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Stacks Ventures Adding DeFi Capabilities to CityCoins

DeFi

beincrypto.com 26 April 2022 15:54, UTC
  
Reading time: ~2 m

Stacks Ventures is incubating 11 projects designed to expand the use of CityCoins into wireless networking, Web3, gaming, nonfungible tokens, decentralized autonomous organizations, decentralized finance, and education.

Stacks Ventures’ Trevor Owens says the new projects are designed to create more utility for mayors using CityCoins to generate revenue. They build on the efforts undertaken by Mayor Francis Suarez of Miami and Mayor Eric Adams of New York City last year, who introduced CityCoins to their cities amid much fanfare.

The Stacks platform is a smart-contract platform built on the Bitcoin blockchain, enabling decentralized applications, finance, and organizations. 

The FAQ on the CityCoins website says: “CityCoins are programmable and will have additional utility over time. The possibilities of CityCoins become endless as cities, one by one, begin to claim their protocol contributions, and communities and software develop around their respective CityCoins. 

“CityCoins communities will create apps that use tokens for rewards, local benefits, access control (to digital or physical spaces), trading, lending, smart contract execution, and more.”

Patrick Stanley, a founder of CityCoins, said that the new startups would help it achieve its mission of increasing the well-being of citizens wherever it is used. 

He said he would like to launch a stablecoin on the Stacks blockchain that would become a vital tool in helping the most vulnerable in cities fight inflation in the U.S.

Are CityCoins securities?

The CityCoins project has the potential to replace taxes by encouraging citizens to mine coins, taking a 30% cut of mining fees in STX, which can then be “stacked” (a process similar to staking on Ethereum) to generate yields in bitcoin. 

But, as Bloomberg Law explains, “MiamiCoin and NYCCoin appear to be dangerously close to meeting the definition of a security under the Howey test.” 

They may soon attract the attention of the Securities and Exchange Commission (SEC) since they offer the “reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others.” 

There is no evidence CityCoins has applied for SEC approval,

CityCoins launch planned in 15 cities

MiamiCoin launched last Aug and NYCCoin launched in Nov. Fifteen more cities are slated to receive CityCoins, including three in the U.S. and twelve others in Mexico City, Rio de Janeiro, Amsterdam, Lisbon, Berlin, Lagos, Cairo, Dubai, Singapore, Seoul, Tokyo, and Sydney. 

Adoption would enhance the mayor’s profile as forward-thinking and pitch the city as a crypto-friendly jurisdiction.


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