The Private & Decentralized Gold-Backed Stablecoin
It's an engineering technology problem and finance is the product of it
Useful Pre-Reading and Watching:
Introduction
Amir Taaki’s DarkFi now puts a new spin on Daniel Robles’ ideas regarding concepts such as Knowledge Assets, the Innovation Bank and Curiosumé. Robles’ original claim with respect to Curiosumé was that it would ‘put out the lights on Big Data’ and form a global networked body of knowledge founded in the best networked global source of truth: Wikipedia.
Firstly, advancements in blockchain technology show that for Curiosumé to work with end to end verification and trust, the source of knowledge, the Wikipedia platform itself should be stored on Arweave such that there is no possibility for any memory hole. The same principle applies to verified artificial intelligence and LLM outputs being developed in the Arweave Ecosystem, being primarily driven by Apus Network’s on-chain GPU computing network, whereby the model, the inputs, outputs and computational logs are all stored on the Permaweb, trustlessly, which provides end to end verifiability. Since 2015 it has come to light that the CIA and other intelligence agencies engage in selective Wikipedia editing as part of ‘information warfare’ which is really just PR on behalf of Power Capital. This makes Dan Robels’ Curiosumé morally hazardous and unfit for purpose absent further checks and balances, such as those previously described.
Advancements in Big Data and Chain Analysis have since shown that the rudimentary privacy tools from a decade ago no longer keep users protected from surveillance capital. Even users of Monero, the world’s leading privacy coin, are vulnerable to dust attacks,, poisoned outputs and tracing from centralized KYC compliant exchanges, leading them to propose an upgrade from Ring Signatures to Full Chain Membership Proofs.
Amir Taaki and his DarkFi team are incorporating all of this learning and are applying cutting edge understanding and implementations of IP address privacy measures, zero knowledge proofs and homomorphic encryption, and not just for anonymous payments, but for task management, collaboration tools, Git repository management and contribution and DAOs. Thus we can incorporate this engineering reality, both the assumptions that did not withstand the march of innovation and the latest technological understandings and implementations into an updated and more refined understanding of Dan Robles’ concepts, such as Curiosumé, in 2025.
These concepts will be applied to a theoretical proposal for a decentralized and private gold backed stablecoin, following conversations and interactions with Ray Youseff, the founder of NoOne’s App, a private and anonymous cryptocurrency trading platform primarily aimed at the African and Middle Eastern markets. Ray is a passionate Pan-Africanist who believes that Colonel Muammar Qaddafi was assassinated by Anglo-American financial interests primarily for his desire to create a Pan-African Halal compliant gold backed currency, and we have had discussions about implementing this both in public and private. As Akong Tulku Rinpoché famously said ‘only the impossible is worth doing’ and this seems to me like a one of those impossibles worth doing both out of respect for him, the manner of his death, and the victims of the Lockerbie Bombing that Qaddafi was not responsible for, the CIA were.
This post is also intended as a message of solidarity between Scottish, Welsh, Irish and Cornish independence movements and those fighting against the Anglo-American neoliberal empire everywhere on Earth. We are here in this ‘United Kingdom’ usurped by German parricidal pedophiles, owned by Eastern European extortion racketeers and usury scammers who are ‘Jewish’ only in name, whose ‘Union of Crowns’ is an abomination not only to God but to the premises of its own terms and laws also.
The Value Proposition
A Defined Physical Tangible in an Economy of Poorly Defined Intangibles
Let’s be honest, if I tell you I’m an expert in blockchain technology, that mostly means that I’m a twat and most likely a scammer also. So let’s start this conversation by recognizing that a blockchain or a cryptocurrency network is primarily just a clock for Cyberspace, overcoming the Cybertime Crisis of frenzied interia and performative edgelording and memelording by measuring value into existence automatically as an integral of space and time. The primary value of blockchains from an engineering technology perspective is to be able to measure the change in knowledge over time, which is innovation, which is responsible for 80% of economic growth. However innovation, just like all the performative bullshit and box ticking we’re forced to do in order to please gatekeepers and the mechanisms of propaganda production, is largely still a poorly defined and intangible thing. So with that in mind, let us continue.
