The initial version of SpankPay will start as a simple, elegant checkout experience. It will allow merchants to accept payments in the crypto of their choice (using the same set of cryptos we currently accept on SPANK.Live).

In the future, we plan to upgrade this to become a “PayPal for porn”. We anticipate that some users may not want to wait for block confirmations to process their crypto payments and would prefer to create accounts and do larger deposits, convert to BOOTY, and then instantly pay from that balance. This will also unlock frictionless micropayments from this balance for a seamless a la carte content consumption experience. Sign in once, buy with 1-click.

An important note to set expectations — the first version of the SpankPay SDK will not integrate our latest payment channel work. Using payment channels requires a combined authentication and payment system. The user needs to be able to sign each payment using a private key, which they store on their device. This adds technological complexity and deviates from the normal email and password signup flow that most people are used to. In addition, to be robust in production, payment channel systems require “watchtowers”, which are individuals or businesses that watch the blockchain on a user’s behalf and take action to prevent theft. They are also helpful for secure cross-device synchronization. These aspects of payment channels are still being developed by Connext and others (there’s a great deal of overlap with Plasma watchtowers) and we look forward to unifying SpankPay with the Connext SDK once it reaches its final form.

SpankPay Progression

Up Next — Upgrading SPANK.Live

Our camsite has been in beta since April 2nd of last year, and we’re looking very forward to dropping the prefix and targeting a full launch around end of Q2 2019 (with new updates to be featured at Xbiz Miami on May 28th).

As we’ve discussed before, this upgrade will have 3 major components:

adding private shows expanding to international models accepting fiat payments

Adding private shows is a technical challenge to add logic to handle per-minute billing, notifications for private show requests, rate negotiations, and clean transitions between modes. We anticipate it will attract models and users who crave a more intimate experience.

Expanding to allow international models will require compliance with applicable tax codes and financial regulations, as well as scaling up community support. We’ve transitioned to a more custodial payment infrastructure in the short term but are prepared to quickly switch back to fully non-custodial payments if compliance demands it.

Accepting fiat payments is important because it allows us to engage with the other 99% of the world, but it comes with its own challenges. We will need to segregate content that payment processors ban and only show it to viewers purchasing tokens (BOOTY) with crypto. We’ll also need to create two completely separate accounting systems, one for fiat and one for crypto, and be careful not to cross streams. Users buying in with fiat will not receive ERC20 BOOTY, instead we’ll record and update their balance in a centralized database we control. The UI, however, will abstract all of this away and the user will just see that they have bought tokens (regardless of whether they bought them crypto or fiat), just like any other camsite.

Also, due to the inevitability of chargebacks given that the double-spend window of the legacy financial system lasts 30–90 days, we will be forced to institute a “holding period” for fiat earnings. Crypto earnings will still be able to be withdrawn immediately.

All of these features will prepare SPANK.Live for an exciting launch and position it well for long-term profitability. We’ve thus far held back on doing a larger marketing push because without any way to convert users with only fiat currency we thought it would mean wasted marketing spend. But with private shows, international models, and a fiat gateway in place we’re hyped to make some noise and get the world on SPANK.Live.

2019, Part Deux — SpankClips

We expect our work with SpankPay and SPANK.Live to take us through the end of Q2, but after that our focus for the remainder of the year will be on shipping the much anticipated clipsite.

I’m too sexy for my hat, too sexy for my hat, what do you think about that?

The clipsite will allow models to upload videos and sell them individually. It will integrate with the SpankPay SDK for maximum dogfooding and 1-click purchases, and should be ready to launch in Q3 2019. The designs have been largely complete for months — if you know of a dev shop that wants to take this on and get it started sooner, please tell them to reach out to us!

On the Horizon

Going in to Q4 2019 and beyond, we’ll finally have the trifecta of SpankPay, SPANK.Live, and SpankClips launched and gaining traction. The next step will be to boost our marketing with an Affiliate Network, upgrading the SpankBank and implementing the BootyCall, and then launching ComeSwap, our decentralized exchange.

Affiliate Network

Our Affiliate Network will allow models to enter into fluid revenue sharing agreements with promoters and other models who want to help direct paying customers to that model’s clips and live shows. If the resulting purchases are made in crypto, affiliate earnings will be able to be withdrawn immediately. All earnings will conveniently be aggregated and tracked through the SpankPay Merchant Dashboard.

ComeSwap

ComeSwap, originally intended to launch around DevCon, was delayed by our hack and subsequently de-prioritized in favor of focusing on SpankPay. This is largely due to the unexpected surprise of Uniswap launching at DevCon and providing an answer to a question that stumped my legal counsel, which was: “Okay, so I want the company to make money as a liquidity provider for SPANK, but without risking being seen as conducting market manipulation. What if we ran an automated market maker bot but published the algorithm publicly so its proper operation could be transparently verified?” Uniswap is all this, but better, and so much more.

In early November, within a few days of its existence, we YOLOed and added $50K ether to the SPANK/ETH liquidity pool which was more than everyone else combined at the time, but the total reserves have since grown to ~$3M. According to CoinGecko, the vast majority (75%+) of SPANK trading is now conducted on Uniswap. All liquidity providers share 0.3% fees on those trades and SpankChain is providing 80%+ of the liquidity.

With Uniswap earning us trading fees and the SPANK.Live payment channel system providing a way for stakers to sell us back their BOOTY for ETH (simply deposit BOOTY and withdraw ETH), we’ve already achieved most of the utility we intended to get from ComeSwap with far less effort. But because the UI we’ve already designed is so much fun (seriously, check out this demo), we feel compelled to ship it as resources permit. If you’re interested in helping out with this, please get in touch!

SpankBank v2 — The BootyCall

We have also been doing research on the SpankBank v2, which will include the BootyCall mechanism to incentive BOOTY stability and maintain its $1 peg. As we wrote in our update last year, the BootyCall works by forcing stakers to burn their excess BOOTY when the price drops, slashing the SPANK of any staker who fails to do so, holding them primarily accountable for the decrease in price.

Inspired by a thread on the Ethereum Research forum, we plan to use a PID controller to adjust the BootyCall rate based on the BOOTY price. As the price of BOOTY drops, we want the BootyCall rate to increase fast enough that we quickly return to $1, but not so fast that we overshoot and cause the price of BOOTY to go above $1. Tuning the parameters of this controller will be a fun exercise in combing control systems theory, computer science, and monetary policy, fields that until now had very little academic overlap.

We’re optimistic that one day, aspiring central bankers around the world will learn about the SpankBank in their textbooks as an example of bold technical leadership in implementing real-time macroeconomic policy.

This is your time—Join us!

SpankChain is hiring front end and full-stack developers! If you want to join an elite team building sexy, self-sovereign financial infrastructure for the adult entertainment industry, please get in touch!

We’re also looking for adult industry merchants to join our SpankPay Merchant Network and accept crypto through our service (with incentives available for earlier members). Help us spread the word!

Connect with SpankChain

For more information about the SpankChain project: