Terra Gold

General
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I think we should launch a Gold linked stablecoin that works through the core mint/burn mechanism. I know we have mIAU currently but doing it through the core mechanism would offer so many benefits…

  1. mIAU does not have enough liquidity for large scale use. The on-chain swap function would be far more useful, and make the asset far more useful for wider adoption.

  2. Terra gold would be easier for applications to integrate, as almost any dapp is already integrating UST, doing Gold through the same core mechanism would make things simpler for them.

  3. Leveraged gold trading. Applications could more safely offer leveraged gold trading because they know there is enough liquidity through the on chain swaps to safely facilitate liquidations.

  4. Attractive reserve asset for DAOs… I could imagine DAOs allocating a portion of reserves to Terra Gold for long term store of value properties that are not correlated to crypto. This would also take some pressure off of Anchor earn, as investors could choose to allocate some funds to gold for inflation protection.

  5. Gold lending, borrowing, yield hacking. We have already seen the yield opportunities for stablecoin yield and liquidity. We could see a small reflection of this in gold. Even partnering with other gold linked projects and LPing with them on Curve for stronger liquidity and wider adoption. Essentially mirroring parts of the stablecoin story we have already seen play out.

Thoughts?

10 Likes
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Excellent idea

There is certainly demand for gold on a blockchain.Paxos Gold (PAXG) has a $430M market cap as a centralized ERC-20 product. It’s currently trading at a $40 premium.

Gold can also provide a native on chain inflation hedge that people trust. If become fearful of the dollar, they could seamlessly switch from UST into XAUT (Terra Gold) within the ecosystem.

Fully decentralized 1:1 pegged gold is something that would likely attract investment and interest outside of the usual cryptocurrency markets.

5 Likes
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Here in Western Australia, we also have the Perth Mint that offers PMGT (Perth Mint Gold Token) an ERC20. The tokens are redeemable for Perth Mint gold certificates that allow full self-custody. They mostly trade on Independent Reserve an Australian CEX but you can find some on DEX’s also. Coudl be another option.

https://pmgt.io/

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The lack of replies and enthusiasm to this idea suggests people are not yet seeing it

Gold is an $11 trillion market cap asset and there’s huge potential for demand / price to explode in the face of inflation and geopolitical concerns.

Imagine Terra/LUNA being able to tap into this demand, especially as premiums rise and there are no decentralized alternatives?

An interesting technical and fundamental review to get the appetite going.

1 Like
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That’s a good point. It is kind of like the protocol going short Gold, which maybe isn’t as wise of a bet to make as being short fiat.

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Had another thought regarding a benefit…

A large pool of tGold/PAXG on curve could further diversify the peg of our ecosystem. Investors would be thrilled to get even a small yield on gold price exposure.

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So big question is:

Will the market cap of a gold-pegged stablecoin outweigh both the inflation of UST, and the price appreciation of gold?

Other things to think about:

  • Given that gold is not used for transactions in exchanges like USD, we need to figure out an oracle for it’s price that is reliable. Could the oracle compromise Terra maliciously? (Luna could eventually be a competitor to gold, just like Bitcoin is now)

  • Will the popularity of such a coin reduce the potential price of gold? Perhaps this is not an issue as USD/UST will eventually beg the same question.

  • Is there a better inflation-hedge commodity we can add? Gold is definitely the most used globally, but if we can change the course of the macro, we should pick a more ethical commodity. BTC is more ethical, but it’s currently more volatile.

  • In terms of names, we should follow the existing format of UST, KRT, etc. Something like $GLDT

Another thought, but not sure that it poses any questions:
Since gold appreciates over time, gold loans against Luna, ETH, etc are riskier than fiat loans.

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Not big brain enough to understand the potential complexities of having a gold-pegged stablecoin but if its feasible and not damaging to Terra i’d love to see it. During questionable economic times like we are currently in it’d be a nice hedge against fiat currencies

1 Like
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extremely based idea. this should seriously be considered

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Lets assume the dollar will fail, as all fiat currencies tend to do eventually.
The oldest fiat currency is the British Pound Sterling (1694) 317 years.
Real commodities such as metals, and other raw elements, never fail.
The Gold market is approx 6.000 years old, or >11.000 years depending where your beliefs lie about the account of history in myths and folklore.

I don’t know if its just my doom thinking, but it seems to me major changes in the world are looming.

  • A huge economic crash, and the failing of the world coins USD EUR YEN INR …
  • A World War
  • A New world order
  • A Reset of the economy, under a single coin, a centralized inflationary crypto world coin.

I find it extremely “American” to call the United-States Dollar “Terra” , a word that is supposed to mean “planet earth”.
USA is not planet earth, Gold is earth, silver is earth, metals and raw elements are earth.