness of people everywhere.
What’s your vision for CityCoins 2.0?
CityCoins are a community-led project. Though Patrick may be the one sharing his vision for CityCoins 2.0, it’s based on ideas, discussions, and feedback from the community.
At the time of publishing, CityCoiners are currently voting on whether or not to compress the protocol’s emission schedule, which you can do here.
CityCoins 2.0, meanwhile, is still up for discussion. Share your thoughts with the rest of the CityCoins community via the discord and our weekly community calls.