Shrem shared details about his crypto film-financing venture with Decrypt in a Cannes interview. Charlie Shrem, Bitcoin pioneer, was at the Cannes Film Festival this Week to launch the crypto film-financing program Defiine. He also had some words about the collapse of Terre’s UST stabilitycoin.
He said that a lot people had predicted the fate of Terra and LUNA. “But at the final analysis, because we were on a bull market it’s like an illustration of our industry.
He distinguished between asset-backed stablecoins like USDC and Tether, the latter of which is well-known for being opaque about its reserves, and algorithmic stablecoins like UST.
Algorithmic stablecoins have been “tried so many times over 10 years; even 2014, people tried to theorize other ideas.”
Financing crypto films
Defiine is Shrem’s latest project. It is based on stablecoins. This digital finance solution is intended to be used by independent filmmakers. It leverages IP and assets against crypto liquidity pools.
Shrem stated that they have found a way to create a stablecoin that is backed by a number of NFTs. Shrem explained that the NFT is a lien on a tax credit, in-film minimum guarantee or negative pickup. It can be used to pay Netflix $3 million if you complete the movie.
President of Glass House Distribution, Tom Malloy (Defiine cofounder) stated that there is a new phase in stablecoins. “You’ve seen what happened to UST. Bottom line is that stablecoins backed with assets are, I believe, still viable.”
Shrem claimed that all Decentralized Finance (DeFi) in the last few years has been based on yields. He said that Vesper and Curve allow you to do vaults, automate market making, and offer a chance for automated market making. But all these yields, 5% to 60%, are based on securities regulations. What other asset is digital? It has value and is the biggest export to the United States. The film industry.
Malloy suggested that the platform might offer an alternative route for tax credit financing of films. A million-dollar film could be recouped $250,000. For a 25% tax credit You have to finish the movie and wait nine more months. Although there are some places that will lend you that amount, it’s a loan at a high rate of interest. They might give you 85%. We have better interest rates and people will have a stablecoin so that anyone can be part the liquidity pool.
Shrem claimed that the platform solves “significant liquidity issues” for filmmakers. “It’s more than ‘Give me $100,000, and I’ll make a movie.’ It is ‘I have a script. I have actors attached. I have a director and a state that will pay me $300,000.’ Why not put that on a protocol. “You’re creating a digital asset already.”
Mintlayer is a Bitcoin sidechain that allows tokenization and smart contract to build the Defiine platform.
Shrem has a long, rich history with Bitcoin and is considered by Bitcoin maximalists to be one of the community’s pioneers and martyrs. He was 24 years old when he was sentenced for helping and abetting an unlicensed money-transfer business connected to the Silk Road darknet market.
He has been a successful crypto evangelist since then through speaking engagements and Untold Stories podcast. Stablecoins are under renewed scrutiny by financial institutions as well as legislators. This could make it difficult for him to sell people the idea of a stablecoin that is backed up with film IP.