There was discussion about whether to bring the USTC peg back to one dollar or create a new stablecoin which and abandon USTC, to bring new demand to the chain, the idea of creating a new stable pegged to a metal was never considered.
The creation of a gold-pegged stablecoin could bring demand to the chain and new interest in lunc. This would not hinder ustc’s repeg, indeed it could benefit from the new initiative. Beyond this would extend the “product line” with real use cases driving interest and demand on the chain. having decentralized stable coins is a challenge to beat and the whole crypto sector would benefit from it.
Who will hold all the gold?
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the stablecoin would be algorithmic. no one has to hold the gold.
And how would that algo work? Can you explain some more
you are right to ask me these questions. but if I knew how to answer I would be a programmer. in the exact same way that ustc should work I assume. I just want the idea to go to someone competent and evaluate it. the underlying reasoning is that it is no different than a stable coin pegged to a currency, only that it hasn’t hyperinflated like ustc and has to be created from scratch, plus it would drive demand and interest for the chain at first indiscretion.
The fact that I can’t explain how this is possible doesn’t necessarily mean it’s a bad idea, which is why I agree with the proposal in the hope that someone “upstairs” will notice it.
I put together a proposal, some time ago, that touches on this topic. It covers several points of the ecosystem. And it raises a possibility of approaching a currency linked to gold.
In some way I raise something similar (but not the same) in that proposal with respect to the value of Gold, and with respect to a higher value Lunc (similar to Lunc A that you raise in another proposal). It is based on other financial and legal reasons, but it is somewhat in line with your previous proposal.
I have not had much time at the moment. But I have the idea to modify my original proposal and give it another approach, incorporating issues that have happened in the last months. And what you raise in your other proposal as Lunc A, I will take it to adjust what I raised initially in my proposal.
I believe it is time to give a strong boost to the ecosystem, incorporating concepts from the traditional financial system, thereby creating greater utility within the chain and facilitating institutional investment.
We will keep in touch. Best regards.
Namasté
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A new algorithmic stablecoin would be problematic as many nations have either banned algorithmic stablecoins that do not have any collateral entirely (Canada, Hong Kong) or banned new algorithmic stablecoins (The US).
We can only work with USTC as for now, it is not banned in the US as only new algorithmic stablecoins are banned, not existing ones.
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Algorithmic stable coin was proved to be useless, it was proved by terra ecosystem itself. Best way to do it is to be backed by real real value and this creates the question…who will hold the gold? It can also be backed by futures contracts in gold but this will create another issues…contract expiration, carrying costs and so on. My point is that for now terra should forget about any stable coins and foxus more on utility…
Gold backed stablecoins:
- Tether Gold (xAUt)
- Paxos Gold (PAXG)
- Goldcoin (GLC)
- Perth Mint Gold Token (PMGT)
- Meld Gold (MCAU)
How much research did you do in reinventing the wheel?
usdc and usdt already exist and yet we are trying to retrieve the ustc peg. Do I seriously have to reply to your comment?
also they are all centralized, having an algorithmic decentralized stablecoin is different.
You literally said it has never been considered.
It has. Many times over.
Having precious metal backing is not a new thing.
It also is the same chicken and egg situation we have now - we have no funds to procure any backing tokens nor metals the same.
So this leaves the question of what in earth are you trying to reinvent here?
Ustc and usdc are not backed by gold even.
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we are a protocol, not a company that has to submit to regulations. “contract expiration, maintenance costs and so on. My point is that for now earth should forget about any stablecoins and Foxus more about utility” none of that if you create an algorithmic stabecoin that works. but then I would like to understand what are you doing here if you think that the algorithmic stable can never work if the value of lunc is strictly dependent on the success of the repeg, otherwise we can consider it a fan token or a meme coin and I hope your best wishes for investments in lunc are not based on this
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Did you read what I wrote???
I very much established that
- The US wants to ban NEW algorithmic stablecoins, USTC would not be affected because it is not a new algorithmic stablecoin but an old one
- All jurisdictions want collateralized stablecoins, which is the focus of some of the repeg proposals. So far, collateralized algorithmic stablecoins like USDD have not been targeted by the SEC.
Dude, read what is written first before making your own claims.
What cannot be done right now is an uncollateralized aglorithmic stablecoin as the proposal establishes because if there is no actual gold, then there is no jurisdiction that would agree to list it.
Tracking gold makes it a synthetic asset similar to Mir and those kinds of assets are what the SEC is after the most , so No.
So, USTC can be repegged (subject to regulations) but the idea of a gold backed stablecoin without actual gold backing it is as of this year, mostly illegal across the most important markets.
how much energy you put into an inconclusive comment.
