GIGACHAD MAYOR SUAREZ EMBRACES MIAMICOIN
MiamiCoin, MiamiPool, ALEX
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My frens,
As I am sure you are all well aware by now, GigaChad Mayor Suarez and the City Commission accepted the gift contributions generated by the MiamiCoin protocol and taken custody of their city wallet, which generates an income of STX from the mining of MiamiCoin every block. The total value of the gift contributions generated may be viewed in real time here (currently around 4.5M STX) and the wallet viewed here. It is not yet clear how the city plans to initially use the funds. From stacking the STX, they could generate a passive flow of Bitcoin into the treasury without having to utilize taxpayer money, or they could put it towards addressing homelessness, for example, or accommodating digital payments for local businesses.
This decision only makes sense for a city attempting brand itself as the Capital of Capital and the future Bitcoin Capital of the World. Mayor Suarez envisions Miami as being a future leader in innovation and is in vigorous pursuit of developing the city into giant tech hub similar in scope and influence to Silicon Valley in recent decades. MiamiCoin’s success could offset a tremendous chunk of Miami’s annual budget, and even theoretically result in the city functioning completely tax-free:
To read more on this:
Miami Officially Votes to Accept $4.3M in MiamiCoin Protocol Contributions - CityCoins
MiamiCoin: Miami votes to access $5M+ from city-based cryptocurrency - Fox Business
MiamiCoin generated $2k every 10 minutes for the city, says mayor - CoinTelegraph
CityCoins has further ambitions to replicate MiamiCoin in future cities using the same model. The protocol utilizes PoX (Proof of Transfer) to donate 30% of STX proceeds from mining to the city’s wallet and the rest is distributed to MiamiCoin Stackers. There is not yet much of a use case for MiamiCoin outside of stacking and earning STX rewards.
That will change soon. September 26th will see the conclusion of MiamiCoin Makers Month, a month-long virtual hackathon for hackers, designers, and creators to compete in creating apps intended for MiamiCoin users and the Miami community. The overall goal of the MiamiCoin protocol is to leverage decentralized technology to evolve civic engagement and create financial incentives for building better communities. More on this can be read in an oped written by Patrick Stanley in BowTiedBull’s SubStack here.
MiamiPool
For those who are unaware of how to mine MiamiCoin, you may do so individually here, as well as stack your MiamiCoin after connecting your Hiro Web Wallet to the DashBoard. You may use this website to have real-time analysis of STX committed per block so you may see what you are up against. At first glance, it may appear you will need a lot of STX to be able to compete individually in mining. You are correct.
That is why I’ve utilized mining pools organized by the Syvita Guild, whom I referenced in a previous SubStack. I’ve contributed STX to their manual mining pools and the MIA rewards from mining operations were then distributed after the total amount of STX contributed has been exhausted attempting to mine the MIA rewards. They have had the intention of creating a smart-contract-based trustless system that automates MiamiCoin mining operations, and after vigorous testing for bugs, their product MiamiPool is now functional and ready for use and may be done so here.
The docs for how MiamiPool works may be read here.
The contract is structured into rounds and all STX contributed are spent mining. The lifecycle of a round is as follows:
A bot will automatically call the mine, claim-mining-reward, and payout-mia functions for the user. The payout-mia will automatically send 3% of MIA rewards to those responsible for spearheading the creation of MiamiPool. The minimum amount of STX you may contribute to the pool is 1 STX and there is no maximum.
There still exists a tremendous arbitrage opportunity mining MIA compared to buying MIA on the market. In some instances over the past month, an individual may mine MIA and immediately turn around and sell it on the market for a 100% profit. There also exists an importance in mining, as more mining interest means more STX rewards for MIA Stackers at the end of Stacking Cycles.
While an individual may see very little hope in winning blocks of MIA rewards from individually mining because of the amount of STX necessary to realistically compete, mining pools create an opportunity for the “little guy” to operate as a whale by unifying their STX with others and distributing the rewards won evenly.
If you are interested in responsibly accumulating MiamiCoin, MiamiPool now creates that opportunity for individuals to do so together and in a completely trustless manner. If you would like to learn more about the Syvita Guild, you may join their Discord. They are a team of Clarity developers (and more) who have various other interesting projects currently in the works.
ALEX (Automated Liquidity EXchange)
ALEX is another open-source DeFi protocol being built on the Stacks blockchain, similar but different when compared with the open-source DeFi protocol Arkadiko that was in the spotlight in my previous post. ALEX stands for Automated Liquidity EXchange and modelled on the world’s financial markets, and is co-founded by the current CEO Chiente Hsu, PhD, who has experience at Morgan Stanley as a Managing Director and Global Head of Quantitative Investment Strategy Research.
