11 projects were accepted by the Stacks Ventures project incubator to make CityCoins more attractive to global mayors who wish to use a digital asset to get rewards and boost their economies.
Stacks Ventures, a $4 million incubator, is dedicated to projects that use the Stacks (STX), Bitcoin layer-2 smart contracts solution. CityCoins allows partnering city governments to launch their tokens on Stacks. New York City and Miami are the first to sign up with NYCCoin and MiamiCoin.
The local governments can earn CityCoin rewards as part of these partnerships and stake the asset for additional Bitcoin (BTC) rewards.
Stacks Ventures’ second cohort will include 24 projects. 11 of these new technologies will be incubated by Stacks Ventures. They include wireless networking, Web3, gaming and nonfungible tokens (NFT), decentralized autonomous organisations (DAO), education and decentralized financing (DeFi).
Trevor Owens, a partner at Stacks Ventures, told Cointelegraph that Bitcoin can be used to “replace a city’s tax base.” He said that cities could generate enough revenue to pay all taxes that they would otherwise have to.
CityCoins can be used by cities to receive 30% of the STX fees from the miners. To earn Bitcoin yield, mayors can either sell their STX rewards immediately for USD or stack them. Stacking tokens on the Stacks network works in a similar way to Ethereum staking.
Miami Mayor Francis Suarez stated last November that the city would use its rewards for BTC yield generation. The BTC yield will then be distributed to his citizens.
Owens believes that CityCoins should include NFTs, Web3 and DeFi to maximize the potential for future cities. According to Owens, Web3 is about ownership. NFTs can be used for ownership of all nonfungible assets.
“Mayors will be able to see that this is within striking range. They can also add apps and services through CityCoins to make their residents happier and more healthy.
Patrick Stanley, founder of CityCoins, believes that the startups involved in CityCoins will be able to carry out its mission to “increase health, wealth and happiness of citizens and cities wherever it is activated.” But, he wishes to see a stablecoin for the project.
Today, he told Cointelegraph that people will always gravitate towards stable assets because of the cognitive overhead associated with volatile assets. As such, volatile assets such as Bitcoin (BTC), will not likely become a currency.
Stanley believes that CityCoins will grow to better serve more cities. He feels the stablecoins could be a way for cities to combat inflation, which is what hurts the most the poor. He stated that
“Cities may have to protect their citizens from inflation. It would be wonderful if they could do this through a stablecoin earning Bitcoin yield.
According to the US Inflation Calculator, the current U.S. inflation rate is 8.5% per year. This is the highest level since 1981.
Stanley’s enthusiasm for stablecoins to drive crypto adoption echos Sang Lee from VegaX, who believes that stablecoins are essential for expanding cryptocurrency into capital markets.
Related: Quantum computing is used to create economic models for crypto adoption
Stanley believes that everyone will eventually have crypto, regardless of how it turns out. One of the new startups to Stacks Ventures focuses on education, which could help in teaching the public about Bitcoin.
CityCoins was launched last summer in Miami and New York City. They have been used to generate revenue for residents since then. CityCoins has been approached by Philadelphia’s government. Austin seems poised to join New York City and Miami.
Eileen Wilson –Technology and Energy
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