Introducing SPEND (§)

Why We Need a Human-Scale Pricing Unit for Global-Scale Commerce

Cardstack Team


In a 1927 essay about the social effects of the telephone, the psychologist John Dewey poses a question that feels particularly twenty-first century: “How can a public be organized, we may ask, when literally it does not stay in place?” While Dewey’s inquiry arose from his interest in nineteenth-century technologies such as steam, electricity, and the aforementioned telephone, the question’s central proposition, namely, that technological advancements have shaped localized communities into ever-changing, ever-expanding societies, proves even more compelling today. What might Dewey think of our globalized world infinitely connected by networks of advanced technologies, digital currencies, international commerce, and more? Can something so amorphous even be organized? How can globalized networks interact in localized, singular ways?

Perhaps money, that age-old unit of measurement, can serve as a key to answering these questions. From Mesopotamian clay tokens to Bitcoin, money, or rather its physical representative, currency, has helped shape our world by functioning as a tool of structure and sensemaking. Through the process of exchanging currencies, mankind has developed networks of commerce, trade, media, and interaction that have not only built human history but also determined the ways in which we behave. Money, for good and for bad, really does seem to be the answer for everything, as the old Ecclesiastes saying puts it. So, might we be able to answer Dewey’s question today by turning our attention toward the nature of money in the age of technological development, or more precisely, the age of cryptocurrencies? The answer lies within the concept of our very own globalized international currency (GIC), SPEND.

Today, every currency in use is represented by a country. But what if we need to price a digital product for a global market, like an NFT? What currency should we use?

The first inclination might be to turn toward BTC and ETH as both cryptocurrencies live within digital realms. While this assumption certainly makes sense, it’s not quite the best solution. The central problem with using BTC and ETH on a global market is that they are not entirely set on a human-scale, meaning their numerical values do not accord with everyday use. Imagine ordering a cup of coffee with Bitcoin: “One Americano? That’ll be .00008 BTC please.” The monetary scale just doesn’t make sense for frequent use. Conversely, people more familiar with the cryptosphere might be tempted to suggest using stablecoins such as DAI or Diem as global currency. The problem here is that stablecoins are ultimately tied to national currencies and, thus, follow corresponding fluctuations and inflation rates. They ultimately do not generate the neutrality needed to achieve a true globalized currency. Our pricing unit SPEND, however, does indeed offer this neutrality.

Okay, so what exactly is SPEND?

To begin unpacking SPEND, we should first explore one of its biggest influences, the economic infrastructure of today’s video games. Consider the online game platform Roblox. It allows users to create their own games, develop their own worlds, and explore the work created by other users. While it’s free-to-play, in-game purchases are made available through Roblox’s own digital currency called Robux. Players can convert their dollars to Robux and then spend freely within the game for upgrades, avatar accessories, tools, and more. Essentially, Robux serves as a neutralized currency for a global gaming system that equalizes payments across international borders. It also helps foster stronger connections with the metaverse among players by virtue of its own one-of-a-kindness; communities, brand loyalty, and insider knowledge all blossom from the neutrality made possible by Robux.

Think of SPEND as similar to Robux. It is our neutral pricing unit designed for Card Pay. We’ve structured it to where 1 SPEND equates to 1 US cent. Though it correlates to USD, it is actually backed by DAI, allowing for exchanges to occur in truly decentralized ways. The process essentially works like this: Card Pay users purchase a prepaid card using Apple Pay. Our payment protocol then converts the payment into SPEND which can be used throughout the Web 3.0 world. Moreover, the cards not only include SPEND balances but also rewards accumulation systems that can be redeemed for cash, NFT drops, collectibles, bonuses, and more. Ultimately, we have created SPEND to operate as a globalized international currency that functions as a tool of measurement and sensemaking just like any other currency.


Wait, how do currencies function as tools of measurement and sensemaking?

Think of currencies in relation to the three main scales of temperature: Kelvin, Celsius, and Fahrenheit. Each scale carries its own context, divisions, and reference points. Kelvin, for example, is used primarily in thermodynamic temperature measurements where the freezing of water occurs at 273.1 K and the boiling point at 373.1 K. Obviously, these measurements work well in scientific settings but are not suitable for daily human use. Fahrenheit, on the other hand, works on a 0–100 scale that just makes sense; 0 indicates extreme cold and 100 indicates extreme heat. National currencies, like temperature scales, are tied to determining factors such as fiscal policies, supply and demand, interest rates, inflation, money supply, and more. Our global economic landscape is dominated by a huge scale of contexts that problematize currency exchange in the same way that thermodynamics influences Kelvin.

