- Blockstack has launched the Stacks Foundation, a non-profit that oversees the development of the network.
- It will reduce the reach of the private company that currently spearheads the development of the network.
- This follows the launch of the testnet of Stacks 2.0, the next version of the platform’s blockchain.
Blockstack, an Ethereum competitor that’s backed by the Bitcoin blockchain, today took one step toward decentralization by launching the Stacks Foundation, a non-profit that oversees the development of the network.
The Stacks Foundation, registered as a non-profit in Delaware, will reduce the scope of the private company that currently spearheads the development of the network, New York-headquartered Blockstack PBC.
That Blockstack PBC has led hard forks on its blockchain ever since its 2018 launch “seemed a little problematic for a decentralized technology,” Brittany Laughlin, the Stacks Foundation’s executive director, told Decrypt.
When the testnet for Stacks 2.0, the next version of the platform’s blockchain, launched last month, independent miners gained the ability to mine tokens on the platform and implement hard forks.
For stakeholders backing the tokens through mining, “it is critical for them to have a place to voice any concerns, any upgrades, and feel like there's a transparent process through which they can make those proposals or changes,” said Laughlin.
“The foundation’s role is to serve in coordinating community efforts to improve things,” she said. One of her first jobs will be to set up an independent technical advisory committee that can weigh in on future proposals and help determine the future of the network. “It’s a really big step into having a more open and transparent development process,” she said.
Laughlin acknowledged that setting up the Foundation took “longer than anticipated.” Blockstack’s CEO had stated intentions to launch the Foundation in a blog post in 2018, but Laughlin said setting up the Foundation only made sense following the launch of the testnet of Stacks 2.0.
I sympathize with the Telegram team for the hurdles they’ve faced.
The current reality is that compliance needs to be a core part of launching crypto projects in addition to tech.
— Muneeb (@muneeb) May 12, 2020
Laughlin will come straight from Blockstack PBC, where she held the position of Head of Strategic Partnerships. Two partners from venture capital firms, Zavain Dar of Lux Capital and Rodolfo Gonzalez of Foundation Capital, and a Blockstack software developer, Jude Nelson, will join her. Blockstack PBC will also provide 100 million Stacks tokens to the foundation, worth $12 million.
Currently, the Stacks token is not tradable in the US because no operational crypto exchanges hold a license to trade securities, according to regulations set out by the US financial regulator, FINRA.
Though Blockstack maintains that the Stacks token is a utility token—one that is genuinely useful and is not bought for purely speculative purposes— it has treated the token as a security under US law. This let Blockstack jump through the hoops laid out by the SEC for its token sale, which ran last year and raised $23 million.
But US regulators may still consider it a security token within their jurisdiction. Setting up the Stacks Foundation would decentralize the Blockstack network even further, hopefully enough for US regulators to wise up to the opinions held by regulatory bodies elsewhere in the world; that it is definitely not a security.
According to Laughlin, if a non-profit, composed in part by an independent advisory committee, is behind the token, then no single entity can be considered to be responsible for the future value of the token—one of the hallmarks of a security. Though this won't nip the issue in the bud, “This is the path towards decentralization where the token may be recognized as a non-security in the US,” she said.