It's been over a month since CoinFlex shut down its smartBCH bridge. Since then, we've been waiting to learn how the smartBCH team plan to recover the 101k BCH that's backing the assets on smartBCH.
So far, there's been no update from the team on any progress being made in that regard.
I have been very critical of the smartBCH team in my previous articles, here and here.
But in this post, I want to offer some suggestions on possible funding plans the team can consider, if recovery from CoinFlex is impossible.
But first, an...
It's already an uphill task promoting smartBCH and attracting users to the chain just because of its association with Bitcoin Cash alone.
On top of that trying to bring in new users under the current situation where the BCH backing the assets on smartBCH are 'gone' only seems like you want to use them as exit liquidity for yourself or others.
Core DeFi users on other chains will never cross over, no matter the 'potential profit' or innovation you advertise. To an outsider, it may begin to feel like a Ponzi scheme.
The people currently moving in are mostly existing smartBCH and BCH users who still have faith in the network.
Bringing new users in here without solving the current problem or at least having a solid plan to resolve the 'debacking', will be nearly futile.
Of course, I really want to be proven wrong, but this is what I believe is the current reality.
Initially, there's some talk about raising new 101,000 BCH (about $10 million) funding from private or public investors through a token, flipstarter, or something similar.
This is not a bad idea.
The smartBCH team should package the network as a viable investment opportunity and make it attractive for VCs, and private or institutional investors to invest in it.
It's pointless clinging to an illusion of decentralisation while the chain is not close to being decentralised and sinking into oblivion with investors' money trapped in it.
Make the chain attractive and pitch it to investors, launch a new token for the chain with whatever tokenomics that makes sense, make existing users whole with the new token, and start afresh with a functional chain.
Another viable but long-term solution is to allocate a portion of the smartBCH network fees towards covering the 101k BCH.
For example, instead of burning 50% of the transaction fees on the network, it can be accumulated and put towards the recovery of the missing BCH.
Other revenues that can be allocated towards this recovery plan is the bridge fees. Charge a fee to use the main smartBCH bridge and put the fees towards funding the recovery plan.
This may take a longer time to fill the 101k BCH hole depending the volume of the network transaction but it's workable.
Finally, one of the first steps to restoring trust in the smartBCH network is to have a viable recovery plan and a working decentralised bridge.
Without a proveably decentralised bridge and an actionable recovery plan for the 101k BCH, nobody from outside will touch the network.
I believe that for smartBCH to make any meaningful progress from here, the team needs to:
come up with an actionable recovery or funding plan for the missing 101k BCH that's supposed to be backing the assets on the network
launch a decentralised bridge to remove or minimise trust
have and work with an ecosystem development plan
What do you think about the above suggestions or how will you suggest we move forward from here if recovery from CoinFlex is not feasible? Share with us in the comments section below.