The world’s independent stablecoin

self.ethereum1m ago
**Intro** Stable-value crypto assets are an essential building block. However, the vast majority of them is in the form of fiat-collateralized stablecoins like Tether (USDT) and USD Coin (USDC). Centralized stablecoins compromised themselves by freezing wallets. This does not correlate with the future of decentralization. Centralization is an attack vector. We want permissionless and decentralized assets in crypto. We were fans of DAI when it was Ethereum-collateralized, but at this stage, DAI is 50% collateralized by USDC. A supposedly decentralized stablecoin that is primarily collateralized by a centralized stablecoin (FACEPALM). The urgent need for a true decentralized stablecoin! Algorithmic stablecoins, which maintain their pegs without collateral, are either a fool's errand or simply a matter of time. **1. Problem** Every existing stablecoin faces a trilemma. It is impossible to be Decentralized, Collateralized and Capital Efficient at the same time. ​ All stablecoins in the crypto ecosystem fail in one of these three key features, whereas Picoin has novel solutions for all three at the same time. **2. Solution** Picoin solves the stablecoin trilemma: **a) Decentralization.** Picoin is truly decentralized and free from the control of governments or banks. Users will never interact with any centralized entity. **b) Collateralization.** Picoin uses a new approach to collateralization - crypto conversion. It is an irreversible transfer of the value of one cryptocurrency to another. While cryptocurrency can be transformed, the total amount of value does not change ­– this is called value conservation. **c) Capital Efficiency.** Unlike all decentrilized stablecoins that require more than $1 of crypto assets (sometimes $1.50+ of assets) to mint $1 of a stablecoin, Picoin users can mint 1 PI for 3,14 USD worth of crypto assets. Picoin does not require any over -collateralization. **3. Crypto conversion** Crypto conversion is a new approach to collateralization. Crypto value can transform from one cryptocurrency to another – but the total amount of value is always conserved, i.e. it stays the same. Simply put, to release one crypto, you need to burn another. ​ Innovation inspired by energy conversion. As an example, solar technology converts sunlight into electrical energy, but cannot convert electrical energy back into sunlight. This is a rough example, but it perfectly describes the irreversible conversion process. But wait, what's the point of burning crypto? Well, there are several use cases for this: **a) Reduce the circulating supply.** There are many coins/tokens with unlimited supply. To reduce inflation, they constantly need to be burned. Why just to burn them when you can contribute to building a stable crypto future, issuing an independent, secure and truly decentralized stablecoin!? **b) Staking.** Stakers can stake their cryptocurrencies to receive rewards in stablecoins, while rewards in the native crypto will be burned. **с) Clearing the market.** There are a lot of projects that don’t bring any value. The tokens of such projects could also benefit a stable crypto future by being converted into Picoins. **4. Leaving the dollar standard** To build an independent crypto future, we have to move away from the dollar standard. After nearly 80 years of dollar dominance, that status could come under threat. We see that it has become an economic weapon of mass destruction. The US detonated this weapon on Russia after the country invaded Ukraine, freezing $630 billion worth of forex reserves. But with great power comes great responsibility. When you use a weapon of mass destruction, even an economic one, people get spooked. To protect themselves from the same fate as Russia, other countries diversify their investments away from the US dollar into other currencies. Now, we don’t know what’s going to come next, but what we do know is that the current situation is unsustainable. If and when the dollar falls, cryptocurrencies must lose all value. People will run to gold and silver in that case, and not to crypto. Therefore, we need our own independent, stable currency on the blockchain! **5. Picoin** The key property to have in a robust and defensible stable currency is a focus on simplicity and mathematical purity. Pi - is the most important constant in Mathematics. It’s practical and it makes many mathematical and physics equations easier. As long as the dollar is stable, picoin will always be worth $3.14, and issued at the current price according to the formula: ​ In the future, picoin will be issued directly at the current price: ​ **6. Picoin DAO** First of all, Picoin DAO is an open community, governed and built by the community. Radical transparency is one of our main values; anyone can come and see what we are building. You are also free to contribute to the project (and get rewarded!), just join and engage with us. The intent is for the DAO token to be distributed to the early users, protocol builders, and project contributors in a fully transparent way. There is no token sale, no private investors and no VC fund behind Picoin. A major portion of tokens are reserved for the DAO and treasury reserve to form powerful community governance among Picoin users. **Conclusion** Decentralized economies need decentralized money. Regulators are going to get ever more aggressive in regulating centralized stablecoins and then running them essentially like banks. With that in mind, crypto enthusiasts should view fiat-collateralized stablecoins with deep skepticism. Instead, we should be championing decentralized solutions that are free of dictatorial governments or organizations. The long-term potential of the independent stablecoin will be its ability to completely replace the US dollar and other fiat currencies in the crypto space.