5/17/23 — The SPOTTER Playbook has been released :)

    1. Narrative Repository
    2. User Groups
    3. User Subgroups
    4. Control Flow Instructions
    5. Cheatsheet
    6. "Spot bends, it doesn't break"
    7. "Bringing dollars on-chain, doesn't mean we've created better money"
    8. "Liquidation markets are everywhere, and that's not okay"
    9. "The Spotter Playbook"

    The Spotter Playbook

    The purpose of the Spotter Playbook is to advance the crypto community from a perspective on stablecoin designs that is grounded in bad assumptions, towards one that is grounded in good assumptions. From there it will be straightforward for people to see the value and purpose of the SPOT token and its protocol. The Playbook articulates a simple control flow for:

    1. Identifying the type of person you’re talking to
    2. Directing the person to narratives that counteract bad assumptions
    3. Directing the person to narratives that artciulate good assumptions

      Narrative Repository

    Each of the narrative materials below focuses on reversing a single bad assumption (Note: some are still pending graphics and edits). For a quick summary of the logic see the cheatsheet below.

      User Groups

    At the highest level there are three types of people we address. Everyone in the world can be grouped into:

    • Spotters — These are people who are already on board with the value and function of SPOT.
    • Pre-Spotters — These are reasonable people capable of seeing the light and becoming Spotters, but they’re going to need some education and they hail from a variety of perspectives.
    • No-Spotters — These are laregly anti-crypto people or competitors who will not be convinced by reason.

      Pre-Spotter Subgroups

    Within the category of Pre-Spotters there are multiple subgroups corresponding to the most commonly held perspectives. These subgroups will change and grow over time, but today they are:

    • Liquidators — People who believe the prevalent use of liquidation markets at the base asset level is safe.
    • Centralizers — People who believe the use of USDC / CBDC’s as collateral accomplishes a meaningful goal.
    • Inflation Haters (Flatcoiners) — People who dislike inflation and believe that today’s dollar-equivalents bring little value to the world. Note: we agree with these people.
    • No Stablers — People who believe the decentralized stablecoin problem cannot be solved. Note: The view held by this group most closely resembles ours before discovering SPOT.

      Control Flow Instructions

    After successfully identifying the type of user you're iteracting with, follow this simple control flow diagram for routing them to the relevant narratives. At the end of the flow the user becomes a Spotter and the cycle repeats. Please don't hesitate to reach out to the community on telegram or discord with any questions you may have.

    Know that regardless of whether a given user converts, regardless of whether you get rich, the world will be made better and safer by coherently spreading the ideas behind SPOT's design.


    Broadly today’s solutions are irresponsible, pointless, or some combination of the two. A few people know this, but most don’t. Reversing the following bad assumptions will advance the market's understanding and prepare it for identifying solutions that create lasting value. Thank of the narrative summaries below as a cheatsheet for understanding the pre-spotter materials used in the control flow diagram:

      Narrative 1 — "SPOT bends, it doesn't break"

    Bad Assumption 🚫
    Synthetic assets can preserve stability forever so long as people believe they will.

    Good Assumption  
    No asset can promise stability forever.

    Consequence of Reversal

    The naive belief that synthetic assets can preserve stability forever prevents protocol designers from proactively considering the case where price and collateralization ratios fall out of band. As a result they produce stablecoins that are likely to fail catastrophically, vastly damaging the space.

    By assuming no asset can preserve stability forever, we push the design space towards building decentralized systems that can 1) support extremely long-lived periods of stability, 2) degrade gracefully outside discrete price and collateralization-ratio bands, and 3) resume stable value storage after Black Swan Events without bailouts.

     This is why SPOT was designed to support long periods of stability, to degrade gracefully outside collateralization bands, and to resume stable value storage after Black Swan Events, without bailouts.

      Narrative 2 — "Bringing dollars on chain doesn’t mean we’ve created better money"

    Bad Assumption 🚫
    Tokenizing the dollar thereby making it digital, programmable, and globally accessible, means we’ve fundamentally advanced money.

