BabelFish — Converting Murky Stablecoin Swamps into Clear Crypto Lakes
A Multichain Stablecoin Aggregator and Distributor
BabelFish is a DAO intent on establishing hyperBitcoinization and an internal futarchy governance system by creating a trustless stablecoin translation device. Put more plainly, they are building a fully decentralized platform that “enables stablecoin holders from any (accepted) issuer to trade with each other at a 1:1 value.” Inspired by The Hitchhiker’s Guide to the Galaxy, BabelFish is providing cross-stablecoin communication across the entire universe of digital currency.
Why Focus On Stablecoins?
Stablecoins offer the most efficient and reliable road to the mass adoption of cryptocurrency. They provide a bridge between the old world of traditional money and the newer realm of digital finance. While the “exact definition of a stablecoin is currently in the eyes of the beholder”, they generally refer to a type of digital currency with value that is directly tied to commodities, fiat currencies, or other mostly agreed-upon stores of wealth. You can ostensibly think of them as digital avatars for real-world dollars.
If the ultimate goal of DeFi is to foster a decentralized economy, then there needs to be an abundance of stablecoin issuers to eliminate the accumulation of power in the hands of the few. Currently, over 85% of the total USD-stablecoin float is managed by only two organizations. This is obviously not in line with the ideals of decentralization. Unfortunately, the more stablecoins there are, the more chaos and confusion surrounds their conversion value. That’s why BabelFish is here to help make sense of the noise.
How the BabelFish Protocol Works
Don’t panic! That’s the BabelFish mantra (also borrowed from The Hitchhiker’s Guide to the Galaxy) that surrounds their community and culture. In an ever-expanding and continuously convoluted space like crypto, staying calm and focusing on simplicity and efficiency is the smartest course of action.
In that vein, the BabelFish platform is elegantly simple. Basically, a stablecoin holder can use BabelFish to convert any accepted stablecoin to another at a 1:1 value. First, the holder feeds their stablecoin into the system. The BabelFish protocol then issues a fully convertible stablecoin and invests their collateral in DeFi while being backed by a Bitcoin Layer 2 insurance pool. The original holder can then redeem their new stablecoin to use on whichever chain or platform they plan to trade on.
Using a Bitcoin insurance pool as the backing for their stablecoin aggregation system also helps to promote a fundamental goal of BabelFish: hyperBitcoinization. This term essentially refers to a threshold of adoption at which point Bitcoin will become the default value system of the entire global economy. This doesn’t mean that other cryptocurrencies can’t or won’t exist. Instead, it means that our traditional understanding of economic value will entirely shift towards digital assets. This is the breaking point that’s needed in order to have a truly decentralized and digital financial system.
The Organizational Goals of BabelFish
BabelFish is set on becoming a DAO with true futarchy governance. Originally coined by Robin Hanson, a “Futarchy” is a system in which we democratically establish KPI goals for our society and then elected representatives propose policies that are meant to be in line with those goals. Once the proposals are established, the futarchy relies on betting markets to determine which policies the system will actually enact. It’s sort of like democracy 2.0 and as Hanson puts it, “betting markets are our best-known institution for aggregation information.”
Currently, BabelFish is operating in what they refer to as the Freshwater Epoch, which has semi-decentralized governance in order to efficiently get the project ready to launch. The next phase is the Seawater Epoch, wherein the DAO is launched and community members can vote on the direction of the protocol. The ultimate state is the Spacewater Epoch, where a true futarchy will be in place.
BabelFish is using FISH tokens which are generated through each stablecoin conversion and are meant to facilitate governance within the DAO. Once the Spacewater Epoch is in place, BabelFish stakeholders will use their FISH tokens within betting markets to determine the currents that the platform will swim toward. The total token supply of FISH is 420,000,000… another Hitchhiker’s Guide reference to the “answer to ultimate question of life, the universe and everything.”
From the Tower of Babel to BabelFish
The biblical story of the Tower of Babel is truly one of the first promotions of decentralization, or at least anti-trust legislation. God was concerned with the concentration of power that was occurring as a result of the monolinguistic nature of Babylon society. After seeing their attempts to reach heaven, God confounded their speech and spread them out across the world. BabelFish hopes to see a similar decentralization of power and diversity of stablecoin issuers, but unlike God, they are providing a tool for universal translation so that anyone can trade any accepted stablecoin across all available digital currency platforms. The end result will be reduced risk, increased utility, and ideally, mass cryptocurrency adoption.
