ICHI's Bryan Gross: the stablecoin project that never made its own stablecoin

Ashton Addison: What is ICHI, at a high level?▶ 00:20

Bryan Gross: ICHI is decentralized financial infrastructure. I'm a network steward, not the CEO or founder. I was an early member of the community. Our vision is to give people complete freedom over how they spend, save and otherwise use their money. We see it as completing the vision of the Bitcoin white paper.

Ashton: What problems with stablecoins is the platform designed to solve?▶ 01:08

Bryan: We saw three major blockers. The first was price stability. To do real business with money, you need stability against expenses, especially the price of labor and goods. You have to be able to run a P&L. But that isn't enough. If you only have stability, you're just as good as the money you already have. You also need to fund adoption, with better interest when people save and better discounts when they spend. ICHI has a model that lets any community create its own stablecoin, and that same community can grow a treasury of assets to fund that adoption. Last, you have to be operationally compliant with the rules around the world. AML and KYC laws are important, and when you redeem an ICHI stablecoin, you're left with a fiat-backed stablecoin that already has those licenses. So it solves all three, but it starts with stability.

Ashton: What is the decentralized monetary authority, and how does it change the way stablecoins are issued?▶ 03:14

Bryan: We used to say business-to-business. This is more like a DAO-to-DAO system. The ICHI DAO does not have a stablecoin. We're the one stablecoin project that never bothered to make our own stablecoin. Every stablecoin created using the ICHI smart contracts on Ethereum is owned by another community, and each one represents a vote on what to do with that stablecoin's treasury. What ICHI did was put together the contracts that make this fast. A community can go from having no stablecoin, no treasury and no governance to having it within hours. That didn't exist before. There have been over 200 stablecoin projects in the last two years alone, and only 30 have launched. I'm saying we can launch one for any community in just minutes.

Ashton: What are the trade-offs of a decentralized authority compared with centralized issuance?▶ 04:52

Bryan: Any time a single entity or person is in charge, it's simpler. The simplest thing would be to create a company, accept your money as a deposit and issue you a stablecoin IOU on a blockchain, so that if you wanted a dollar back, you'd ask me for it. That's technically simpler, but it's the same thing as a bank, which defeats the whole point of blockchain, decentralization and crypto. It's the system we've had for hundreds of years. In our case, you do have to govern it and pay attention. You need to elect your representatives and believe in the community you're participating in. But if you do those things, it really isn't more work. These communities already need to manage code and treasury funds. This is like moving the funds from your left pocket to your right pocket.

Ashton: Which exchanges and partners support the platform?▶ 07:02

Bryan: The model depends on automated exchanges. ICHI isn't an exchange, just as it isn't a stablecoin, but it couldn't have been built before the deep liquidity pools we've seen in DeFi since last summer. Those pools let a community execute its decisions to rebalance or invest through its votes. We've reached out to all of the top decentralized exchanges and have some level of relationship with each, though it varies by exchange. Five out of six are directly supporting our project, and we're working on the sixth. We're going to get all of them. A few projects also launched during our proof-of-concept period, and more are scheduled to launch when ICHI version 2 comes out in just a couple of weeks.

Ashton: What will version 2 change?▶ 08:45

Bryan: Version 1 had no team cut, no investor sale and no pre-sale, so it had to launch on a very limited budget, with a lot of volunteered time and energy. If you're not embarrassed by your version one when you're launching version two, you're probably not doing version two right. Since proving the model in November, we hired some of the top coders in the industry to rewrite the contracts, and Quantstamp audited them. We also re-architected for two-tier governance. ICHI controls the oracles, the investment strategies and the whitelisted contracts, while communities are in complete control of their money. The most exciting part is that in version 1, each project needed its own custom contract, and even changing a code comment meant the audit no longer applied. With version 2 there's a factory contract. You put in your scarce crypto, select from the whitelisted oracles and collateral options, and you get a Quantstamp-audited stablecoin in minutes. The model for how the stablecoin maintains its peg hasn't changed. It's like going from a proof of concept to a production system that can scale to meet everyone's needs.

Ashton: How does the ICHI token work, and does it create a sustainable ecosystem?▶ 12:17

Bryan: The ICHI supply is five million. The contract minted all five million last November, and a day or two later all five million were transferred to the liquidity rewards contract. When rewards started, ICHI came out of the contract to whoever had minted stablecoins and deposited their assets to a decentralized exchange. So everyone who got ICHI from the first day understood the system, participated in it and provided liquidity to it at a minimum. We felt that was important because we wanted people who understood the system to govern it. ICHI is a governance token, and the ICHI in those liquidity pools can be used to vote on all matters of governance. ICHI sitting on a centralized exchange or in a wallet doesn't get a vote or rewards. To keep it from running out, the emission rate is cut in half, a halving like Bitcoin's. But we knew we weren't smart enough to decide far in advance when it should occur, so the ICHI voters decide when the next one happens. One happened two or three weeks ago. Votes are token-weighted, so every vote influences the timing, even if only by a few seconds.

Ashton: Looking five-plus years ahead, what is the key to widespread adoption?▶ 14:59

Bryan: The success of ICHI depends entirely on the projects that launch stablecoins on it. If their communities find value in having money that is stable against expenses, and in building up a treasury of their scarce crypto, and they then do a lot more of it, ICHI will be just fine. If we're wrong and they'd rather use Tether, then I guess we'll go away.