Stablecoin issuer Tether and the Swiss city of Lugano are continuing their partnership to promote mainstream blockchain adoption across the city and the wider region. According to a press release, Tether is partnering with Lugano-led 3Achain to help expand its blockchain infrastructure.
3Achain is the official blockchain promoted by Lugano for its Plan ₿ initiative, and used as the backbone for its native stablecoin, the Luga. Tether will now host and manage a validator node for 3Achain and play an active role in its expansion.
3Achain is designed as a ‘triple A’ blockchain and overcomes the blockchain trilemma originally identified by Ethereum founder, Vitalik Buterin. This states that of the three fundamental principles of the technology (security, scalability and decentralization), only two can be simultaneously provided in any one blockchain.
The way that 3Achain gets around this is by being a permissioned blockchain. Public permissionless blockchains allow almost anybody to set up a node, and hence need to run sophisticated consensus algorithms to prevent the potential harm of a bad actor. However, in a permissioned blockchain, all node owners must be approved in advance.
This allows a Proof of Authority consensus to be used. While this does arguably affect the decentralization of the network, this can be somewhat offset through the selection of a large variety of node owners who are trusted and known to be neutral regarding the blockchain.
3Achain’s partners comprise of a number of institutional bodies, national and international companies, and universities and research institutes, all participating on a voluntary basis. This allows 3Achain to scale efficiently and securely. It is based on the ConsenSys's Quorum open-source fork of the Ethereum, and is anchored to the Ethereum blockchain on a daily basis.
3Achain is a non-profit organization, and one of its aims is to enable other organizations that need to use blockchain technology to do so quickly and with little cost. It offers a free 12-month trial with unlimited use of the testnet, followed by a 2-year mainnet starter package with unlimited API calls, assets and transactions for just 1000 CHF per year ($1140).
Lugano’s Plan ₿ initiative launched in spring 2022 with the announcement of a partnership between the city and Tether. This saw the launch of the native Luga stablecoin, along with the 3Achain blockchain that supports it.
As well as various promotional initiatives, funds, and a crypto conference, the program has seen over 350 local merchants accepting crypto payments in tether, bitcoin and luga. As we Observed last October, this includes international companies such as McDonalds, with whom you can use bitcoin to purchase a Big Mac in the Lugano branch.
There is a promise to extend this functionality to municipal payments like taxes and parking, although this has been mooted since the start of the scheme, and has not yet been implemented.