The Case for a Qubic Stablecoin - Part 1: The Why Question

We kick off a series of posts evaluating the Steering Committee’s current strategy for the Qubic ecosystem and proposing our alternative. We'll explore why attracting entrepreneurs and creating value should take precedence over focusing on developers and reducing supply.

Spelunker, Aug 5, 2024.

Introduction

The proposals from the Qubic Steering Committee are crucial for the future of our ecosystem. While we respect their efforts, it's essential to engage in healthy debate to ensure we make well-informed decisions. By critically examining these strategies, we can work together to create a thriving and innovative ecosystem.

Why?

If you are an entrepreneur or a company, take a moment to reflect and answer this question: Why do you want to build on Qubic?

If you’re not an entrepreneur or a company, imagine you are one. What would motivate you to choose Qubic over other platforms?

Do not rush to an answer. Don’t mindlessly repeat what you have read (“uPOW!”, “AI!”).

Instead, take a pause, breathe deeply, and think critically about your own motivations before you answer Qubic’s most important question: “The Why Question”.

An Important Question

The two most important days in your life are the day you are born and the day you find out why. This apocryphal quote, often attributed to Mark Twain, describes a universal itch. We all want to clarify our purpose. What is the why behind everything we do? People instinctively know that when you know your why, you know your way.

Behavioral economics demonstrates that incentives shape decisions. Motivational theory claims that individuals have incentives to fulfill their needs in hierarchical order. Psychologists differentiate between intrinsic motivation (internal satisfaction) and extrinsic motivation (external rewards) and have established that both types of incentives influence why people act the way they do. In business, companies make decisions based on incentives such as profit, market share, and competitive advantage. History shows that human progress has been driven by incentives such as survival, economic gain, social status, and technological advancement. No matter where you look, incentives are everywhere. Whether economic, psychological, social, or cultural, incentives drive our actions and decisions.

Understanding why means understanding incentives. Answering “Why do you want to build on Qubic?” means answering “What are the incentives to build on Qubic?”.

A Hard Question

Understanding the incentives to build on Qubic is a challenging task. Many have tried, many have failed. How do we know that Qubic’s most important question has eluded us so far? Look at the current state of the Qubic ecosystem. Name five ecosystem teams, apart from Valis, building on Qubic. Are you struggling? Exactly. This is a clear case of elimination by invalidation—since the current incentives are not producing successful outcomes, it’s evident that the current answers are wrong and a new approach is needed.

To a great extent, the difficulty of “the why question” is compounded by contextual complexity. Entrepreneurs and companies are not evaluating Qubic in isolation; they are comparing it against a diverse and rapidly evolving crypto macro-ecosystem. Thus, the challenge is not merely internal but is intensified by the external competitive environment. When 10 thousand cryptos are vying for a Top 10 position, it is not enough to show progress and improvement, we need to progress and improve faster than the other 9,990 cryptos. Are we? Re-apply the elimination by invalidation test of the previous paragraph.

Wrong Answers

Before we attempt our own answer to the why question, let’s examine some of the common ones and why we consider they are the wrong answers:

“We need to attract developers”

Actually, you need to attract “entrepreneurs.” People willing to bet their own time and effort on Qubic, to assume huge risks in exchange for the possibility of huge returns. Risk-takers with an incentive to create value on top of Qubic.

Not all entrepreneurs are developers, and not all developers are entrepreneurs. Most people (developers are people too) want to become employees. They are not looking for risks but for security in the form of a guaranteed salary. The cooler the project, the better, but the key is to put food on the table consistently every week.

This is why you see new “dev spammers” in Qubic Discord every week. They join the server, spam several channels, and move on to the next one. One done, 9,999 left to go. Should Qubic fund them just because they are “developers”? Absolutely not. Will they accept grants? You bet. What will happen when their grants end? Abandoned codebases. Money and, more importantly, valuable time, wasted.

If you mean “entrepreneurs,” say “entrepreneurs,” not “developers.” Be careful how you speak, because your words shape your thoughts, and your thoughts shape your actions. You may end up chasing the wrong goals and metrics.

Finally, if you need to attract entrepreneurs, you need to develop policies (e.g., grants) that are entrepreneur-friendly, regardless of whether the legal entities they create are for profit or not.

“We need to reduce supply”

We are not against reducing supply. In fact, Qsilver has helped to develop Qearn from the very beginning, and wrote the first post on the topic. However, reducing supply through staking, emission cuts, or developing numerous smart contracts is not the answer to the why question either. This approach attempts to manipulate supply and demand rather than focusing on creating a vibrant ecosystem. Even if Computors—those with the power to approve or reject Steco's proposals—might theoretically benefit from a reduced supply, it’s not without significant downsides.

Slash emissions, and you slash their revenue. Redirect part of their earnings to grants, and they feel the pinch. These measures are only defensible if backed by a robust, strategic plan ensuring every dollar spent drives real value. However, Steco's proposal lacks a clear, strategic plan to genuinely foster a thriving ecosystem, relying instead on a basic grant program and vague promises of increasing smart contract deployments.

More importantly, incentives designed for Computors or whales do not necessarily align with the needs of entrepreneurs. Entrepreneurs aren’t motivated by reduced supply. They are driven by opportunities to create and capture value. By focusing solely on supply manipulation, you’re not addressing the real needs of the target audience you aim to attract away from the thousands of other cryptocurrencies.

To genuinely propel Qubic forward, we need to shift the focus from supply manipulation to value creation. This means developing policies that foster innovation, support long-term projects instead of short-term grants, and create an environment where entrepreneurs can thrive. Remember, if you don’t talk about the real issues, you won’t think about them, and ultimately, you won’t act on them.

“We will soon have documentation, testnet, grants…”

In the hyper-competitive world of crypto, having the basics is a prerequisite to play, not the key to winning. Since you can’t step onto the basketball court without shoes, you should definitely get a pair. But the basics (shoes, documentation, testnets, grants…) don’t guarantee success. Your shoes are not your strategy. To stand out among thousand of cryptocurrencies, Qubic needs a unique, compelling strategy that goes beyond merely having the basics in place.

Coming Up: Valis Response

Our answer to the "why" question will unfold in the next posts of this series. Spoiler alert: the title "The Case for a Qubic Stablecoin" should give you a hint of where we're headed. Stay tuned for the next post, where we’ll delve into why Qubic’s go-to-market strategy should prioritize performance, embodied in the form of a free, fiat-backed, real-time stablecoin solution, over uPOW and AI.

Read “The Case for a Qubic Stablecoin” Series

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🇺🇸The Case for a Qubic Stablecoin - Part 2: Marketing Qubic

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On this Page

The Case for a Qubic Stablecoin - Part 1: The Why Question
Introduction
Why?
An Important Question
A Hard Question
Wrong Answers
“We need to attract developers”
“We need to reduce supply”
“We will soon have documentation, testnet, grants…”
Coming Up: Valis Response
Read “The Case for a Qubic Stablecoin” Series