Won’t all of these various factors lead to chaos?

For the most part, yes. These contexts often render the currencies themselves volatile, a pattern commonly seen throughout economic history. For example, in 2007 the national government of Zimbabwe responded to a host of economic issues including rising debt, declining output in exporting, and political corruption by massively increasing the money supply. This led to such intense hyperinflation that Zimbabwe started printing currency with 100 billion dollar values. The nation is still reeling from this inflation. In 2015, its 100-trillion-dollar bill was worth just 40 US cents. The inverse of this hyperinflation, ironically, occurs on the blockchain as well. Today, 1 BTC is worth $48,183.80 USD, a price obviously incompatible with daily human usage. To record a sale of $5 in BTC, you have to enter 0.00011 BTC in your cash register. Simply put, these are not human scales. Wouldn’t it be much better if we could implement a Fahrenheit-type standard of currency specifically designed for human scale that could resist the weight of its own contexts?

So then how do currencies achieve perfect stability?

Bear with us here because things are about to get heady and a bit utopian. What does it mean when we say that a certain currency has human scale stability? Well, the currency must be able to securely cross space and time. Yes, yes we know that this is all starting to sound like a conversation you might hear at 1:00 AM in a freshmen dorm room, but hear us out. First, to be considered perfectly stable, a currency must be able to travel across space, meaning it must have the ability to retain its value as it crosses geographic boundaries. So if you transfer $50 USD to EUR, then it must translate to €50 EUR. Though USD is considered stable within its own space (inside the US), it still falls victim to fluctuating exchange rates like any other national currency as it crosses space during international travel. Second, the currency must remain stable across time. If you have $2,000 USD in 1968 then it should still be worth $2,000 in 2021. Obviously, this does not occur today, not even on the blockchain. Stablecoins like DAI, despite what their titles may suggest, are not purely stable as they are pegged to national currencies (USD) and, thus, susceptible to outside influence.

What’s really needed is a non-sovereign, non-pegged currency that’s not priced in USD or EUR. There have been a handful of attempts to achieve this, but none have entirely succeeded. In 2019, Facebook unveiled their Libra coin (now called Diem), a basket of currencies consisting of the dollar, pound, Swiss franc, euro, and yen. Yet Libra never entirely reached non-sovereignty as Facebook passed ownership of the coin to an amalgamation of well-known financial institutions including Mastercard and PayPal. Moreover, it never entirely unpegged itself from national currencies too. In February 2021, the blockchain startup Reflexer Labs launched a stablecoin called RAI backed only by ETH that keeps its own price stability without pegging to an external pricing reference like USD by way of control theory. So far, the coin has managed to fluctuate only lightly in price in accordance with Ethereum. Achieving stable currency, however, is key to generating financial inclusion.


What’s so important about financial inclusion?

If currencies can retain stability across time and space on a human scale, then more people will have access to the financial systems that have so long remained exclusionary. So many stock prices are rendered out-of-reach through speculation, fiscal policies, inflation, and other financial sorcery; engagement becomes limited to the very wealthy. Take Warren Buffet’s holding company Berkshire Hathaway for example. The share price currently stands at $418,451.00. No average person can even remotely afford to buy in.

The cryptosphere isn’t entirely innocent here either. The NFT marketplace OpenSea requires all auctions to have a reserve price of 1 ETH (as of time of publication $3,578.76 USD) that covers gas fees when the auction ends successfully. This practice often causes the price of gas to soar, making NFT bidding only logical when the item is at least $3000. Who would want to buy into Web 3.0 under this ridiculous financial logic? Conversely, attempts at inclusion on the blockchain mostly falter because the currencies reach too low of values. $1,000 USD, for example, equates only to .020 BTC. This lopsided scale of value limits the amount of participants able to purchase crypto assets, an obstruction that ultimately leads to the maldistribution of power and wealth. A globalized international currency would help ameliorate this inconsistency by leveling the playing field so to speak.


How can crypto address these pricing issues?

