Nothing fuels technological innovation quite like sex. As Forbes editor Frederick E. Allen wrote in American Heritage 18 years ago, "Repeatedly, porn has helped establish a market for new technologies. Then the mainstream follows." It was true for VHS and the internet, and it may be true for blockchain technology. In fact, in a sea of projects that probably don't need to be put on a blockchain, pornography stands out as a legitimate use case.
SpankChain is a case in point. The self-described "blockchain-based economic and technological infrastructure for the adult industry" combines two elements: Vynos, a micropayment processing wallet, and a live stream player that allows for P2P connections between viewers and webcam performers. It can point to several advantages for both users and performers.
Users get privacy and anonymity. They don't have to enter credit card data (or, by extension, answer questions about their spending habits from partners wielding a monthly statement). In addition, they're promised lower fees.
Models/performers and businesses avoid chargebacks (when a user claims they didn't purchase something, the credit card company often gets the money back from the payee) and receive a greater share of tips. Plus, everybody gets to use crypto! Win-win (except, potentially, partners not tuned in to their significant others' porn habits).
Though SpankChain has its sights set on the adult industry at large, it's taking significant steps to create its own platform. That's where today's announcement about BOOTY, its own stablecoin, comes in. The company is airdropping 10,069 tokens to those who have staked at least 500 SPANK, its ERC20 token.
SpankChain says it uses a multi-token model because it separates "ecosystem-wide coordination processes from mechanisms which meter platform usage rights." In other words, holding SPANK is akin to having a license to use the platform, while holding BOOTY allows one to pay fees. BOOTY is different than SPANK in other ways. First, according to SpankChain, "SPANK's staking utility stabilizes token prices by incentivizing holding. This kind of stability relieves performers and businesses from the stress of holding a volatile asset." (In terms of incentivizing holding: Users have to "lock down" the token, like a deposit, to generate BOOTY, and the longer they do, the more they generate.)
But SPANK wasn't used for tipping. Ether was. Now BOOTY will be the "primary incremental tipping token on the site." Users who want to continue using Ether will automatically see their ETH exchanged for the new stablecoin on a 1:1 basis with the US dollar.
Performers and businesses will probably like it for two reasons: First, they know how much it is worth. Second, they'll be receiving 95 percent of the tips, with the remaining five percent going to SpankChain. According to the company, that puts it into stark contrast with other cam sites, which, it says, take 30 to 40 percent.
The company also conjectures that users may be relieved that they won't have to pay fees "in a token that may be worth 100x one day."
SpankChain's attitude toward stablecoins is as open as its attitude toward sex. It views stablecoins as an experiment, making BOOTY an experiment as well. It compares the coin to DAI, MakerDAO's coin: "By using BOOTY, we are in control of our own experiment at a smaller scale and with less risk. To put it in perspective, there are currently about 43 million DAI (worth $43 million), whereas the total initial BOOTY supply is $10,069." It's reasonable to assume that SpankChain can keep $10,000 in reserve to match the initial tokens in circulation.
Moreover, whereas DAI is backed by ETH, "BOOTY is backed by the continued use of SpankChain infrastructure and services." That's likely a solid plan. After all, whereas the demand for Ether waxes and wanes, the demand for pornography only seems to increase.