DeFi is coming / S-Coin update
Welcome to this week’s edition of the RHIZOME Wire!
The Coming DeFi Wave
Earlier this week, I released an eight-part series entitled “The ICON DeFi Guide,” which serves as an introductory course to DeFi (decentralized finance) in general, along with an overview of some popular DeFi platforms that exist on Ethereum and, most importantly, the similar DeFi DApps that will be coming to ICON in the early part of this year and how you’ll be able to use them.
When some of these platforms were first announced last year, I’ll admit I was mildly pleased, but certainly not overly excited. I knew certain users would enjoy them and they’d have their purpose, but I didn’t view it as a significant chapter in the story of ICON. This was partly driven by the fact that the hype surrounding DeFi on Ethereum was quickly tapering out, which made me think DeFi was more of a passing interest rather than a lasting part of the ecosystem.
I’ve since changed that view. The hype surround DeFi did subside, much like the hype behind ICOs did as well. But what the ICO boom created (including ICON!) has been long-lasting, and I believe DeFi will be as well.
While the DeFi DApps running on ICON will be gradually released, meaning there’s no “DeFi moment”, I do think the collective launch of DeFi on ICON will be a fairly significant and exciting step for the network.
I think this is the case for a few reasons.
First and foremost is the overall activity that will increase on the network itself. The most direct impact will be an increase in transactions. Now, it’s hard to tell just how significant of an increase DeFi will bring. I touched upon this topic briefly in the final chapter of the ICON DeFi Guide. Once we hit a certain threshold of DApps that are live, the transaction increase should be notable at a minimum.
In terms of the indirect impact on the network, I’d point out that DeFi on Ethereum has become almost it’s own sub-ecosystem. Part of Ethereum, yes, but also occupying its own corner of the world. DeFi has sparked all sorts of conversation, innovation, competition, and opportunity, just like crypto as a whole. This new burst of activity should give the ICON community a nice boost of energy and activity, which could spill into other areas of the ecosystem. Rather than sitting around and waiting for the next big piece of news from the foundation or price spike, ICONists will now have a new set of tools they’ll be able to play around with and discuss among like-minded community members.
Another benefit is the fact that it increases the earning power of ICX. The ICX you currently hold already offers a risk-free return of around 12% just by staking it through the network.
But now with DeFi, you’ll be able to earn even more than that. And you’ll also be able to earn other tokens just for participating in DeFi, which will also potentially become valuable over time. Oh, and you’ll be able to use those to make money as well.
All of a sudden, you start to look at the ICX token not for speculative purposes (although that element will always be there), but rather as a key to growing your capital.
Imagine a retail newcomer into crypto evaluating projects. Not only is ICX currently being used by the government in Korea (with explicit additional adoption in the future), but it also earns you 12% just for holding it. Oh, and it’s the mechanism for generating even more income on the various DeFi protocols on the network.
On a similar note, and as I’ve alluded to, DeFi makes holding ICX more exciting. It’s already greatly satisfying (at least my perspective) to know that my ICX makes me money without doing anything. It’s additionally satisfying that TAP also makes me money without doing anything.
Overall, it’s just hard to not get excited about DeFi on ICON. If you’re still not quite sure how all this works, I’ll reiterate: read my guide!
What’s the deal with S-Coin?
One of the conversations I’ve seen floating around lately is whether or not Seoul’s “S-Coin” and its associated government services would be utilizing the ICON public chain.
The concept of the S-Coin dates back a few years. Here’s an early news report describing the idea, back from 2018:
Seoul’s mayor, Park Won-soon, discussed the city’s plans to launch what is currently being dubbed the S-coin in an interview with CoinDesk. In his vision of the program, the coin could be used for subway fares, as well as “a payment method for city-funded welfare programs for public employees, young job seekers and citizens helping the environment by saving electricity, water and gas.”
The first hints of ICONLOOP being part of the Seoul government’s initiatives were revealed in September of 2018:
The ICON Foundation is proud to announce that ICONLOOP has been selected as an *operator of Seoul’s standard blockchain platform for ‘Seoul Blockchain Demonstration Project’*(directed by Uracle), which is commissioned by the Seoul Metropolitan Government.
We were given a bit of a taste of what this might look like when, in October of 2018, ICON demonstrated three different projects / applications - ICON Blockchain *Identification Card,* ICON Blockchain *Vote,* ICON Blockchain **S-Coin Payments.
“At the *Blockchain International Digital Festival*, which was hosted by the *Seoul Metropolitan Government*, ICON showcased to its participants, what a Seoul Resident would experience with a blockchain project in collaboration with the Seoul Government.”
In early 2019, we learned of the first instance of the ICON public chain being used by the Seoul government itself:
“ICONLOOP developed mobile letters of appointment for the Seoul Blockchain Governance Team. The letter can be issued and viewed through a Governance Team member’s personal cell phone. A Governance Team member can issue a letter of appointment with a name, member identification number and membership terms after accepting the terms and conditions. Letter of appointment issuance records are *stored on the ICON public blockchain*, making falsification and fake issuance impossible. Authenticity of the record can be verified in the ICON Tracker by searching for a specific transaction.”
A bit later on in 2019, The Block reported that Seoul was going to launch a blockchain-based citizen card:
As part of the initiative, the South Korean capital will launch blockchain-based Seoul citizen cards. The cards will provide citizens with “easy access to various administrative services.” Seoul has already adopted blockchain technology in certain areas.
Min Kim commented on this development:
This was encouraging news.
And, if you read last week’s edition of the Rhizome WIRE, you know that the digital drivers license that ICONLOOP is implementing will operate on the ICON public chain. Will the drivers license fulfill the role of the citizen card? It’s hard to tell at this point. But it would be logical for that to be the case. Why create two separate blockchain-based forms of identification?
However, despite all these signals pointing in a bullish direction, it’s unclear where this project stands at the moment.
The most notable piece of news we received was in the Summer of 2019:
According to the mayor of the South Korean capital, Park Won-soon, the S-Coin will be rolled out by November 2019 and will be integrated into the city’s public services, including transport.
According to reports, residents of Seoul will receive S-Coins by partaking in municipal services and being an “active citizen”, including paying taxes and completing public opinion polls.
After that, however, there wasn’t any public follow up regarding the rollout of the S-Coin. And that was more than a year ago.
And then in July, Seoul Park Won-soon—the primary driver of the push to embrace blockchain within the city—sadly committed suicide.
While an article did recently surface regarding the S-Coin, sparking renewed debate, it was primarily just a re-hash of previously reported news, and noted the death of the Mayor.
So it’s unclear just exactly where this project is at, and what the projected timeline is. Fortunately, in late 2020, Ricky Dodds did indicate progress was still being made:
So, we’ll have to wait and see. While it’s obviously disappointing that this platform hasn’t rolled out as expected, it’s important to remember that building and implementing a new blockchain technology throughout the population of a large city is no easy feat. With something of this magnitude, it’s important to get it done right rather than get it done fast.