Free Ton is a decentralized project and we want to create fully decentralized solutions. StableCoins can become one of such solutions. On December 14th, user @vatic made a proposal to create a StabeCoin for Free Ton. What is StableCoin?Support the author
Stablecoins are cryptocurrencies designed to minimize price volatility by having a price ratio with some “stable” asset or another index. A stablecoin can be pegged to cryptocurrency, fiat money, or goods (such as precious metals or any other price index that provides stability). It is believed that stablecoins that can be redeemed in currency, commodities, or fiat money are protected or have some rationale behind them, while those associated with the algorithm are called seigniorage. Stablecoins have quickly evolved into a powerful DeFi component that plays a key role in this modular ecosystem.
There are three main types of Stablecoin.
The first type of StableCoin is fully backed by reserves in the national (fiat) currency (gold or other precious metals). For example, Tether (USDT) is pegged to $ 1 due to full support for local currency reserves.
The second type is StableCoin – Supported by other cryptocurrencies (in seigniorage style). For example, Dai (DAI) is backed by cryptocurrencies like Ether (ETH). Its cost is pegged to $ 1 through protocols governed by DAO member voting and smart contracts. DAI is a decentralized stablecoin backed by cryptocurrencies.
The third type is Algorithmic stabilization without support. Participants can offer such a token/function (a smart contract that will be stable to anything outside the TON blockchain, and will give some kind of guarantee that using this token/function is possible to obtain an asset that will be stable to some external factor, in other words:
The change in supply and/or demand for the TON token will somehow be tied to the external change in price reflected by this token, so any changes outside or inside must be balanced to maintain stability.
Accordingly, the main idea of the contest is to create a technology that will reduce the price volatility of a cryptocurrency.
Basic conditions of the contest:
All possible technical solutions developed before this contest in the Free TON network can be fully used to implement this technology. (Example: Atomic Exchange, Free TON Bridges, Free TON DEXes, etc.)
The result of the contest should be a technical document describing the proposed architecture. Images, diagrams, illustrations, and any other visualization information will be a bonus. An even bigger plus will be the economic model of implementation.
It is possible to use other * real * assets, linking to which may be appropriate. The contest is not limited to the creation of the $ 1 stablecoin. It can be either a 500 euro banknote or gold or other precious metals.
The application must include a basic economic model and descriptions of the turnover of funds in the system. General architectural considerations, including all of the features listed below in the stringent criteria section, and a suggested way to use. (Buying StableCoins \ borrowing \ Saving \ CDP creation)
The work should be realizable, not an abstract idea from the future. The elements of work must not contradict each other and the Free Ton Declaration on Decentralization.
A proper security mechanism must be created.
The mechanism for managing StableCoin parameters should be described, even if such a mechanism is added at secondary stages of implementation (this is not a mandatory item, since there may be protocols that will work without such a mechanism. But it would be a good bonus when evaluating).
When describing the first type of StableCoin (Type # 1), the emphasis should be on legal issues. The Bidder must be a bank or financial institution that has the rights and licenses to engage in such financial activities or has legally validated agreements with those institutions, OR prove in another verifiable way that such a proposed solution is feasible.
The first, second, and third places are expected to be awarded 50,000, 30,000, and 15,000 tons.
The results of the work of this contest, if it successfully passed the voting, can become the next stage in the development and strengthening of the cryptocurrency ecosystem. As a consequence, it will attract even more attention and new investors and users to Free Ton.
You can discuss this contest on the forum at the link.