If you already have some idea about what the Urbit project is, you may be wondering if there is a specific cryptocurrency that captures the value of this ecosystem.
Is there an Urbit cryptocurrency?
Not yet, but there will be.
Urbit has been steadily growing as a decentralized computing platform, famous for its unique hierarchical structure of galaxies, stars, and planets. With the recent proposal known as UIP-0132 (Planet Token), the community is exploring a fascinating evolution of Urbit’s underlying economics, introducing a fungible ERC20 token called $URBIT.
But what exactly is this token, how will it function, and what does it mean for Urbit’s ecosystem?
What Exactly is the $URBIT Token?
The $URBIT token is essentially a way of turning Urbit’s unspawned planets into tradable cryptocurrency tokens compatible with Ethereum’s ERC20 standard. Under the current Urbit system, “planets” (user identities in the Urbit network) are issued exclusively by “stars,” each star capable of spawning up to 65,535 planets. Historically, spawning these planets has been a direct, star-controlled process, tied to Urbit’s unique non-fungible tokens (NFTs).
The proposed $URBIT token radically simplifies and externalizes this process, turning this spawn capacity into a tradable asset on decentralized finance (DeFi) markets. Each $URBIT token would represent the right to spawn exactly one planet. This transforms previously internal, illiquid spawning rights into a tradable, fungible asset, opening a myriad of economic possibilities.
Why the Need for a Fungible Token?
The motivation behind creating the $URBIT token lies in bridging Urbit’s rich, structured address space with the liquidity and innovation of the broader DeFi landscape.
Currently, Urbit’s spawn capacity is tightly coupled to star NFTs. This means star owners who wish to monetize their spawn capacity must individually spawn planets and sell them one-by-one, a tedious and illiquid process. By converting this capacity into a fungible ERC20 token, star owners gain the flexibility to instantly access deeper liquidity pools, collateralize their spawn capacity, or trade these rights in markets without directly spawning planets individually.
In other words, tokenization allows the enormous yet untapped economic potential of Urbit’s billions of potential planets to interface seamlessly with Ethereum’s thriving DeFi ecosystem.
How Will the Token Work Practically?
1. Initial Minting and Distribution
The $URBIT tokens would undergo a single initial minting process, generating an amount exactly equivalent to all planets theoretically possible, which is approximately 4.28 billion (65,280 stars × 65,535 planets each) minus planets already spawned.
These newly minted tokens will initially be stored in a special escrow contract called the PlanetTreasury. Initially, there’s no circulating supply until star owners start converting their spawn capacity into tokens.
2. Tokenizing Spawn Capacity
Star owners can voluntarily assign their spawn proxy (the technical capability allowing a star to spawn planets) to the PlanetTreasury contract. When they do so, they receive an equivalent amount of $URBIT tokens from the treasury, representing the number of unspawned planets under their control.
This effectively turns the intrinsic right to spawn planets (originally tied directly to each star NFT) into liquid, tradable ERC20 tokens.
3. Trading and Integration with DeFi
Once these tokens are distributed to star owners, they become regular ERC20 tokens. Star owners can:
- Trade tokens on decentralized exchanges (DEXes).
- Collateralize tokens to borrow other cryptocurrencies.
- Engage in yield farming and staking within DeFi protocols.
- Hold tokens speculatively, betting on future appreciation.
Thus, Urbit’s vast and previously untapped planetary real estate suddenly becomes accessible for financial experimentation and speculation, bringing Urbit’s community and Ethereum’s DeFi ecosystem closer together.
What Happens When Someone Buys a $URBIT Token?
When someone buys a $URBIT token, they’re effectively purchasing the right to mint one planet. If they choose to exercise this right, the following occurs:
- The token holder initiates a spawn request through Urbit’s ecliptic contract.
- A new planet is minted directly from Urbit’s PlanetTreasury, no longer needing the star owner’s direct involvement.
- Upon minting the planet, the corresponding $URBIT token is permanently burned.
Impact on Star Owners
When star owners convert their spawn rights into tokens, they lose direct control over that spawn capacity. If a token representing a planet from a star’s original spawn rights is used by another party, the star owner cannot reclaim that spawn capacity unless they return equivalent tokens to regain control.
Thus, tokenization shifts spawn control dynamics, making spawn capacity a tradable and potentially scarce commodity, reflecting actual market demand.
Token Economics: Deflation and Scarcity
A critical feature of $URBIT’s design is its deflationary nature:
- Tokens are only minted once at inception.
- Tokens are permanently burned upon planet spawning.
This creates a naturally diminishing supply as more planets are spawned, aligning perfectly with Urbit’s finite address space. The circulating token supply at any given time exactly reflects the number of unspawned planets remaining.
This deflationary model adds scarcity, potentially increasing token value over time as more tokens are burned and the supply shrinks, particularly if Urbit adoption continues to grow.
What’s Required for the $URBIT Token to Exist?
To bring $URBIT into existence, Urbit’s community must complete a few important steps:
1. Community Approval
The Urbit Senate, composed of galaxy owners and other influential stakeholders, must approve UIP-0132, including its exact code implementation.
2. Smart Contract Deployment
After approval, two contracts must be deployed on Ethereum:
- PlanetToken: An ERC20 contract (immutable after launch).
- PlanetTreasury: An upgradeable escrow contract managing token distribution and spawning rights.
3. Ecliptic Integration
Urbit’s main Ethereum contract, the Ecliptic, requires minor updates to recognize the PlanetTreasury as a special spawn proxy. This is a small, non-disruptive change ensuring compatibility without significant complexity.
4. One-time Token Minting Event
A one-time mint event creates all tokens, reflecting the maximum possible planets, minus those already spawned.
When Will it Be Implemented?
Currently, the $URBIT token proposal is still in a draft stage. There’s no fixed timeline yet. Its implementation depends on:
- Final community discussion and refinement.
- Approval by the Urbit Senate.
- Coordinated deployment and integration by Urbit developers.
If consensus is reached quickly, implementation could proceed swiftly. Otherwise, the timeline will extend according to community feedback and technical preparations.
Why Does this Matter?
This tokenization effort is transformative because it represents a practical and economic evolution of Urbit. It adds immense flexibility for star owners and opens the door for financialization and increased liquidity. Integrating Urbit into DeFi doesn’t just benefit star owners, it also exposes the broader crypto ecosystem to Urbit’s unique, privacy-preserving computing environment, potentially expanding its reach and adoption.
Final Words
The $URBIT token proposal is a thoughtful, practical approach to linking Urbit’s unique identity-space with the vast liquidity and economic activity of Ethereum’s DeFi ecosystem. It preserves Urbit’s fundamental scarcity and decentralized identity structure, yet it modernizes the economic model, enhancing liquidity, and usability.
For star owners, planet buyers, and the broader community alike, the $URBIT token could be the gateway to unlocking Urbit’s vast untapped economic potential.
In short, the $URBIT token proposal might represent not just another token, but a significant evolutionary leap forward for the entire Urbit project.
If you want to learn more about Urbit and stay up to date on the development and growth of its ecosystem, follow the Urbit Guide website. We are creating a lot of material that will be published soon!
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