TUSD (Terra USD) Algoritmic Stablecoin

Summary

This proposal describe a similar project to Kolibri (https://kolibri.finance) where you use Tezos to mint kUSD a stablecoin built on Collateralized Debt Positions (CDPs) known as Oven (vaults).

Motivation

Defi apps on Terra needs some kind of stablecoin, where its peg can drift [-5%, 5%], it doesn’t mean to be on exact peg, but rather having an assets that follow the USD price with a lot less volatility than LUNA.
Another reason to have a stablecoin is to be used as payment on TX fees and value capture (interest).

Proposal

We need a similar protocol to cTez (https://ctez.app/), or it could be PRISM protocol, a liquid staking version of LUNA which can be used to create vaults where one can mint TUSD paying 3% APY which can be taken from the inflation yield.
From that 3% APY, 1% can be directed to developer funds and 1% to a stability pool (insurance pool) and 1% for TUSD holders.

The system should manage protection parameters like the maximum amount of TUSD that can be minted (security measure), also its collateralization ratio could start at 200% and lower down algorithmic based on LUNA volatility.

Liquidators and arbitrageurs can generate another source of income that can be directed to genesis LUNA holders.

4 Likes

there is value here, +vote

1 Like