Harmony Stablecoin Idea

HarmonyHarmony
$0.04441
‑7.14%
self.harmony_one5d ago
I’m not a tech whiz by any means so idk if this isn’t even possible for one reason or another, so I apologize if this is dumb, but I had an idea: Since Harmony wants to be "The Bridge to All Chains" what if Harmony creates a stable coin ($X) backed by an equal percentage of all native coins bridged to the Harmony blockchain. For example if Harmony is bridged to 10 different coins, then each would contribute 10% or $0.10 toward each $1 of $ONE purchased. The purchased $ONE is then either sold or locked to mint the stablecoin ($X) The constant buying and selling of all native coins for $ONE and back would burn a lot of $ONE in transaction fees. But this is not done to maintain the peg of $ONE. $ONE is merely the currency used to trade for/mint $X This method also theoretically adds far more security. It adds the security of centralization (without actually being centralized) with $ONE as the central hub in the transaction, but also the stability of decentralization because all bridging chains contribute equally to the minting of $X, with $ONE just acting as the middle man/insulator. I feel this “insulated decentralization” differs from $LUNA and $UST because in that scenario, the stablecoin $UST was at the center, with one coin (Luna) responsible for maintaining the peg. With my idea, $ONE would be at the center, with all associated coins responsible for buying $ONE which is then also bought and sold accordingly in the same way to maintain the peg for $X Keep in mind that the associated chains are not trying to maintain the peg of $ONE, so the price of $ONE isn't a factor. It's just the middle man that is swapped for ($X) Even if $ONE was attacked directly, holders of the native coins could trade against $ONE for a profit. That, combined with ppl just buying the dip and/or trading $X for $ONE would help achieve equilibrium much faster and with far less pain. In theory, the only way a LUNA/UST type crash could happen to $X is if the same attack was committed on $ONE as well as all the other chains in the orbit at the same time. The capital required to do that would be exponentially harder to amass and coordinate, and the more chains that entered the Harmony orbit, the truer that would get. Maybe even add a failsafe that the current amount of $X minted can never exceed 50% of Harmony’s TVL. Potentially annoying I know, but only temporarily. Plus I’m sure the Luna/UST victims would’ve preferred this scenario. And the higher Harmony TVL got, the less of an issue it would become. As another potential fail-safe. Maybe program it so if the price of a coin on the Harmony blockchain is dropping disproportionately more than the rest, then it is temporarily cut out of the system trading algo (it can still be traded independently by anyone who holds it on exchanges and whatnot. just not automatically by the algo) At which time the remaining 9 coins in the Harmony orbit would share 100% of the burden for purchasing $ONE ($0.1111 each instead of $0.10) which would reduce the circulating supply of those 9 coins, raising prices, motivating holders to trade for $ONE, which would put buy pressure on $ONE, raising the price. So instead of the crash/bounce that Luna/UST had. It would be more akin to a rock in a pool. The initial wave is felt by whatever coin is being attacked, but dissipates and ripples out to a lesser degree to the other ones then comes back and each subsequent wave back and forth absorbs momentum and gets smaller and smaller until the water is calm. This also provides incentives for projects to want to join the Harmony blockchain and participate in the stablecoin orbit because it will give the price of their tokens less volatility. The more stability, the more projects will become interested, the more secure the orbit gets and so on. It also encourages people no to crypto to invest in Harmony-related projects because less volatility = less risk = better investment. Plus with $ONE’s soon-to-be 1s finality, not to mention a name like HARMONY ONE, who better to make it happen? Again, I’m by no means a computer whiz so if any or all of this is teotally wrong I’d love to know how. Like I said, it’s just a thought.