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JoelKatz

Suggestion: XRP-collateralized Stablecoins

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Ripple itself could be the issuer of a XRP backed stablecoin. They have enough XRP in reserve to back the stablecoin. Ripple could pay 2% interest p.a. to everyone holding the stablecoin. This would help to distribute XRP to the community. In the early XRP distribution strategy plan on the official homepage, users was on top of the list.

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Posted (edited)

Two comments:

1.  How will your stablecoin implementation be superior to the MakerDAO / DAI setup which is what I thought of first when I read your proposal?  They have VERY HIGH fees and we need to make sure XRP stablecoins avoid that same fate.

2.  I strongly suggest we try to get XRP included in PegNet (check out PegNet.org) as their implementation doesn't require collateral or fees and I'm hearing some decent buzz surrounding it.  OR, build something similar as I think it may be superior to collateralized stablecoins.

Edited by MikeH

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One of the original use cases for the XRP Ledger (since 2012) was using the built-in decentralized exchange to exchange between stablecoins and to exchange stablecoins for XRP. Currently, only stablecoins that have a backer/issuer are supported.
We propose adding a collateralized stablecoin feature to the XRP Ledger. The key distinguishing property of this proposal is that the stablecoin is always redeemable for XRP on the ledger from the collateral pool. So, for example, if you hold one unit of a USD stablecoin, you can make on-ledger payments at any time just as if you held $1 worth of XRP.
We propose a scheme as follows:
  • Anyone may place XRP into a position that they own.
  • If the position is sufficiently collateralized, it may issue a stablecoin.
  • Position owners may adjust the XRP in their positions so long as it maintains sufficient collateral.
  • Position owners may issue and redeem stablecoins in their positions so long as it maintains sufficient collateral.
  • Severely undercollateralized positions may be taken over by re-collateralizing them -- whoever does so keeps the remaining excess collateral.
  • An order book mechanism will be used to permit the stablecoin to be automatically exchanged for XRP by redeeming against the least collateralized positions first.
  • This encourages over-collateralization and cleans up positions that are in danger of becoming under-collateralized
Pathfinding will be augmented to use redemption against the collateral so payments with a stablecoin work the same as if you held the corresponding amount of XRP.
The scheme is not perfectly decentralized because some organization or federation still must supply the price the asset is pegged to on a continuous basis or the stablecoin will freeze. That organization can set a reserve ratio that they can use to tax the stablecoin system or to provide a reserve to buy out under-collateralized positions.
The most obvious application is a stablecoin pegged to a fiat asset such as the dollar. However, stablecoins can also be pegged to the value of precious metals, stocks, indexes, and so on. 
This post is one suggestion for an enhancement to the XRP Ledger. See this post for context:
https://www.xrpchat.com/topic/33070-suggestions-for-xrp-ledger-enhancements/
You can find all the suggestions in one place here: https://coil.com/p/xpring/Ideas-for-the-Future-of-XRP-Ledger/-OZP0FlZQ 

Seems like you are second


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17 hours ago, yxxyun said:

this is IOU on binancechain if I understand correctly. 

I think you're correct, however, it sounds like the XRP IOU's will be backed by the underlying XRP asset. The XRP that's backing the IOU's will get removed from circulating supply since they're being locked up (I would assume) in order to collateralize the IOU's. However, not sure what price and/or liquidity effect trading the IOU's will have on the underlying XRP asset. Maybe @JoelKatz @warpaul @nikb @mDuo13 could opine on how this IOU system would work and what potential liquidity impact the XRP IOU will have on the underlying XRP backing the IOU. 

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Making stable coin using xrp as the collateral is an awesome use case.

however, 

Binance seems to be using BNB coin to pegg the value of other digital assets. This makes the BNB wallet as a Dex, and could increase the liquidity of BNB coin significantly considering they are the dominant player, most of the investors have account with them.

I think binance is trying to achieve IoV in their own method. And it’s quite threatening. 

Any reason why ripple is not building their own Dex? 

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Posted (edited)
9 minutes ago, Sukrim said:

They built one in 2012, it is called XRPL.

