While recumbing today I had an interest idea for a new kind of stablecoin. I call it a half stable coin because the price is stable only so long as supplies last. Here’s how it could work for Grin.
Suppose some billionaire decides to commit a billion dollars into a fund to be used exclusively to support a Grin halfstablecoin. He (or she) would (potentially after some period of quietly accumulating Grin) officially start operations by offering to buy 1 Grin for 1$.
That means most miners will sell to the fund, and they guarantee to keep this up for at least 30 years. They will also sell 1 Grin for $1.05.
If in 30 years there is never any demand to buy Grin from the fund, then they are simply left as the biggest bagholder ever. But once there are things you can buy and sell in Grin, then some demand can be expected to arise, and over time the fund can make a small profit from the buy-sell spread.
While the committed funds guarantee (modulo trust in the fund legalities) that you can always trade 1 Grin for 1 dollar, there is an obvious limit to how big the market can grow.
At least there is no risk that more stablecoins will be “printed” without dollar backing, as is the case with existing stablecoins likeTether. Every halfstablecoin is still properly PoW mined in a time limited and fair emission.
Once demand exceeds supply, there will be no Grins left to sell for $1.05
I’m not sure what would happen in that case. Perhaps the unmet demand will in itself cause the Grin halfstablecoin to lose some of its appeal and demand for Grin at prices > $1.05 will eventually dry up, and miners will start resupplying the fund.
It might make for an interesting experiment.
I have no idea how to estimate the odds of success or failure.
Perhaps I’m overlooking some very obvious problem and this could never work? Let me know what you think…