With ALEX, an individual may lend their BTC, borrow against their BTC, or open leveraged positions on Bitcoin, while relying on the safety and security of the Bitcoin blockchain. You may also launch tokens, trade tokens, borrow without risk of liquidation, yield farm, and lend BTC, USDC, and any Stacks or ALEX native tokens to earn interest. Their Testnet is scheduled to launch on or around September 27, 2021, and their Mainnet launch is anticipated for November 30th, 2021.
As always, please refer to the whitepaper yourself, as that is what I mainly refer to in these type-ups. ALEX attempts to build on the progress other protocols for loanable funds (PLFs) have started, such as Compound and Aave. In these protocols, lenders provide a token in need and earn interest, and borrowers borrow these tokens and must pay them back in time. When an individual borrows loan A, they must provide collateral B, and the amount of loan A borrowed over collateral B brings one to an Loan-to-Value ratio (LTV). When the LTV gets too high (collateral B depreciates in value against collateral A), a borrower is at a higher risk of liquidation (collateral B sold off either partially or fully to pay down loan A).
ALEX seeks to avoid liquidation totally and will keep a loan active until maturity, and plans to do this through a combination of asset management and collateral pools. ALEX splits a deposited asset between a risky and riskless asset and allows for the rebalancing of the two assets based on market conditions. Automated market making (AMM) is a popular form of rebalancing in DeFi protocols where a downturn in risky asset A will result in an increase in weight of riskless asset B within the collateral pool. In ALEX, a loan at default will see only riskless asset B remaining within the collateral pool. The reason ALEX diversifies their collateral pools is because diversified collateral pools may reduce pool volatility while enhancing returns.
Three features of ALEX one must familiarize themselves with are Equation, Pool, and Vault:
Equation: abstracts rebalancing and market making logic and triggers pool rebalancing. May be Weighted Equation, where arbitrageurs rebalance the pool as the price of each token changes, allowing for the collection for traders to collect trading fees while rebalancing a pool out of weight; or may be a Yield Token Equation, which drives the Yield Token Pool and facilitates efficient trading between an ayToken and a Token.
Pool: handles the logic of dynamic trading strategies. Pools issue Pool Token to liquidity providers relative to their relative contribution to that pool. Could be a Fixed Weight Pool, Collateral Rebalancing Pool, Yield token Pool, or a Liquidity Bootstrapping Pool.
Vault: holds and manages the assets of all ALEX pools. ALEX seperates pools and vaults for cheaper transaction costs for users and quicker learning curve for developers when building custom pools, among other things
The various types of DeFi pools allow for an interesting DeFi experience in which a user may employ dynamic hedging strategies, provide liquidity, yield farm, lend and borrow, conduct arbitrage trades (even with Flash Loans), and utilize a near endless amount of derivatives and financial instruments limited only to the imagination of those building the respective instruments. An individual may even utilize a Liquidity Boostrapping Pool (LBP), which may allow for new Stacks projects to build deep liquidity and enable price discovery with little initial investment from the team, while also resulting in a more even distribution of governance tokens within the community.
With DeFi, conventional finance as we know it may one day become obsolete. ALEX builds on the foundation of the DeFi protocols before them and reimagines and optimizes them in the Stacks blockchain, where it is secured by the Bitcoin network. This is incredibly exciting and an opportunity that should be anticipated, but also prepared for, because there are always risks involved. To learn more about DeFi, be sure to check out and subscribe to Defi Education written in collaboration by our Jungle frens BowTiedBull, BowTiedIguana, BowTiedBrain, BowTiedNightOwl, and BowTiedDuck.
Thank you for reading this latest addition! DeFi is a wonderful innovation, but may be highly complicated in its understanding if you do not possess a financial background. Make sure to take the time to do your homework. I will be doing so as well by reading the aforementioned Defi Education SubStack.
This post is intentionally shorter than previous ones. I am working out a BowTiedFellow Roadmap. I have no plans of monetizing my content but I am patiently awaiting the release of the upgraded Sigle platform, where an interested reader may simply stack their tokens and earn reading privileges, allowing a content creator to earn a portion of the reader’s stacking rewards while costing the reader only a portion of their stacking rewards while they maintain custody of their stack. For now, I am sticking with writing about updates in the Stacks blockchain but will gradually begin talking more and more about Bitcoin and CBDCs as well in the near future.
Great post, looking forward to more!
Ay I like what you did with Gigachad portrait! 😉