I understand why smart chains have been stigmatized, but how is an inherently custodial ecash system any better?

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We honestly see it as a very rare view, proportionally. We are using planning to use one of smartchains for their intended purpose - distributed computing with reliable network-wide consensus. While Community Vouchers is the primary driver to use a smartchain, it'll also solve other problems:

- namespaces for users and groups, that protect from MITM attacks - if operators host names, as in federated designs, it's impossible to protect from them.

- public server registry with operator trust and reliability metrics, without any central authority as with Tor, for example.

And there won't be any minting activity by the operators - they will run full non-validating nodes on blockchain, and will act as decentralized RPC layer to blockchain (which is a weak link for most chains), letting clients to have multiple independent views onto chain for important queries (such as name resolution).

This is a really big innovation, and most users don't see it - they think we're going to use what exist.