Stablecoin Definition
A Stablecoin, as described by Ian Grigg, is a Zero Coupon Bond. It is a bond that does not pay interest and pays face value at the time of redemption. This is why Tether can become such a vastly profitable company in such a short time, all US government debt is free money for them, essentially. They farm the yield curve, the future discount, and issue currency, now with the full backing of the United States Treasury.
But the Tether Cindarella story points to a deeper principle of value founded in Daniel Robles’ explanations and descriptions of value propositions. A value proposition is composed of three metrics: quality, quantity and variance. A gold Stablecoin could therefore be considered to represent a risk-adjusted Net Present Value of gold in future in the same way that a USD Stablecoin is a risk-adjusted measure of 1 USD face value when it’s spent, underwritten by the Treasury yield curve and ongoing QE Infinity.
Quality, Quantity & Variance
99.9+% pure gold of single items weighing 1 troy ounce and above shall be the benchmark quality, quantity and variance of product available on demand at a redemption agent.
Gold-time-variance
It’s not gold that is measured, it is rather gold over time of a defined quality and defined variance of redemption (in the ground or in a shop or in a vault, owned by a responsible person or someone prone to losing their belongings, in a safe place or an insecure place, replacement capability, which relates to insurance, and so on)
Variance incorporates both risk and reward, both of which are shared. How gold trades against future gold in various forms must be managed and attested to by situational and technical experts: it requires insurance and it requires trust.
There will be a defined time-dependent redemption hierarchy and redemption limits adopted by Stablecoin redemption agents, who will also operate in a hierarchy according to zero coupon underwritten available quantity. If a user wants to redeem a few grams of gold, they can put it towards a jewelry purchase in a shop anywhere, for example, but if a user wishes to redeem a few tonnes of gold, they will have to do so from a distribution hub, or a primary agent in cooperation with a distribution hub. Grams can easily redeemed at low risk, while tonnes require serious security and logistical trust and expertise, and can also take significant time to redeem, especially at the edges of the network. The variance of big fish (whales) and small fish (minnows) must be taken into account in the variance of the value proposition to prevent both bank runs and the risk of lack of redemption at the edges (lack of network connectivity). Lack of connectivity equally risks being attacked by centralized entities who can cause bank runs. The differential between gold redemption and transaction connectivity should be measured at all points in the network to prevent Stablecoins at the edge being absorbed by centralized exchanges, as is the mode of power for centralized Anglo-American cartel operations such as Binance and Tether.
Gold production, attestation, assaying, and ownership
When a gold holder buys the gold Stablecoin with their gold, they are selling their gold to the network, but they may still be responsible for it, to attest for its existence and security.
The Gold Shop Needs Cash
Imagine, for example, that a gold shop owner needs liquid funds for business operational purposes, and sells a 2 troy ounce 18 karat Cuban Link white gold chain to the Stablecoin network for ~1.5 ounces’ worth of stablecoin currency, when the shop owner sells the chain, say, for 50% markup above spot, he is obligated to buy back the Stablecoin he purchased from the network or roll over the purchase using additional inventory. Thus we begin to understand how the network is backed by gold-time-variance.
The gold, in this example, is held for a time, according to a variance which is the reputation and trust in the gold shop owner that he won’t, for example, sell all his stock and run away, that his gold is real and so forth. Also if the gold chain is sold via Stablecoin redemption, then fees according to time preference must also be taken into account in a redemption hierarchy (getting 18k ornamental gold now vs 24k bullion in future) and this risk should be equitably shared between the shop owner and the network.
The variance of this value proposition is narrow, it’s low risk, but all the risk is weighted to the downside.