I mentioned usdc and usdt to compare them to ustc. why do we want a stablecoin still at the dollar if it already exists? to answer with an example parallel to yours.
it was never considered to create a NEW ALGORTHYMIC STABLECOIN based on gold, to revive the chain. I was clearly referring to the ustc repeg discussions. since returning to the peg brings many complications, creating a completely new one (always based on the dollar) does not seem to have the approval of the majority, as a faster alternative you can create a new stablecoin anchored to precious metals, such as gold.
sorry was in reply to @Tynos
it is in italian. translate it.
US doesn’t like ustc. dislikes tornado cash and any privacy oriented protocol. the united states doesn’t even like cryptocurrencies. that doesn’t mean they will disappear. He recently sued Terraform Labs and Do Kwon over the stablecoin we want to peg back to one dollar. I really don’t think what you say can be a problem. I repeat we are a decentralized protocol and not a company on US territory.
could you tell me how to remove the slow mode and be able to answer without waiting 30 minutes?
Since your proposal to make a new stable makes no sense, since the context you put out is:
There was discussion about whether to bring the USTC peg back to one dollar or create a new stablecoin which and abandon USTC, to bring new demand to the chain, the idea of creating a new stable pegged to a metal was never considered.
Backed by metal. Precious or otherwise has been considered and shot down due to logistics and associated costs. I mean - we literally have no funding and having “new token” anything defeats the original point of reviving the chain to it’s former glory.
The creation of a gold-pegged stablecoin could bring demand to the chain and new interest in lunc
Makes a claim that it tries to back up by it’s own merit. Doesn’t actually answer what would be different with this one, as there are myriad of others already. Doesn’t answer any question about funds or who would use it and why.
Thus, you go berserk when your line of thought is questioned and proven to be thin.
I ask again - how much thought did you put into this, before putting it out here?
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I don’t go crazy in the face of any criticism, I assure you. I recognize that I have a lack of skills otherwise I would have undoubtedly written the proposal in an articulated and technical way.
You can safely search the internet for how an algorithmic stablecoin works and you will see for yourself that talk about logistics, storage, and any other talk about issues of a similar nature is useless. I enclose it, taken from the internet, and I will avoid the inconvenience:
“UST said that it is an algorithmic stablecoin: the anchoring is in fact possible through an algorithm based on smart contracts that operates a “mint and burn” mechanism involving, as mentioned above, LUNA.” It is not clear to me why you are talking about a “new token”, when my proposal would be equivalent to expanding the stablecoins offered by the ecosystem. the mint and burn system for maintaining the peg was always going to be with lunc.
I don’t know if on twitter you notice how easily investors get excited, the hypothetical news that “a new stable coin anchored to gold will be launched on the earth ecosystem” I can lightly deduce would make the price skyrocket, this is the one which I assume, as probably others would assume it and the price would suffer for this. beyond the fomo, as the peg would be kept mint and burn means there will be more burn than lunc, less circulating, more capital within the chain, new focus, more speculation and just i think creating something from scratch is easier and quicker than fixing something broken. Now IF it is actually feasible, it would be the most logical thing to do especially because this does not mean abandoning the USTC repeg idea but it would probably make the repeg easier, furthermore the increase in the price of lunc in dollars equates to greater power of purchase of the community pool, as we hold lunc there.
Now I repeat, I have no expertise in the matter, which is why I speak vaguely and deductively, but in line with very clear concepts.
the strong point of lunc are the stablecoins, I propose the creation of another stablecoin, therefore expanding the “products” that the chain offers.
I always speak of an algorithmic system and therefore all talk of logistics and storage makes no sense.
With my topic I would like to attract the attention of someone with the skills, competence and nifluence to reformulate my proposal, make the appropriate improvements and place it in the right table with the right people. Obviously if it is feasible. An if that I can’t unravel, but that doesn’t mean that it can’t be the inspiration for a solution.
Any tangible asset that we would own/procure would need to have housing. Logistics on how to procure it. Security. Insurance. Audits. Associated costs, like I said.
If say we “peg” the stablecoin to a real world asset index price - we would forego such hassle, but we aren’t exactly backed by anything but thin air in this case.
Pre-crash the UST was backed by BTC, ETH and alt coins alike. All these funds went woosh with LFG/later TFL either selling them during crash or steadily been selling/using these assets with LUNA 2.0
Twitter isn’t a good metric about excitement nor a useful gauge on procuring usability and stability.
So current Ziggy proposal or any proposal in similar fashion looks to “back” the peg with algorithms that set a high tax above or below peg, but all these themes are untested and likelyhood of failure exists.
While certainly, taking LUNA 2.0 route is easier, it does come with its own set of issues. Namely - it would be a new AFT without any users and the usecase of it would need time and adaption and a reason to even use them.
However, TC is a open source chain and anyone can make their token/stable on this chain freely. The success of such a token is directly tied to having funds however. Marketing. Partnerships. Listings. Utility!
