Bernhard Mueller

@muellerberndt

Why We’re Calling Off Our Token and Using Stablecoins Instead

December 13th 2018

Build First, Hodl Never

This article contains a project update from the MythX team as well as some of my own views. Its contents don’t necessarily reflect the opinion of ConsenSys-the-corporation.

If you followed crypto news over the past couple of weeks you might have noticed that things have been turbulent at ConsenSys. I think it’s fair to say that many members of the ConsenSys mesh — including those of us that were lucky enough to hodl on to our jobs — have recently had reason to do some introspection.

Believe it or not but most people at ConsenSys truly believe into the potential of decentralized infrastructure. P2P transfer of value over the Internet. A distributed consensus machine that allows for arbitrary Turing-complete computations. The promises are endless! But clearly we haven’t delivered on them yet, at least not in a way that would have justified the exorbitant crypto valuations of 2017 and early 2018.

No coin offerings, please move along.

The epic bubble of 2017-2018 was caused by the ICO craze and general FOMO but the tech just wasn’t ready for mainstream adoption. There are some obvious lessons to be drawn here:

  • Instead of raising millions of USD on half-baked whitepapers we should work towards scaling the Ethereum infrastructure and building useful things that foster real-world adoption.
  • Tokens allow us to build great crypto-economic incentive systems (e.g. token-curated registries) but the majority of projects do not require a custom token. In many cases all the token does is raise the barrier of entry for users which ultimately is bad for everyone.
  • We shouldn’t lose track of the ideals that brought us into the space, even in the light of strong incentives to make a quick buck. That said, we also need to be pragmatic along the way. The revolution won’t happen overnight. We must play a long game instead of seeking short-term gain.

We believe that ConsenSys’ contributions to infrastructure and tooling are essential to the success of Ethereum. It’s not an accident that Ethereum has the biggest developer community — this was made possible by the likes of Truffle, Ganache, Infura and Metamask. Yes, some of this stuff is centralized, but not mindlessly so. For example, while Infura makes Ethereum more accessible right now, other folks at ConsenSys are working on light clients that will mean less dependence on Infura in the future.

Over the past two years I’ve put my heart and soul into building Mythril (the security analyzer, not the social network thing. It’s going to be called MythX now anyway since the Tolkien Estate has threatened with a prolonged Orc siege). Mythril/MythX brings security into the smart contract development lifecycle. We think that better security (and thus increased trust by end users) is as essential for adoption as higher TPS and better usability.

Besides the Mythril open-source tool, which has just cracked 300k total downloads, the MythX team has been working on a SaaS platform with a novel token-based SaaS subscription model. The idea was to build an “INFURA for smart contract security” that allows anyone to build integrations with development and testing environments. According to our white-paper, end users would purchase “tokenized licenses” denominated in MYTH tokens and we would share part of the proceeds back to the tool developers.

So far nothing special but now comes the twist: Instead of doing an ICO, our token would be released via a bonding curve market contract at the end of the roadmap. We’d call it “utility token 2.0”. It would be a revolutionary new way of kickstarting our ecosystem and incentivizing the community to produce quality tools and grow our user-base. Our war cry was “build first, hodl later”.

Over the last few months however, the team has been reflecting on the plan and re-assessed the potential drawbacks of bringing another utility token into this world. For instance, even though we ran extensive simulations, the price discovery mechanism wasn’t guaranteed to work in the real world — legitimate users could be priced out by speculators, and the volatility inherent in our token (as well as ETH) could turn out to be disadvantageous for our community and users.

More fundamentally, we also found that including a token in the mix simply made the user experience worse. The requirement to buy a custom token to “fuel” the API is confusing for users and frankly simply paying in ETH was a lot more convenient.

Therefore, we decide to call off the MYTH token and instead accept ETH, DAI and potentially other stable coins for payment. By using USD-pegged pricing, we will lower the barrier of entry and create a system that’s more enticing to new developers and users. At the same time we’ll still be able to leverage the key advantages that public blockchain infrastructure offers:

  • Anyone with an Internet connection can participate in our security tools market even without a bank account.
  • No value is extracted from our economy by credit card processors and banks.
  • Revenue sharing can be implemented in a transparent (and eventually fully decentralized) fashion.

Our new motto is “Build first, hodl never”.

TL;DR

We believe that one of the most promising use-cases for Ethereum is enabling transparent and intermediary-free transfer of value. We also believe that introducing a utility token causes too many risks and disadvantages for end users. Therefore, we’re calling off the MYTH token, pricing our license plans in USD and adding support for stablecoin payments.

Will our system be fully trustless and decentralized? No. Will it be as easy to use as paying by credit card? Probably not, but we’ll get there eventually. We hope to become a model for a new wave of Ethereum projects that will bring the Internet of Value to the mainstream.

Questions? Give us a shout on Discord.

About Mythril and MythX

Mythril is a free and open-source smart contract security analyzer. It uses symbolic execution to detect a variety of security vulnerabilities.

MythX is a cloud-based smart contract security service that seamlessly integrates into smart contract development environments and build pipelines. It bundles multiple bleeding-edge security analysis processes into an easy-to-use API that allows anyone to create purpose-built smart contract security tools. MythX is compatible with Ethereum, Tron, Vechain, Quorum, Roostock and other EVM-based platforms.

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