An Urbit Opinion

TL;DR: I have no chips in this pot (own no address space) but believe in the R&D and technical innovation being done by Urbit community members and its recent competitors, and want the projects to succeed and continue to grow to support future startups on top. Potential buyers of Urbit stars / galaxies should be cautious, as they are closer to utility tokens then stores of value with NGU properties (good old BTC and ETH). But there is a lot more potential upside here. By vastly restricting the supply of planets in the short-to-medium term, minted planets can represent real yield to star owners and keep the market (and therefore project) going.

I was initially very skeptical in Urbit’s recent “change of direction,” in that I didn’t believe primary investors still believe in the project’s potential for future success. In that case, their logical course of action would be to block further fundraising attempts, and attempt to recoup as much of their investment as possible by launching a shitcoin and promptly dumping on committed members of the Urbit community. They did not do that, however, which deserves respect. Including Curtis Yarvin’s return, I agree with every decision the project has made in the shakeup so far. Yarvin comes off as very genuine in the wartime address (linked above), and if there were another secret scheme behind the scenes, most everyone wouldn’t see it coming - you would bring in a random goon and not the founder, to kill a company.

Issuing a competing token could help short-term funding, but Urbit is a long-term project and it would put a big wet rag over the funding situation going forward. Besides the question of who would buy at a market bottom, buyers realize that if the board is willing to dilute or splinter the old asset, they would do the same to the new one.

If the purpose of address space is to fund the development of Arvo, it’s still working; people are willing to work on the project, paid or not. Arguably there should have been more of this in 2019 - 2024. A lot of people got paid well for years to do research on a novel networked functional operating system: collectively we should be glad that happened, not sad that it’s over.

Yarvin proposes that “vibes” and making Urbit the “place to be” is the best solution no matter the rate of core development (it is), and that Azimuth should be tweaked to keep the star market afloat through a new bonding curve until OS development can hit its singularity moment (also a great idea). This is a simple point of discussion, but choosing an un-optimal bonding curve will drive down star prices further and take the project from its current state of “half-funded” to “not funded” and generally suck for all involved parties, so I figure it’s worth raising for discussion since I haven’t seen it mentioned already.

Planet Scarcity

The conceptual value of a star is the value of its 65,000 constituent planets, plus a sprinkle of bragging rights. For stars to have nonzero value, planets must have value - planets must be scarce.

With a reframe of Urbit as “the coolest club on the Internet,” what makes a club cool? What makes a diamond cool? A club is cool precisely because it is exclusive or expensive, with a long line outside. A diamond is cool because it is expensive and shiny. Diamonds themselves don’t have to be rare (they aren’t), the club doesn’t need to have a long line (it’s empty inside), they both work because of enforced scarcity.

In Urbit world takeover, it makes sense for planets to eventually be inexpensive and plentiful. Yarvin obviously understands this, as he described in his address the takeover of Facebook vs. Myspace, that Facebook won because it started with the highest-status members (Harvard students). To extract value from the Urbit-curious, lift star value, and most importantly make Urbit cooler, planets need to start expensive / exclusive ($100+, eventual target $10-100). This requires continued growth (demand curve), but is impossible without restricting the supply curve.

Bonding curve (the one part of the Urbit Master Plan I disagree with)

Yarvin mentioned off-cuff that their proposed bonding curve for a star’s access to planets would be 5% unlocked on day one. 5% of 4 billion planets is 200 million, obviously this is way way way too many for Urbit’s projected user base.

This deserves more thought, but each star should only be able to issue a single planet in the next 1-2 years (~65,000 total) which based on star valuation could put the price of a planet in the 100 USD range [1]. This gives star holders real yield as well which incentivizes HODLing and juices the market. This slow bonding curve should extend 30+ years before fully unlocking all 4B planets, and should be as slow as necessary to keep the planet prices at a maximum yield for star holders. Ideally this would be fully tokenized so star holders aren’t responsible for finding buyers, they just receive staking yield corresponding to the number of newly minted planets (you get the idea). Most likely, existing planets would have to be seized beyond allowing owners the right to re-purchase the same name from the new contract.

[1] There are many more ways of doing this, two I can think of now are 1. enforcing fixed prices based on numbers of planets minted with the price coming down over time, and 2. issuing 65,000 planets over the next 2 years at a constant rate (sell one every 15 minutes) to the highest bidder. These all have pros/cons that should be debated, the important part is that the price of getting on the network is nonzero and profits are distributed to star holders (which favors full tokenization of stars).