Hello. I like this proposal, it has more pros than cons for the IoTeX ecosystem. The ioUSD proposal aims to create a native stablecoin for IoTeX, mitigating risks associated with using external stablecoin bridges.
However, a concern arises that launching a properly backed stablecoin requires substantial reserve assets and liquidity, potentially depleting community resources.
As IoTeX seeks to bridge the real world with the virtual, one solution to address reserve and liquidity issues is to tokenize real-world assets (RWA), such as art, real estate, commodities, bonds, etc., and add them to the ioUSD reserve assets.
This approach offers several key advantages:
Tokenized RWAs bring tangible and long-term value to the ecosystem supporting the stablecoin, enhancing trust.
Asset diversification significantly strengthens the reserve, as it is not limited to just IoTeX’s own IOTX and cryptocurrencies.
Partnerships formed for RWA tokenization benefit IoTeX by expanding usage options and integration.
Secondary markets and liquidity provision for RWA tokens enable active reserve management.
Specific assets can generate passive income, e.g., proceeds from art sales or real estate rentals, providing additional financial support for ioUSD.
Stake rewards in ioUSD for IOTX stakers can incentivize system self-balancing through arbitrage. IOTX stakers can receive a portion of rewards in ioUSD and invest them in fractional shares of tokenized assets constituting the ioUSD reserve.
Strategic use of tokenized real-world assets can provide diverse and substantial backing necessary for a successful ioUSD launch, avoiding strain on community resources. Formed partnerships also contribute to the development of the IoTeX ecosystem. Additionally, income from assets like art appreciation or real estate rentals can drive the adoption of stablecoins.
With careful RWA program development, these assets can both secure ioUSD and generate income for the IoTeX community.
Leveraging tokenized real-world assets (RWAs) on the IoTeX ecosystem as collateral for ioUSD is a compelling idea that aligns with IoTeX’s strengths. Provided that RWAs exhibit sufficient liquidity, this approach could prove highly effective. The optimal composition of RWA collateral would be determined by the ioUSD governance committee.
While RWAs can certainly contribute to collateralization, it’s crucial to maintain a component of IOTX tokens within the reserve. IOTX’s high liquidity would play a vital role in managing liquidations and upholding the stablecoin peg.
I like this idea but at the same time we need to know how the mint price is calculated. We shouldn’t use any third-party oracle we should fetch the price within the ecosystem.
Utilizing Mimo exchange for determining the price of IOTX within the reserve seems like a feasible approach, considering that in mimo’s liquidity pools, wrapped IOTX is frequently paired with other assets. However, for the RWA portion of the reserve, this approach may not be feasible and could require a more sophisticated pricing systems. The effectiveness of this approach will largely depend on the protocols employed to create RWAs on IoTeX.
iChristwin I think you’ll be interested in what Magma Protocol are creating for IoTeX, $IOTX and the stablecoin needs of their blockchain.
The RWA element is perhaps one to introduce as a developmental expansion, and it’s an enticing proposition for IoTeX as a DePin pioneering space. However, safety first must be the watchword there I feel.
A stablecoin based on IOTX collateral, from an immutable codebase as we’ve seen promulgated throughout DeFi with Liquity and forks thereof, would seem like a strong proposition for IoTeX. Especially with the markets turning as they are now. Tying in the RWA aspect would be a cool addition to a resilient protocol design and a way for IoTeX to be a leader along that fledgling RWA/DeFi space - it would sit rather nicely on the border between the two in fact!
(MagmaProtocol on Twitter FYI. I’ll just say that instead of a link, as it might not be permitted.)
Decentralized stablecoins have to be backed by defi in order to flywheel positively. With arguably almost no defi on our chain, it would also be difficult to incentivize users to mint stablecoins, and would be a further blow to the brand image？
I agree with iChristwin that an IOTX native stablecoin is needed to further strengthen and unite the DePIN ecosystem.
A native stablecoin like ioUSD or other names would provide a more secure foundation for developers building in this space. I also see the emergence of DeFi and DePIN as an opportunity to generate yield from real world assets, not just protocol fees. This will further expand the possibilities for the IoTeX ecosystem.
Overall, I welcome and support the idea of developing a DePIN asset-backed stablecoin native to IoTeX. This would align with the community’s needs and priorities, while also mitigating the risks associated with external dependencies. I look forward to seeing the proposals from teams working to make this a reality. A native stablecoin for DePIN assets would be an important step towards realizing the full potential of DeFi and DePIN on IoTeX.
thanks for sharing @iChristwin - I think this is a very interesting proposal, and I agree with some of the comments that it has more pros than cons. Stable coins are a great tool in the DePIN space, and I’m lately very much leaning towards a dual token-economy when thinking of how to successfully craft a DePIN project.