@GERALDGERALD
This you say, is just one of the drawbacks. USTC still does not ban it because it is “out of the game” for the system… it is not competition for them… as it is only a speculative asset… there is no stability… so it is not competition. But if it manages to be strong again… what do you think will happen? Look at what happened to BUSD… they will keep trying with all those that are competition. On the other hand usdc and usdt are part of the same governments. Those currencies will have no problem for now. Today they hold it, and tomorrow they invent a complaint or something else and bye bye stable.
@Tynos
That is exactly the point. But there are alternatives. As Tonu_Magi puts it. There is also another one which is UPXAU. But we should not put all our eggs in the same basket. The point is to have a stable at the value of gold… and that is backed by a basket of stable in metals (including gold), fiat stable (Terra’s own chain and outside) and strong crypto like btc and eth. The IMF uses this exchange system with other countries. And Terra brought is concept with its stables to set the exchange asset for the validators and the chain itself. This system is more stable than a particular currency. You can take that same concept and extend it to metals and cryptos to give more stability in the face of large market losses and inflation in different countries. Of the gold-backed currencies, the most liquid are the PAXG, UPXAU and xAUt. But the first two are under the government of Australia (the world’s largest gold producer) and the one of Tether in the USA. Therefore the first two would be more reliable (because of their liquidity and the country where they are regulated).
It is the same solution but with a different approach. Based on what you commit above. Instead of having only backing btc… have a basket of diversified assets. If one fails the others compensate… and maintain stability.
And on the other hand, make your basket with assets that hold value indirectly. That’s the whole financial system. It’s like creating an ETF. Or an index of assets. Stable currencies like the dollar or the euro does not guarantee value by itself, and in turn, they are out of our control. They are under the control of governments… which devalue their value year after year. Precious metals assets are the same. The trust is placed in the company and the government that manages those assets. Therefore we do not have control of either asset.
Therefore, the only thing we do is to create parity with those assets. And nothing else. Very simple. In this way, it would be a new stable pegged “to the value” of gold. That is backed by various assets that have a significant value in the financial markets. The way is very simple. You buy those assets and put them in transparent wallets (not like Terra did, that no one knew exactly how much btc you had and what you did with it during the fall). This will give confidence.
It is a stable at “gold value”. This concept has been used by governments when creating financial instruments in local currency but that “government bond” had its value fixed to the dollar. Then the markets, as they cannot get all the dollars they need in those countries, take refuge in these bonds backed by the same government asset but at “dollar value”. This mechanism is known to the traditional financial markets. So it is not unknown as something algorithmic and totally new. And added to the fact that it is “at the value” of something that is a safe haven in itself, such as gold… it would generate a lot of confidence. Since its backing is in a basket of financial assets of great value but that has Gold as a reference to set its exchange value.
To sum up. Some points to keep in mind.
Simply reviving USTC does not guarantee success. But at the same time, it is very risky to depend the entire economics or value of the chain on it.
Reasons.
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USTC lost confidence as a safe and value-preserving asset in its own right. The algorithm failed. And that generates a very large footprint.
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USTC is mostly held by hedge funds. They manipulate the price like any other volatile asset. And they will be the first to withdraw their money as the price goes up… until they withdraw all at once. And the price plummets again. No matter how much of a brake there is.
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In addition to the above, a large part of the small investors will do the same. And why will this happen? Because nobody is going to trust, if there is nothing real of value behind to back it up (just an algorithm and nothing else). And that can “support such capital outflows” when the price achieves the desired objectives of the different investors or speculation funds.
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In addition to the above, governments can manipulate news and regulations. They can place blockades, as has already happened with other stable companies. Therefore, having a stable that is known to be subject to blockades by governments in the future. Since it is not backed by real assets in bank accounts, it would not be a good idea.
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A button is all it takes to prove it. Binance said it is going to look for alternatives to the US dollar. In other government currencies. This is very obvious. One should not have all the weight of value in a government currency. Since if they require exhanges not to use this type of assets, this would be a big problem for the blockchain economy if this affects it. That’s why exchanges look for states with lower regulations or tax havens. Because hindrance and prosecution is a very high potential in governments.
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Having an asset tied to the “value of another asset” but composed of a basket of assets, would be the safest and most value-preserving way to go. Here, there is no possible argument for government blockades. Because otherwise, they would have to block all the assets in the basket, which support that value. And that is very, very difficult to do.
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Therefore, the best thing to do is to look for a new stable one, which includes within the basket other stable currencies “with real parity”. And that ustc can have its parity by another mechanism, but step by step. And if in the future, it is blocked or falls and “goes bankrupt”, this would not affect the economy of terra classic at all. Since it is backed by a basket of assets and they have their real parity with the real world.
Very good. It got very long. Sorry about that.
Namaste
Great idea