Request for proposal in order to create a stable currency.
If you vote 'yes'; then, you request the core team to create a stable currency.
If you vote 'no'; then, you think it's not necessary.
If you vote 'abstain'; then, you don't know.
https://www.dropbox.com/s/7gy5at2kjytd044/The Dash Dollar.pdf?dl=0
That would be amazing, difficult, expensive and possibly impossible. There are presently three kinds of stable coins in the crypto ecosystem.
1. The crypto is backed by US dollars 1:1. Tether does this (in theory). So if we want to do it like Tether, we need to come up with 1.9 Billion dollars, and very likely a centralized entity that runs it, manages publicly available audits and so on. Where are we going to come up with a Billion or two dollars?
2. A stable crypto that is backed by another crypto or basket of cryptos. This gives up a substantial amount of value stability because the USD (sorry as it is) is pretty much the most stable thing out there. To compensate for that, the backing crypto is generally over collateralized. So, for example, if you wanted to issue 10 million Dash Bucks, we would have to purchase and sock away 20 million dollars worth of Ethereum. So that turns out to be even more expensive to set up, and the market can "break the peg" if it goes down by more than half. Has that ever happened? Yes, more than once, and very likely to happen again.
3. A stable crypto that is not backed by anything, except the expectation that it will work just like expanding and contracting the money supply of the US dollar to maintain stability. These typically use seigniorage accounts that use algorithms to make more Stable Bucks, or destroy Stable Bucks, depending on what the market is doing. If they convince enough people, then it will work. Ultimately, money is a social contract where we all agree that this unit (like a piece of paper with a green picture of Andrew Jackson on it) carries a certain amount of value/buying power. IF the social contract works, where enough people agree and believe, it is not really much worse or much better than how any given fiat currency holds its value.
It has the slight advantage that there can be open source controls that put meaningful restrictions on how much money can be printed. It has the huge "disadvantage" that the creators/developers can not force a big group of people to use it with violence/guns/threats. Adoption of social contracts for money tend to stick "better" if somebody will put you in a cage if you fail to use it. Even that has limits, as witnessed by Venezuela and a host of other countries who ruined their fiat money, even with the threat of violence to back it up.
Here is a very accessible article that describes stable coins and their strengths and weakness:
https://medium.com/@argongroup/stablecoins-explained-206466da5e61
There have been many many schemes over the years to peg currency A to currency B or some other stable thing. In the vast majority, the peg has been broken by the open market sooner or later. Even the mighty U.S. dollar has hit a number of rough patches in the last 100 years. It used to be partially backed by gold. Because you can't just print up a bunch more gold if you suddenly need more to expand your economy, or go fight a war that's how they maintained the buying power of the paper dollar. You could actually go to a bank and trade it in for a real chunk of gold.
The government found that constraint to be too restrictive, so they sort of went off the gold standard in 1933, and we totally abandoned the precious metals backing under Nixon in 1971. Note that the US dollar has lost 86% of it's purchasing power since 1971. And it's the best of a bad lot.
Whew, so here's the take home point. We don't have the money for methods 1 and 2. And for method 3 to work, a whole bunch of people in and out of the crypto space would have to hold hands with the Dash community and sing Kumbayah together every week. If we miss a week and the doubt and rumor mill decided they don't trust it, your stable coin goes the way of the Venezuelan Bolivar.
So, which method would you recommend that Core try?
I don't have an advance degree in crypto econ, or even Keynsian economics. But I have studied the mechanism of stable coins a fair amount recently. Making a stable coin in which the peg to a certain amount of buying power cannot be broken, is very nearly as hard as making a perpetual motion machine. But hey, I've been wrong before, and there are a lot of very smart people in the crypto space thinking about stable coins. I would be ecstatic to be proved wrong.
In the short and medium term, an easy decentralized on/off ramp to USD accomplishes many of the goals of a stable coin without all the expense and work, but then we're back to never being better than the USD in terms of purchasing power.