    Good Assumption  
    Tokenizing the dollar does not fundamentally advance money. The remaining unsolved problem with respect to fiat money is inflation.

    Consequence of Reversal

    The belief that tokenizing US dollars opens up the global free trade of money and thus meaningfully advances society ignores the fact that tokenized dollars are highly permissioned. Governments may well have opened up the free trade of money long ago without blockchain technology were it socially, politically, economically feasible and desirable to do so. If maintaining such free trade isn’t deemed advisable, the centralized nature of tokenized dollars makes it trivial to sanction, censor, and freeze its use in this regard, at any time. Simply put, we’ve had dollars for quite some time, merely putting them on chain doesn’t make them better. Doing so does not require blockchain technology and touting its use in this regard, risks invalidating the technology itself.

    Rejecting the false assumption that bringing dollars on chain fundamentally advances money leads us to ask: “what does fundamentally advance money?” Fiat monies like the US dollar are great in the sense that they can 1) be used to store and account for near term value and 2) be used as a government instrument to care for the broader economic health of a body of people. The remaining problem to address with respect to money, is its perennial vulnerability to inflation as a byproduct of bailouts and globally interconnected cycles of monetary tightening and loosening. Solving this problem means producing a government-independent inflation-resistant stable asset that can act as a refuge from traditional systems. The blockchain enables the independent creation of new monies and thus might be used to accomplish this goal.

     This is why SPOT was designed to track the CPI adjusted dollar

      Narrative 3 — "Liquidation markets are everywhere and that’s not okay"

    Bad Assumption 🚫
    The use of over-collateralization in combination with liquidation markets to secure synthetic value is a commonly accepted and necessary practice within DeFi. It can thus be used as a safe mechanism for securing value in base assets.

    Good Assumption  
    Liquidation markets carry significant risk of default and to avoid catastrophe their use should be avoided at the base-asset level.

    Consequence of Reversal

    The belief that liquidation markets are a good practice for securing value at the base-asset level, ignores the fact that decentralized systems cannot assume bailouts are forthcoming.

    Liquidation markets are widely used in the traditional world, but they carry a significant risk of default. At the time of default traditional markets rely on bailouts and bankruptcy proceedings to restore customer assets. More concerningly, liquidations can have a rapid cascading effect that can severely damage broader markets long before bailouts and bankruptcy proceedings complete.

    Just as people are concerned about the dollar defaulting, they ought to be extremely concerned about liquidation markets at the base-asset level defaulting. Accepting this new assumption allows protocol designers to focus their efforts on building non-runnable base asset systems that avoid promoting cascading defaults.

     This is why SPOT doesn’t rely on liquidation markets

      Narrative 4 — "The Spotter Playbook"

    Bad Assumption 🚫
    Designing systems based on popularly held beliefs about how financial instruments work, is a perfectly good practice.

    Good Assumption  
    Popularly-held beliefs aren’t necessarily true. We should not be designing to suit false-beliefs if the goal is to produce financial instruments of lasting value.

    Consequence of Reversal

    Designing systems based on popularly held beliefs gives projects a built-in audience and therefor a chance to see the light of day. Still, popularly-held beliefs are not necessarily true. In the case of decentralized financial instruments, the magnitude of capital committed and general lack of discretion with respect to good vs bad financial designs has already resulted in multiple sequential catastrophes. Moreover, the insights revealed by these catastrophes have been immaterial because the designs themselves were proveably fated to fail.

    To reject the assumption that designing systems based on popularly-held beliefs is a good practice­, is to accept that the space requires education. It is to accept that basic knowledge about financial asset design still needs to be converted into “common knowledge” before good products can become naturally agreeable to the masses—and thrive. This practice of turning basic financial knowledge into common-knowledge, paves the way for safer designs and lasting value creation.

     This is why SPOT was designed to support long periods of stability, to degrade gracefully outside collateralization bands, and to resume stable value storage after Black Swan Events, without bailouts.