Discussing cryptocurrency’s volatility has become commonplace for both heads and the uninitiated, and not without good reason. Indeed, so much of the sphere seems plagued by indecipherable pricing. It’s not a world hospitable to everyday people or merchants such as artists selling NFTs. An NFT priced at 1 ETH in 2020 (was $350) would now be asking $4000 today. That volatility only excites the most freewheeling of speculators, not the world at large. The cryptosphere can begin fixing its own instability by simply paying more attention to pricing intent. Stablecoins point toward the right direction because they are pegged to some sense of stability, but they also contain limitations as the stablecoins themselves are tradable assets affected by the force of the market. What’s needed is a conversion protocol at the time of payment that ensures neutrality unpegged from national currency. SPEND operates in precisely this way.

What’s all this about pegging and unpegging to national currencies?

When cryptocurrencies peg to, say, USD, they essentially piggyback on a national currency. Thus, the currency is susceptible to inflation rates, fiscal policies, interest rates, and all other components of national finance. It cannot become a truly decentralized currency. Ultimately, the pegged currencies still work in conjunction with the standard Consumer Price Index (CPI), the measure of the average prices paid by consumers for a market basket of consumer goods. An effective CPI has yet to be established in the cryptosphere because it is such a new and volatile market.

Now, when enough economic activity occurs on-chain, and spending of many types takes place in many different countries between many different peoples across a large span of time, a technocratic, truly decentralized CPI will take shape. For example, when USD starts to tank, it would make sense to gradually unpeg SPEND from USD and instead become a moving average, an informed CPI of actual goods and services sold. Within this world, we will see more unpegged currencies similar to SPEND or even the RAI token. From here, it will be important to ensure that the decentralized CPI does in fact remain decentralized. What exactly is the index? Who controls its components? Who has incentives to game the index or the price? Who benefits if the CPI goes up or down? These are all questions that DeFi will have to contend with if it wants to achieve a globalized international currency.

Well, then what would exchange rates look like in a more decentralized world?


Currently, exchange rates tend to operate with profit in mind. Pretend that you’ve just landed in France after traveling from the United States and you need to exchange your currency. You walk over to the cash exchange counter at the airport and buy EUR. The nature of the exchange will require EUR to be sold at a marked-up price. However, after you’ve completed the return trip to the United States, you will most likely convert the EUR to USD at a marked-down price. This financial logic is called the bid-ask spread, and it refers to the difference between the price at which a dealer will buy and sell a currency. Credit card companies are not much different. Essentially, both exchange rates and credit cards take advantage of consumer blindness to earn profit. They carry out currency exchanges using the mid-market rate — the midpoint between the buy and sell prices of two currencies — rather than using the best rate possible. This often gives consumers the short end of the stick.

In the DeFi world, however, we can use payment protocols and oracles — software tools that send data from the outside world to the blockchain — to distribute payments and facilitate currency exchanges. By using the trader’s rate to convert to and from the currency, exchanges take place in accordance with trading infrastructure rather than retail markup logics. The implication of this paradigm, of course, is huge, as it points toward possibilities of removing financial mediators (Travelex, VISA, Chase, etc.) from currency exchanges. SPEND follows this logic. Since SPEND is backed by DAI, it allows for decentralized exchange rates to occur. The allure of on-chain payment protocol lies in its open-sourced and public computation processes. All of the math is available to view, and it does not give preferential treatment to one merchant or card issuer.

What are the ultimate goals of SPEND?

National governments want to print more currencies so that 1 USD is worth less and less in purchasing power while cryptocurrency players want their Bitcoin assets to skyrocket in price. What we need is something that neither goes up or down in price. 1 SPEND should always be able to purchase 1 SPEND worth of goods. Your wallet may be filled with various currencies that fluctuate, but when you want to make purchases or trades, you can rely on SPEND as a pricing unit to ensure neutrality.

We aim to make SPEND one of the first non-inflationary pricing units of the Web 3.0 world. We hope to create a true metaverse meta-currency that is not controlled by a country or a corporation and not susceptible to the fluctuations of USD, EUR, or any other national currency.

Learn more

This article is about international globalized currencies and Card Pay’s very own pricing unit, SPEND. Read more about Card Pay below.

Interested to learn more about Cardstack?

Check out the resources below:

Introducing Card Pay

Watch the video | Read the article

DeFi Payments with Card Pay

Watch the video | Read the article

Card Pay Protocol: Building a New Software Economy

Watch the video | Read the article



Cardstack Team

Official account for the team behind the Cardstack project.