The new Erasure information market, Erasure Bay, is days away. Erasure Bay will use DAI for staking, and secretly burn up NMR in the background. 🧙♂️
Tokens promised a lot. Connecting a community to a common digital asset. Letting everyone benefit from network effects, not just a company. But now we are seeing projects like 0x doing backflips to make their token make sense. Other projects like Enigma are straight up calling their token a security. Most tokens vs Bitcoin or ETH have vastly underperformed the last few years.
DAI killed tokens. It’s not perfect. It has problems of its own, and maybe worse tail risks than other tokens. But if you have an application where you require users to stake and that application says “we don’t let you stake any of the stablecoins” it’s like come on wtf that’s my safest, easiest thing to stake! DAI showed us tokens don’t make sense for consumer apps. So today we’re announcing that Erasure Bay will use DAI for payments and staking.
Where does NMR go?
With Erasure Bay, if you stake $100 in DAI on a request and get punished, the DAI is sent to Uniswap to atomically buy NMR and burn it. We think this is a very sensible approach to things since it allows Erasure to reach a broader base. It gives users the stability of DAI with the provable burning of NMR. Burning DAI is against its design, if Erasure were to burn the majority of DAI supply, what would happen to its stability? NMR is designed to be scarce (maximum supply is exactly 11 million). In the NMR 2.0 upgrade we decentralized the token and added burning functionality to provably decrease total supply. This allows NMR to capture the value of Erasure and continue to secure the platform while it scales to the masses.
This is an important step towards the integration of Web2 sites like eBay into Erasure. Their users only see USD, but behind the scenes it’s a stablecoin that burns NMR.