Miami has raked in $5.25 million in crypto rewards generated by its MiamiCoin (MIA) scheme, while the tiny altcoin has collapsed 90% since fervent endorsement by the city’s mayor Francis Suarez.
Miami residents and all current holders who followed Saurez’ pitch to buy MiamiCoin via Singaporean exchange OKCoin have now lost money to date — even after adjusting for staking rewards.
Suarez displayed his ignorance in September when he declared MiamiCoin was “going mainstream faster than Bitcoin,” a dubious claim normally reserved for the most shameless crypto-shills and ICO scammers.
At the time, MiamiCoin was trading beyond $0.05. The token had just recovered from dumping 80% after a peculiar pump that saw MIA’s price multiply near four times just after its first exchange listing.
Miami residents saw signs, banners, truck billboards, and multiple press appearances by their city’s mayor endorsing MiamiCoin last year, as the token approached record highs.
Now, markets value MiamiCoin at just $0.00646 — 90% below its September peak and 35% below its initial trade price of $0.01. Its market cap is less than $6 million, according to CoinGecko.
MiamiCoin’s initial offering was led by CityCoins, a project powered by tokenomics startup Stacks. Stacks has its own native cryptocurrency, STX.
Token holders lock their STX to generate MiamiCoins, with 30% of those rewards directed to the city’s coffers.
CityCoins manages MiamiCoin, Bitcoin, and Stacks positions, remitting only US dollar proceeds to the city as it cannot legally hold crypto assets.
So far, the only exchange game enough to list MiamiCoin is offshore OKCoin, the former employer of Binance chief exec Changpeng Zhao.
At the time of Suarez’s endorsement, both OKCoin and CityCoins website claimed that buyers could earn up to “430% APY” by participating in a nebulous staking program administered by OKCoin.
What was not entirely clear to the average user was these rewards are denominated in MIA and STX, which are incredibly volatile.
STX is fairing a tad better, up around 15% since MIA’s late-August listing.
MiamiCoin was a bait-and-switch on Bitcoiners
Not to be deterred, CityCoins is already pitching new Stacks-powered tokens to cities like New York, Philadelphia, and Dearborn.
Crypto entrepreneur Muneeb Ali is the founder of Stacks (formerly Blockstack). Stacks promises to bring efficient smart contracts to the Bitcoin ecosystem, with token staking its primary use-case.
In 2019, Stacks’ STX token was the first to gain regulatory approval to be sold as a security in the US.
Ali awarded 4.8% of STX’s supply to himself (about 63.4 million STX currently worth $110 million) and gifted another 7.9% to his development team (104.3 million STX, now worth $181 million).
CityCoins usually praises the benefits of Stacks’ incidental use of the Bitcoin network and ignores egregious risk factors when making investment pitches to these cities.
Specifically, CityCoins focuses on the “free money” that city officials will earn, downplaying susceptibility to pump and dumps and catastrophic losses suffered by buyers of its only coin to date, MiamiCoin.
- MiamiCoin’s site says it can be traded and “mined,” although the “mining” is really staking. It has virtually no other utility.
- Vanishingly few businesses across the city accept it, and Miami residents cannot pay city taxes or bills with it.
- MiamiCoin has no use for voting, identification, or even event access.
CityCoins has since allowed “mining” for a token intended for New York City despite no formal partnership.
CityCoins describes itself as a collective which has registered as a non-profit organization in Delaware. Its employee roster seems non-existent, but the group does have an active Twitter account and Discord channel.
A spokesperson recently insinuated to the Associated Press that its combined social follower count of over 15,000 somehow represented the size of its actual organization.
In any case, it’s clear that Suarez has pulled a bait-and-switch on his city. Media reports frequently label Miami’s mayor a Bitcoin fan after he signalled intent to adopt Bitcoin-friendly policies and take a salary payment in the cryptocurrency.
But reality shows he’s more interested in capitalizing on crypto’s newly-found niche in the mainstream zeitgeist by fawning over revenue generated from dumping a useless shitcoin — all while anyone who bought into the charade is deep in the red.
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