It’s great to see other points of view as well, and I also wanted to mention that our next Webinar episode will be about token-economy. This would be a very interesting topic to tackle as well, I’ll keep you guys posted on the timeline.
@Foxfortytwo I like the RWA collateralization suggestion and, as you mentioned, it would be a great complementary feature to the IOTX backed ioUSD + other prominent DePIN tokens
Hello all. As a long time supporter but non developer, my perspective is a little different. I have a hard time seeing the downside of a native stable coin on chain. We KNOW the future of finance is NOT going to include bridging. Not as they are implemented today. I DO believe that a machine economy, data economy and many other micro-payment applications can evolve and tokens can be used to implement these. However there will be business and employees, perhaps DEFI that develops. All of these things can live on chain natively with a native digital dollar on Iotex. Especially while the US dollar is still the preferred way for many to transact. Having native dollars could be very attractive. It would also be an important signal for the market. My experience is 30 years of customer facing retail sales\marketing along with product market fit. Thats my two chai’s worth on the stablecoin subject.
Celo is supported by well-known DeFi protocols such as Uniswap, Curve, and Sushi, and cUSD has enough application scenarios. In addition, CELO has a tvl of 100M to support cUSD
The most valuable asset on the IoTeX chain is IOTX, which is still a highly volatile asset so far. To mint ioUSD with high-volatility assets, users have no motivation and the liquidation mechanism is difficult to design. Where is the application scenario of ioUSD? MIMO only has a TVL of 7M!
I have a few serious questions about the IoTeX stablecoin (assuming that the IoTeX stablecoin is backed by excess collateral of crypto assets)
What are the assets used for minting IoTeX stablecoin?
How to attract mortgage assets to mint IoTeX stablecoins?
What are the application scenarios of IoTeX stablecoin after its launch?
What is the scale/potential scale of these application scenarios?
What are the risks and benefits of IoTeX’s own stablecoin compared to other existing stablecoin solutions (such as bridging or existing stablecoins to issue initial coins to IoTeX)?
the concerns you raised about the volatility of IOTX and the lack of application scenarios for ioUSD are valid, but they can be addressed through careful planning and execution.
In the early days of DAI, it was primarily collateralized by Ether (ETH) This was because ETH was the most liquid and valuable asset on Ethereum at the time. However, MakerDAO has since expanded the range of assets that can be used to collateralize DAI, including other cryptocurrencies, stablecoins, and real-world assets.
As for an application scenarios for the stable coin, consider the M3tering Protocol and Solaxy
Creating a native stablecoin asset like ioUSD directly addresses the concerns I have surrounding the use of bridged DAI within my projects; M3tering protocol and Solaxy token. Utilizing a native stablecoin for energy payments on the m3tering protocol would eliminate the risk of DAI becoming unusable due to bridge failures, safeguarding the integrity of energy payments and preventing disruptions to the m3tering protocol’s operations.
Similarly, replacing bridged DAI with a native stablecoin as the reserve collateral for our DePIN token; Solaxy, would significantly reduce the risk of Solaxy’s failure in the event of a bridge compromise. While a native stablecoin depegging risk exists, its impact is milder compared to a DAI bridge failure scenario. In a depegging event, Solaxy’s value would not immediately plummet to zero; instead, it would likely experience a proportional decline, and possibily recover once the stablecoin’s peg is restored.
I’m enjoying this discussion. IoTeX could benefit from introducing its own stablecoin. The value of the stablecoin is provided by the users’ trust that the issuer (IoTeX) does provide adequate reserves and follows the pegging principles stated when issuing the stablecoin. But there is a danger of abuse. Problems arise if the issuer does not maintain sufficient reserves or does not provide sufficient transparency in its operations. Therefore, before deciding on the feasibility of developing a Native IoTeX Stablecoin, it is necessary to draw up a detailed document detailing all the mechanisms of securing, minting and burning the planned stablecoin.
I also just now realized that we have the Mai Stablecoin natively deployed on IoTeX by Qi Dao
How come this is not well known and adopted. Was the project ever discontinued?
And wouldn’t it be much easier just to use just revive activity and liquidity on Mai for DePIN apps that need native stablecoin security?
Would try reaching out to QiDao to see what could be done about this.
It looks like MAI isn’t too likely to continue, or resurrect rather, activities on IoTeX. They don’t even have IoTeX as an integrated chain on defi llama.