The Artisanal Miner Needs Equipment
Another strong value proposition underpinning this gold-backed Stablecoin is the high variance and relatively poor overall productivity of African gold mining. The value proposition of gold in the ground, or the river, is substantially different to that of gold in a shop window but can still be explained according to quality, quantity and variance and resulting network connectivity. Pure gold nuggets and flakes are much easier to trade and sell than, say, 0.3% by weight gold ore in hard igneous rock. The former can be traded casually, the latter without specialist crushing equipment is just heavy rocks to be trucked down often poor quality roads, and there’s a hard limit on the economy viability of doing that, and therefore the network connectivity of the value proposition itself, meaning fewer buyers and a worse deal for the sellers. The same can be said of gold scrap from electronics, the scrap is more valuable where the infrastructure exists to recycle it, so, for example, in China the scrap might sell for 30% of final value, in America 15%, but in Africa it might sell for 5% or less, or worse have no bid price at all.
This leads to a systemic problem with resource extraction across Africa whereby the low hanging fruit is over-exploited with very high competition, and the higher hanging fruit is left on the tree and/or requires submission to Western imperial powers in order to exploit, again with few buyers and a bad deal for the local economy, and the Western engineers themselves who are merely lackeys eating the leftover umble pie from the Lord’s table.
Royalty
This leads us to the definition of the ‘royalty’ which is a share of future mine production. The term originates from the English crown’s ownership of natural resources in the ‘United Kingdom’ and its entitlement to an ongoing share of production from resource extraction activities, originally in kind but later evolving into regulatory and tax frameworks.
In the modern era gold mining royalty companies are some of the most successful and profitable ways in invest in the gold and silver mining industries, as well as base metals, oil and natural gas. The royalty company invest in mining projects, cover the engineering soft cost, typically in the detailed design and construction phase, in return for the option to buy a fixed amount of future production for a fixed low cost indefinitely once the mine is operational.
Thus in the same way the gold Stablecoin network might invest in better equipment, better expertise, infrastructure, training, education, division of labour amongst artisinal and semi-mechanised mining in Africa in return for a share of future production.
This value proposition is wider variance, a higher risk, but with the right knowledge, networks, the right support from local and national government the variance is much more weighted to the upside and provides a steady stream of low cost gold as collateral for stablecoin issuance, offering passive yield to the network. It also weights the quality of the product itself more in favour of the African market, which has the gold already, it’s just in the ground. You have the gold, you make the rules, and the royalty framework is both Halal compliant and pan-African ideologically compliant.
Equitably Sharing the Variance
The risk is that gold in the ground cannot be immediately redeemed, therefore the ability to accept yield must also be weighted against redemption restrictions, paying for the cost of time and sharing the risk and reward, but this is also normal in Mudarabbah arrangements and Halal finance in general.
Liquidity, Withdrawal and Redemption
Gold now is worth more than gold in future. The network of withdrawal and redemption should incorporate enough variance to profit from situation-ally subtle, nuanced and expert knowledge, but not so much that it cannot trade out of its variance in exchange for gold bullion on demand. Thus reputational and technical risks must be incorporated from concept. A variety of expert competencies and technical authorities will be required for higher variance value propositions, such as gold royalty contracts.
Privacy and anonymity should be central to the engineered solution at point of use and point of sale, but the value of reputation and revealing of aggregated value propositions and determination of statistically significant opportunities and trends will be required at scale. The higher the risk and the higher the opportunity, the better the value proposition for transparency over privacy. Both come with costs and rewards that should be managed according to business requirements.
The Bi and Tri Metallic Standard
The Conder Token revolution of the late 18th century, as described by George Selgin in his must read book ‘Good Money’ describes not only the core problem that a decentralized and private gold backed stablecoin must overcome: which is the ability to redeem, but also that it was the collapse of the Tri-Metallic Standard that caused the economic inequalities and wars of the 18th century. While the elites traded in gold and silver, and that standard was sudject to pressures from the East and the rise of the East India Trading Company, the silver-copper and gold-copper exchange rate collapsed, the crown refused to exchange copper coinage, widely counterfeited, poorly produced and under-supplied, with gold of equivalent value at the Tower of London, according to its promises.
