CityCoins

CityCoins empower communities to improve their cities, while providing rewards to individual contributors and municipal governments. Miami was the first to launch their own coin in August of 2021. New York City is closely following with their own release (NYCCoin). Austin seems to be third in line.

A CityCoin provides an ongoing crypto revenue stream for a city, and can be mined or bought by individuals who want to support the city and benefit from the protocol. A city can elect to use its growing crypto treasury to benefit the city and its constituents – think new public spaces, improvements to infrastructure, hosting city events, recruiting startups, and more (1).

CityCoins have three main functions: activation, mining, stacking.

1) Activation: CityCoins are deployed and maintained on the Stacks blockchains. Activation is complete once 20 unique wallets send a transaction to the contact, signaling activation. There are no initial coin offerings, pre-sales, or pre-mining.

2) Mining: CityCoins can be mined by anyone by forwarding STX into a CityCoins smart contract on the Stacks blockchain. Once STX tokens are sent into the contract ,they are distributed in one of two ways:

·         If there are people Stacking CityCoins, then 70% is sent to Stackers and 30% is sent to the custodied wallet for the city

·         If nobody is stacking CityCoins, then 100% is sent to the custodied wallet for the city

Once miners have sent their STX to a contract, a winner is selected by a weighted function that compares the individual miners’ bid to the total miners’ bids sent within that block. Miners are only able to submit a mining bid once per block. Users that win the block bid are minted a block reward per the Issuance Schedule:

3) Stacking: CityCoins can be locked in a smart contract for defined reward cycles and receive a portion of the remaining 70% of the STX sent by miners. Reward cycles are 2,100 blocks in length, which take approximately 2 weeks to complete. This process is known as stacking and could be compared to collecting dividends and interest on traditional investments. When stacking, user must select the amount of CityCoins they want to send to the smart contract, as well as the length of time they would like to stack for, maximum 32 reward cycles.

CityCoins are built on the Stacks blockchain because Stacks enables smart contracts and apps on Bitcoin. It enables a function called “Stacking”, which earns BTC when you lock STX in the protocol. CityCoins leverage a similar Stacking function to enable CityCoin holders to Stack their CityCoins to earn STX, which can be further Stacked to earn BTC (2).

In other words, a city that deploys CityCoins is able to capitalize on the appreciating value of its community cryptocurrency. The more miners interacting on the blockchain, the greater revenue the city receives as a result of collecting revenue on more STX sent per block. At the same time, as adoption increases throughout a city, the greater the reward each miner receives.

Since its release in Miami, MiamiCoin has earned the city over $21 million in about 3 months. Outsiders can also participate by sending STX, but a percentage goes to the city’s crypto wallet. All in all, CityCoins aims to allow developers to create innovativek, and impactful applications on the Bitcoin blockchain, as well as allowing experiments with Web3 and NFTs. Nonetheless, the risk and volatility of cryptocurrencies remain incredibly high and should be approached with caution by investors.

1, 2) CityCoins.co