The “International Blockchain Monetary Reserve,” or IBMR, a startup helmed and self-funded by the former Vice Chairman of FinTech site TrueMoneyPhillipines, is developing a consensus protocol called “Social Proof of Work,” whereby citizens log allegations of “corruption” onto a shared ledger to generate new crypto tokens. The best part? Participants can log allegations against IBMR itself.
“Our approach empowers the urban working class to report on the inefficiencies that no one else is tracking with real-time data—like reporting prolonged roadwork, traffic travel time and inexplicable random price increases in monthly utility bills,” said managing director Sinjin David Jung in a press release sent to Decrypt. Jung, as well as having been Vice Chairman of TrueMoney, subsequently told us in an interview that he set the benchmark for gambling regulation in Asia as the regional director of gambling site “PokerStars,” back in 2007.
Coins for corruption
The project is aimed at the Southeast Asian “urban working class,” according to the 71-page IBMR white paper. The idea is that the workers’ collective input, plugged into surveys accessed via a “mobile app,” will produce a comprehensive and transparent map of “systemic corruption.” There are three sorts of information participants can provide: 1) easily provable data from sources like online utility bills, 2) more dynamic, external data about infrastructure and corporate responsibility, and 3) “verification” of data submitted by other users.
In return for this info, contributors receive “Asia Reserve Currency Coins,” (ARCC), the rather optimistically named token that IBMR plans to mint. Even more optimistically, “ARCC’s long-term objective is to establish itself as the regional crypto-reserve currency of Southeast Asia, i.e. the EURO equivalent of Southeast Asia.” The hope is that it will function as a “macroeconomic stablecoin,” i.e. a cryptocurrency that generates its own stability and isn’t tied to any fiat currency.
To achieve this, the startup plans to sell its $0.016-valued ARCC tokens in a “private pre-sale,” starting today, for which it hopes to generate between $5 million and $80 million. (Jung said 14 investment funds have shown interest, and that various family businesses will also chip in.) Users’ tokens will then be locked for three years, preserving them as a “store of value.” Within eight years, Jung hopes that the price will grow and that the tokens will be useful as a transactional currency. He expects to wait a further forty years until the system is fully operational.
So what’s IBMR’s business model? Two percent of the coins raised, Jung tells us, will pay for the startup’s “operations and management,” along with 20 percent of the revenues, which are generated through sponsorship deals with businesses and government agencies looking to scrape IBMR’s research—a commercial model he insists has worked for other projects in the past. Jung adds that none of his team members, nor he, will take a salary. (They don’t need the money, he said.)
Revenue will also be generated through a series of social-good-style investments, including a submarine cable across the Pacific. In this way, Jung tells us that IBMR is more like a “social impact fund” than a typical business.
So, the question for any would-be disruptor of the incumbent financial system—is it decentralized? Uh, not so much. Economic decisions are made by a separate “Monetary Council,” which, through votes, exerts direct control over token issuance and is subject to the laws of Singapore, where IBMR is based. (The entities developing the app and the currency’s underlying tech are based in Taipei, Taiwan and New York, respectively.)
Moreover, the Council retains the power to ban users who spam or fraudulently report misleading information. “In terms of the management on the network,” Jung said, “it will be as centralized as the current crypto exchanges.” Still, the surveys themselves—in which users are compelled to verify each other’s accounts—are decentralized.
Who watches the watchmen? The watchmen.
Most fascinatingly, IBMR’s system allows for participants to report wrongdoing by, well, IBMR. Though the startup’s records will all be transparent via the vote-based Monetary Policy Council, the system nevertheless allows for the (admittedly bizarre) scenario of the watchdog exposing itself.
Yet IBMR’s somewhat centralized nature adds another dimension to this. A group of self-interested voters in the future could, conceivably, band together to abuse IBMR’s censorship power—designed to root out bad actors—to shut down such whistleblowers. “Internally, this is a something that I spend a lot of time trying to sort out,” Jung said.
There’s a sort of fix. The Monetary Policy Council will be run by 300 representatives, who can vote down unscrupulous colleagues. “Suppose that I am a stand up guy, but my successor isn’t,” Jung explained, “and some narcissistic megalomaniac takes it over (I hope not), the [Monetary Policy Council’s] governance structure would disallow that person from suddenly minting 10x coins or draining the reserves.”
Whether or not IBMR’s democratically enhanced neighborhood-watch service, if it takes off, will ultimately be compromised by a ruthless populist—and when has that ever happened?— IBMR’s proposition that it “expose corruption for crypto” is still a damn sight better than the regular “destroy the ozone layer for crypto.”