2 years ago
BitMEX co-founder Arthur Hayes has projected a Bitcoin-backed dollar-pegged stablecoin NakaDollar (NUSD) which would beryllium backed by $1 Bitcoin and 1 inverse perpetual swap of BTC against USD.
In a March 8 blog post, Hayes said the stablecoin would not trust connected USD reserves oregon centralized entities similar banks. Instead, the NUSD volition beryllium backed by derivatives exchanges listing liquid inverse perpetual swaps.
“If this solution were embraced by traders and exchanges, it would pb to a ample maturation successful Bitcoin derivatives unfastened interest, which would successful crook make heavy liquidity.”
The operation of abbreviated BTC positions and USD inverse perpetual swaps ensures that nary substance the worth of Bitcoin, the dollar worth of the stablecoin volition stay stable.
Hayes suggests DAO
Hayes noted that the NUSD stablecoin plan volition inactive beryllium centralized, lone that the dependency would beryllium connected centralized crypto derivatives exchanges alternatively of hostile fiat banks.
Meanwhile, the connection besides stated that the archetypal measurement towards creating NakaUSD is establishing a decentralized autonomous enactment (DAO) with its ain NAKA token. The DAO volition beryllium liable for the governance and operations of the stablecoin.
How NUSD would beryllium created
Using mathematical calculations, Hayes showed however the stablecoin would stay unchangeable contempt the market’s volatility. According to him, creating 1 NUSD would impact depositing $1 Bitcoin connected a derivative speech and past shorting it connected an inverse perpetual swap.
Hayes explained that lone a fewer individuals oregon firms could make and redeem NUSD straight from the DAO. He added that the NAKA governance token and NUSD would beryllium based connected the Ethereum blockchain.
Hayes believes his attack would make dollar-pegged stablecoins that wouldn’t trust connected the dollar. It allows the synthetic instauration of “USD equivalent, without ever touching USD held successful the fiat banking strategy oregon a stablecoin successful crypto. It besides does not encumber much crypto collateral than it creates successful fiat value, similar MakerDAO,” helium explained.
If successfully implemented, NUSD volition interruption the reliance of stablecoins connected the US dollar and the request to find crypto-friendly banks. This would beryllium a invited improvement for the industry, which is inactive smarting from the caller regulatory efforts to curb accepted fiscal institutions’ vulnerability to crypto.
BitMEX corroborated Hayes’ view. The speech wrote:
“Using NUSD vs. different stablecoins would region a cardinal pillar of crypto FUD which allows for much trading due to the fact that traders would nary longer beryllium disquieted that they mightiness get stuck with a clump of stablecoins that they cannot redeem for 1:1 of their USD value.”
The station BitMEX co-founder Arthur Hayes proposes Bitcoin-backed stablecoin ‘NakaDollar’ appeared archetypal connected CryptoSlate.
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