This gave rise to a two tier economy: one of trade and production and another of barter, taverns and brothels, which widely mirrors the internet we see today: where the AI, the robotics, the means of production are horded by the corporate fascist techno-oligarchs while the proletariat are fed fake news engagement farming slop, corporate propaganda and PR slop, pornography and Marxist & Skintellectual Suppernanny culture wars tropes and dog-whistles stuffed into every crevice of media for general consumption and entertainment.
What played out in the Bitcoin block wars and resulting forks was a return of this fundamental dynamic of redemption capability and its fundamental co-opting by a de facto royal power primarily in the form of American intelligence agencies protecting American Power Capital and imperial interests.
What this decentralized gold Stablecoin concept sets out in theory is a way to build networks of trust that take back control of redemption from the central authority, which causes the economic inequality and rent seeking, as I described in the Romeo-Juliet framework, and put it back in the hands of the Main Street economy, as Conder Tokens did in the late 19th century in the UK.
This concept also opens the door to bi, tri and multi-metalism as a means to increase network connectivity at the fringes the network could issue silver coins with a gold face value, copper coins with a silver face value and so forth. In Africa this has the potential to greatly increase network connectivity by allowing nations who lack gold but are, perhaps, abundant in other resources, to share in the network and mint their own physical cash, with more situationally nuanced redemption criteria (to be discussed in future). Physical Bitcoins have been around since at least 2012, and the principle with physical gold-backed Stablecoins could be extended by a variety of means, incorporating multiple commodities. These commodities could equally trade on a DEX, even a DarkFi DEX.
Law’s Order
The mechanisms of this gold Stabelcoin network are limited to what can be enforced by the network, which is only profit and loss according to the rules of the network. Some jurisdictions will have more favorable value propositions than others, and this should be considered from concept.
Gold Souks across the Middle East and Africa already incorporate the principles of shared risk, reputation, staking, insurance, self policing and governance. The aim of the system is to formalize and scale these existing systems in code using blockchain and cryptocurrency network technology. A thorough understanding of these systems can only be gleaned via boots on the ground research, with local guides, business owners and operators and ideally with the support of local institutions such as the local Chamber of Commerce or Economics Ministry.
I do not claim to have a thorough understanding, but I have read David Friedman, Diego Gambetta and a number of other academic authorities, and have spent time in North Africa personally, and this concept statement is meant primarily to spark conversation and further engineering discussion.
Initial Roles in the Network
Assayer
Measures and attests to the quality and quantity of the gold.
Broker
Exchanges gold Stablecoin for gold collateral to the Responsible Party.
Responsible Party
Is responsible for ensuring that the gold is in their possession according to their contractual obligations to the broker
Redemption Agent
Redeems the Stablecoin for gold on demand according to their ability to reasonably do so. Typically anything up to a kilogram immediately, anything over perhaps requiring more time, depending upon the size of their business and trusted network.
Miner
Accepts investment from the network for ongoing gold delivery to the network from the deposit according to the royalty agreement.
Royalty Company
A DAO that organises royalty agreements with competent financial and technical authorities contributing low cost future gold to the network.
In Summary
The commodity backing the gold stablecoin is not gold per se but rather gold-time-variance pegged to the gold spot price on demand. It is a collection of distinct and unique value propositions aggregated across the network, with no single point of failure.
Gold in different forms at different stages of the value and logistical chain of production and sales has a different specific value proposition. These should be incorporated to maximize value, especially from gold in the ground which is one of Africa’s greatest resources. Royalty contracts are a promising way to approach this that share both risk and reward without debt.
Further research would be required to understand and formalize the Halal financial networks already in place across Africa, and study the particular nuances, subtleties and quirks of each, but a great deal, at least in concept and front end design, can be figured out from fundamentals.
Further research would be required to identify favorable locations and jurisdictions for royalty agreements to benefit from the opportunity of high variance across the African mining sector.