But it’s just the ledger with capability of making Dex. 

There is no wallet for xrp that functions like Dex, is there? 

Edited by quan

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4 minutes ago, Sukrim said:

Sure there is, there are multiple ones. Also a lack of useful clients doesn't mean that something doesn't exist.

I don’t believe there is a polished dex app for xrp that can be commercialized, marketed. 

 binance is in the position to dominate dex market. I’m pointing out that Ripple could be missing out the opportunity in the Up coming trend.

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They were banned from helping anyone develop clients for a few years as part of their FinCen fine/agreement. GateHub runs a closed source wallet app for years now so successfully that people often seem to think they are an exchange...

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18 minutes ago, Sukrim said:

They were banned from helping anyone develop clients for a few years as part of their FinCen fine/agreement. GateHub runs a closed source wallet app for years now so successfully that people often seem to think they are an exchange...

Could Bitrue be an xRapid partner, with their token experiencing similar success to BNB? I still think it's nuts that they didn't issue their token on the XRPL, especially with so many XRP base pairs 

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Posted (edited)
1 hour ago, Sukrim said:

They were banned from helping anyone develop clients for a few years as part of their FinCen fine/agreement. GateHub runs a closed source wallet app for years now so successfully that people often seem to think they are an exchange...

Yes true for gatehub. People don't realize gatehub is a wallet.

 

I have a question, for the engineers.

 I'm an artist who wants to open a business that sell digital art file within xrpl dex, that enables renting the file or buying&selling the right of the ownership. I should also be able to issue copy editions of the digital art that self destroys after promised period.

In this case, How should I store and trade digital art that is fundamentally digital and valued digitally in xrpl?

I like to hear from engineers' point of view.

 

Here is what I thought. Case for Digital painting (or 3D sculpture,  digital visual works, even meme) wallet platform.

 

1. There should be an immutable cloud server that stores the original art. And a wallet that grant access to the server.

2. The original art file stored in the immutable cloud is tokenized into single coin that represents the art.

3. The coin is also the only key to access the original art in the immutable cloud server . 

4. The coin that represent the art piece behaves same as other  digital coins. It can be transferred to other 'wallet' or stored.

5. The 'wallet' has smart contract function implemented. It enables users to issue sub-coin of the original coin with  certain restriction or condition that seller and buyer agreed upon.

6. The sub-coin is granted with access to the art as long as the sub-coin is in the wallet until the contract expires. 

7. When the owner of the original coin sells the coin or removes the coin from the wallet, the right of the ownership also transfers to the new owner of the coin. Previously issued sub-coin is not affected even if the original coin owner is changed. 

8. The sub-coin is tradable before expiry 

9. When the original coin is destroyed (burned) the sub-coin is erased as well regardless of the contract expiry, eliminating the access to the associated artwork forever immediately. 

 

Can this be realized on xrpl?

 

 

 

 

Edited by quan

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Posted (edited)
On 10/2/2019 at 11:39 PM, JoelKatz said:

The advantage is that if you hold XRP directly, the value of what you hold changes over time. Some people want that, some people don't.

If you block an amount of a particular asset for any kind of emission (of a stablecoin) there is no workaround (instead of price fixing from the government) to supress the volatlitity of this asset/backing. You can - and that is what I read out of your answer - block at most more of this asset than would actually be necessary at the time of valuation in order to suppress a significant impact of its volatility on the emission, which means that you would (need to) block a much higher amount of variable valued XRP in order to ensure a halfway sufficient backing of the fixed valued emission (of the stablecoin) which unfortunately still would not be sufficient to garantuee a permanently safe backing as history proves. This is one of the most fundamental problems regarding emissions and financial crises, central banks policy, etc. - and the reason why there actually is no "stable" asset of any kind (and therefore no safe stablecoin, ofc).

Usually, the issuer should deliver the corresponding collateral, otherwise its issue loses value. Afterwards, the issuer/market would have to be constantly or regularly audited in order to ensure that his backing is sufficient over time.

What happens, if it is not sufficient anymore? Are there any kinds of sanctions involved?

Edited by tar

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