A US-based startup, working in the real estate domain, realized that there are far too many “stablecoins” in the market that pretend to be stable in terms of value, but none of them are definitely stable. The reason for this is that their prices are volatile in secondary market. As a result, the client wanted to develop a truly stable stablecoin which doesn’t have price volatility even in the secondary market, and also offers the highest level of liquidity.
Business Needs
Algorithm-Based
The problem with asset-based or fiat-based stablecoins - ones that rely on either some valued asset or currencies like USD, GBP, etc. - is that their value depends on the underlying asset. They’re not truly stable. And these are most of the “stablecoins” available in the market. The client wanted stablecoin that is not dependent on volatile assets. Algorithm-based is what is required, and there are very few algorithm based stable coins in the market.
Stability Protocol
Client wanted to eliminate any possibility for volatility. The business required a protocol which could not only enable stability with price but also make it truly decentralized and non-collateralized.
Liquidity Protocol
Liquidity is one of the most important components for making a stablecoin stable. The business required a hybrid collateralized/non-collateralized system dynamically managed by machine learning based on fractional reserve multiplier effect, the same method used by modern banks to create liquidity.
Cross-Chain Stability
The stability protocol shouldn’t be limited to one network but should work cross-chain. It should seamlessly work between Ethereum and Bitcoin and also through protocols or smart contracts that are on Ethereum network.
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