The Stellar Development Foundation, a not-for-profit organization launched publicly this past week, is developing a new financial platform based on Stellar, their decentralized protocol for sending and receiving money in any pair of currencies.
To learn more about the concept, check out their inaugural blog post.
Their website contains this interesting tidbit (emphasis mine):
To account for both economic growth and lost stellars, there is a fixed 1% annual rate of new stellar creation. These new stellars will be generated on a weekly basis and distributed via a direct voting method similar to “participatory budgeting.” Our hope is that account holders will use the inflation-generated stellars to enable novel business models or to fund causes they support.
Here’s how new stellars created via this mechanism will work:
Every account is able to select another account as its nominee for new currency. Voting will be weighted according to how many stellars the voter has in his or her account. For instance, if you have 120 stellars and you vote for Jane as the recipient, that will be counted as 120 votes for Jane.
Each week, the network will identify the winners. The winners are the 50 top voted for accounts that also received at least 1.5% of the vote. If no account has over 1.5% of the vote, then the top 50 accounts voted for are considered the winners. That week’s new stellars are then distributed pro-rata to the winners.
If the Foundation is the beneficiary of new stellars, the stellars can be used to support our operations or to extend the direct signup and increased access programs.
According to the website, 100 billion stellars were created “at genesis”. Payment startup Stripe received two percent of this initial issuance in return for providing $3 million in funding to help get the project off the ground. Based on this transaction, the initial “exchange rate” was $1.50 per 1,000 stellars. While it’s likely that this value will fluctuate considerably at first, the rate seems to have already gone up slightly according to one exchange rate tracker ($2.46 per 1,000 stellar as of this writing).
Based on these early numbers, the amount of money up for distribution via some kind of participatory method could well exceed several million US dollars per year.