Exploring a Stablecoin on Oxen
Oxen introduced article New Directions: Exploring a Stablecoin on Oxen.
A few months ago two community members — under pseudonyms Fenwick Fenix and Borislav Babochka — released the biggest community proposal they’ve seen here at Oxen, an article and attached whitepaper describing OUSD. Their whitepaper describes OUSD as a private DAI backed stablecoin which could be issued on the Oxen blockchain. The commitment of the Oxen community never fails to impress, and they were intrigued by this proposal. The creation of a private stablecoin such as OUSD would allow any individual to store wealth privately while avoiding the volatility found in current cryptocurrency markets..
Their interest in this proposal led us to conduct some initial research into the design laid out in the OUSD whitepaper. Unfortunately, they found a few problems, including issues with scalability and security. However, they are still impressed with and interested in the core idea of issuing a stablecoin.
Not so stable after all
When the OUSD paper was first dropped into our community channel, our assessment was that the market was unsuitable for the creation of another stablecoin, even a privacy focused stablecoin, with strong and established projects already filling the stablecoin space and satisfying this niche.
As it turns out though, in recent months we have seen algorithmic stablecoins like IRON/Titan, FEI and TerraUSD all failing to maintain their peg to USD — either temporarily or altogether. Privacy-focused stablecoin projects such as Haven have fallen victim to hacking attempts — destroying trust in the stability of their stablecoins. All of these incidents have led us to the conclusion that there is significant demand for experienced development teams to build non-algorithmic private stablecoins. The Oxen team is uniquely positioned to help fill this gap in the market, being immersed in the DeFi space through Chainflip and with three and a half years of experience working on Oxen in back pocket, and without any serious blockchain compromising events to speak of. A private stablecoin also fits perfectly among lineup of privacy preserving tools and aligns with vision of a more private and decentralised internet.
But why Oxen?
The benefits of such a token being issued on top of Oxen are numerous, primarily there are various points at which the Oxen network could charge stablecoin users a network fee which is used to buy and burn Oxen. This includes minting fees charged each time new stablecoins are created, transaction fees when stablecoins are sent, and yield fees, which are generated from the assets used to back the stablecoin. Also the additional possibility of instant transactions on this Oxen based token is an exciting prospect that could make a significant impact in the space.
The end result of all this being that today we are announcing that we are working internally on a design for a private stablecoin. This stablecoin would be issued on the Oxen blockchain and would be fully backed in an asset with a legitimate and widely recognised market value. Legal advice on the issuance of such a token is still pending but we think this is an exciting opportunity for the Oxen community.
What is Oxen?
Oxen is many things. A private cryptocurrency. A secure messaging platform. A network anonymity layer. Tools to build a more private future for the Internet.
https://oxen.io/blog/new-directions-exploring-a-stablecoin-on-oxen
