A few hours ago, @ned and the Steemit INC team announced the SMT (Smart Media Tokens) white paper. A bit intrigued, as you can imagine, I decided to give it a quick browse, so for the last two hours I tried to get the most out of it. Obviously, there are a few parts that I just skimmed through, but I did my best to follow the structure and to identify the purpose of this new development stage.
Word of caution: this white paper is quite technical (there are some parts where you should really know differential calculus to understand what's happening). It's significantly more technical than the recent blue paper published by the same Steemit INC entity, but I'd dare to say it's less technical than the Ethereum Yellow Paper (the one in which the virtual machine is defined).
The Blurbs
This new development stage will introduce the following new features:
- any user on the Steem blockchain (an account who holds STEEM, that is) may be able to issue Smart Media Tokens. Think of ERC-20 tokens and you'll understand.
- these tokens can be issued via an ICO, or "as is". A big part of the white paper is dedicated to the ICO smart contracts, it gets very detailed there and I infer that it's targeting people who, until now, were using Ethereum for their token launches.
- there is a new type of actor (not yet clear if it's a feature, a role that can be implemented or just a concept) called market maker. By implementing ideas from the Bancor protocol, these market makers will act as liquidity mediators between STEEM and SMTs. My guess is these will be functioning like decentralized exchanges, or as "buffers" between various SMT ecosystems.
There are many other, more technical, features, but for the layman, I think these points are the most important.
Here's what I understood so far about SMT:
- SMT can be traded against STEEM, via market makers, or in Steemit decentralized exchange
- they can be used in parallel with STEEM, for any content published on the STEEM blockchain. For instance, if you issue a token called RUNCOIN as SMT, you, as the issuer, may use the same tools Steemit.com uses (reward pool, voting, curation, etc) to reward your users. It's like having your own application layer on top of the Steem blockchain
- publishing platforms are not the only use case for SMTs: an entrepreneur, for instance, may chose to issue SMT as a way to raise capital, and then offer these tokens to his shareholders (I think the term used in the paper is "simple derivatives", but we're getting way too technical)
- almost all the parameters that are set on the Steem blockchain can be set for SMTs: total supply, inflation rate, vesting, rewards pool and so on. It's like building your own, (almost) fully parametrizable Steemit.
All in all, I consider this white paper a disruptive move. If implemented correctly (and by reading the white paper I somehow get the idea that some code has been already written) it will position Steem as one of the most prominent blockchains in the world. Obviously, a significant increase in STEEM value is to be expected as well.
Again, only if execution will be spotless.
Now I'm heading back to reading, because 50 pages is a lot and I really want to dissect everything that's in there with patience.
Expect more articles on this topic in the following days.
For those of you curious, here's the link to the white paper.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
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