As part of the work creating alternative financing structures for bootstrapping grass-roots networks in the ecosystem we have been looking for an alternative to both USDT (Tether) and USDC (Circle) that can offer greater trust, transparency and room for innovation.
Founded in late 2021 and funded by Sid Sijbrandij the founder of Gitlab, Glo’s key differentiator is its commitment to providing 100% of its interest income to basic income programmes.
Initially, Glo’s partner organisation for these disbursements is GiveDirectly, which was chosen for its low cost of operations and high level of transparency and accountability.
The aim is to bring integration to Assethub enabling initially Glo issuance and sufficiency then the development of additional branded stablecoins issued by Brale natively within the Polkadot ecosystem - a feature that promises to unlock many new possibilities especially in relation to collectives.
In three years, the treasuries of Kusama and Polkadot have spent over $50m+ on ecosystem development.
- Kusama treasury annual spending analysis - 2020 > 2023 (june)
- Polkadot Treasury annual spending in USD & DOT | 2020 - 2023 June - #6 by CoinStudio
Right now teams only have the option of receiving $KSM or $DOT, highly volatile assets that make managing funds hard.
There is no stablecoin alternative nor opportunity to hedge risk for those wishing to still receive funding in the native asset.
This adds to the pressures of an already complex, chaotic and stressful environment, especially for those operating outside the structures of Parity/W3F who generally lack business support, but are essential to the vitality and evolution of the ecosystem.
These network native businesses require transparency, regulatory clarity and long term sustainability - precursors to fostering innovation in the next phase of crypto’s evolution.
With interest rates rising around the world, the business model of fully backed stablecoins may not be sexy, but it can provide consistent returns that scale in line with adoption.
Novel financing instruments such as structured offerings by ABO Digital that enable networks to access a draw-down facility rather than more dilutive venture financing also have a requirement for stablecoins which was what led us to the team at Glo.
We are working with GloDollar and Brale on upcoming proposals to Kusama and Polkadot treasuries so there will be ample time to ask questions, give feedback and get to know the people involved via AAG etc.
We will also need to work with @joepetrowski and the system parachains team on some aspects of the integrations since we’re operating external to the processes that onboarded USDT and USDC and then of course there will be the governance process itself including making assets sufficient in Kusama and Polkadot.
Balancing order and chaos at the core of the ecosystem is a priority.
Right now this is not an easy place to build a business - but that is to be expected at this early stage, improving these conditions for contributing teams will be a key to unlocking growth.
Unlike Tether and Circle, GloDollar and Brale are at an early stage and therefore motivated to innovate alongside Polkadot - it is this alignment of interests that can allow us to create conditions to play more positive sum games within the unique governance architecture of Polkadot.
With AssetConversion Pallet and forthcoming UIs there is then a path to leverage Kusama and Polkadot treasuries as LPs (alongside holders) within liquidity pools, driving fee revenues in stablecoins back to the treasuries in the process and ensuring more sustainable growth whilst also generating positive impact.
When matched to other ongoing work, we then have a foundation for bootstrapping a new kind of community owned and operated parachain structure that can provide balance to the tensions evident between system and for profit varieties per The state of DotSama, unlocking more radical innovation in the process.