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Author Topic: [LIST] List of decentralized Stablecoins  (Read 482 times)
d5000
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April 27, 2018, 10:46:55 PM
Last edit: May 30, 2018, 11:34:18 PM by d5000
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 #1

We're currently seeing some movement in the development of "stable" cryptocurrencies. "Stablecoins" are designed to have a low volatility. Most of them are pegged to a base asset, like the US dollar. For an introduction to the topic, read this article on Hackernoon.

This list has the goal to track their development and their success (or failure) in terms of stability.

The list is ordered chronologically, according to the year of launch. Only decentralized coins are permitted, no "IOU" coins managed by a central entity - this is why you won't find Tether and similar coins in this list.

If you know another decentralized Stablecoin project I forgot, feel free to comment - I'll add it ASAP.



2014: BitShares (BitUSD, BitCNY etc.)

  • Description: Independent blockchain with a multi-asset system, featuring a base asset (BitShares) and pegged assets or "smartcoins" (BitUSD, BitCNY, BitBTC etc.). The blockchain is secured with the DPoS consensus method (BFT-based).
  • Pegged: Yes, to fiat currencies, cryptocurrencies and other assets
  • How the peg works:An "oracle" mechanism tracks the target price of the base asset (e.g. the USD) in BitShares. Users can enter a "short contract" creating smartcoins (e.g. BitUSD) depositing a big (2x the target price of the created smartcoins) collateral in BitShares. The "shorter" can profit if the BitUSD price in relation to BitShares goes down, but he has to pay back part of the collateral if he closes the contract with a lower BitShares price. If the BitShares price goes down more than 70% and the contract is still active, the short is auto-liquidated and the "shorter" loses his entire collateral.
  • Stability: Medium to Good (small peaks with up to ~20% deviation)
  • Price evolution: see BitUSD on Coinmarketcap
  • Website: bitshares.org

2014: NuBits (USNBT)

  • Description: A two-asset system on an independent blockchain. NuShares is the base asset, while NuBits is a pegged asset that is pegged to the US dollar.
  • Pegged: Yes, to the USD
  • How the peg works: A group of decentrally-designated (by PoS vote) "custodians" regulates the price by holding reserves and buying and selling NuBits on exchanges, earning rewards for it. NuBits can be "parked" (taken out of liquid supply) temporarily in low-demand phases, "parkers" earn rewards.
  • Stability: Bad (had long stable phases, but the peg broke in 2016 with up to 90% deviation to the downside, but recovered, in 2018 it broke again to the downside)
  • Price evolution: see Coinmarketcap
  • Website: nubits.com

2016: Steem Dollar (SBD)

  • Description: A "stablecoin" asset on the Steem blockchain, which also features two other currencies: "Steem" and "VESTs" (called "Steem Power").
  • Pegged: Yes, to the US dollar.
  • How the peg works: An oracle tracks the USD price. The system allows SBD holders to convert them 1:1 to the current USD market price in Steem on the blockchain, but the process (on purpose) takes 1 week.
  • Stability: Bad (deviations of 1000%+ to the upside - up to 13 USD - but the coin never fell significantly under 1 USD).
  • Price evolution: see Coinmarketcap
  • Website: steem.io

2017: MakerDAO / Dai (DAI)

  • Description: Part of the MakerDAO project. The system works on the Ethereum blockchain as a system of smart contracts ("Dapp"). Additionally to DAI there is another token called MakerShares.
  • Pegged: Yes, to the USD
  • How the peg works: The "base system" is similar to BitUSD: People can create Dai locking a collateral in Pooled Ether to the "target price" tracked by an oracle. There is however an additional stability mechanism which in low demand periods rises the target price (to reduce the incentive for the creation of Dai and promote selling), while in high-demand periods it does the opposite (to create incentives for creation/buying). Additionally, an emergency system called "global settlement" can dissolve all contracts in case of severe malfunction.
  • Stability: Good, but less than a year on the market
  • Price evolution: see Coinmarketcap
  • Website: makerdao.com

2018: Havven / eUSD (eUSD)

  • Description: Dapp (Smart contracts) on the Ethereum blockchain with two kinds of tokens: Havven and stable "nomins"
  • Pegged: Yes, to the USD
  • How the peg works: Relatively similar to BitShares: Users can create stable "nomins" with up to 20% of their Havven holdings (the rest is locked as collateral).
  • Stability: Recently launched
  • Price evolution: still not listed on Coinmarketcap
  • Website: havven.io

Project: Basis (formerly Basecoin) (Basis)

  • Description: Independent blockchain with three assets: "share tokens", "bonds" and "basis" coins.
  • Pegged: Yes, to the USD - in the future, other pegs are planned
  • How the peg works:  In low-demand periods, Bonds are auctioned and the "basis" stable coins which were used to buy them are burnt. In high-demand periods, Basis coins are created and distributed to bond holders, with a first-come-first-served mechanism that incentives early bond buying. Bonds can expire and in this case they're burnt, so buyers have to take some risk.
  • Website: basis.io


Project: RadixDLT (formerly eMunie)

  • Description: Independent ledger with custom algorithm. Closed-source/patented. Currently in beta.
  • Pegged: No
  • How the peg works: The system tracks the prices of different goods and services on an on-blockchain market and adjusts the supply accordingly. There is no hard peg, but volatility is meant to be reduced this way.
  • Website: RadixDLT.com

Project: Carbon

  • Description: Independent ledger with the Hashgraph algorithm. Two currencies (Carbon Stablecoin and Carbon Credit)  Patented (Hashgraph). Not released.
  • Pegged: Yes, to the USD
  • How the peg works: Very similar to Basecoin: In low-demand periods, Credits are auctioned and the stablecoins which were used to buy them are burnt. In high-demand periods, stablecoins are re-distributed to Credit holders.
  • Website: carbon.money

Project: BitBay (BAY)

  • Description: Independent blockchain with liquid and "frozen" tokens. The cryptocurrency already exists, but the peg is still not implemented.
  • Pegged: "Dynamic Peg" - users vote if the target price should go up or down.
  • How the peg works:  In low-demand periods, a part of the supply is frozen. In high demand periods, currency is created and distributed to holders, and frozen funds are returned to be liquid. More details will be available in a whitepaper that is planned for July 2018.
  • Website: BitBay Dynamic Peg


Concept: Seigniorage Shares

  • Description: Whitepaper that never was concreted, but the Basis concept is based partly on it.
  • Pegged: Yes, can be pegged to any asset.
  • How the peg works:  In low-demand periods, an asset is sold and the "stablecoins" used for these trades are burnt. The asset pays out a kind of "dividend" to incentive these exchanges. The asset in high-demand periods can be again transformed into stablecoins.
  • Website: Whitepaper on bravenewcoin.com

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April 28, 2018, 10:38:59 PM
 #2

Nice writeup. While I don't follow Stablecoins all that closely it definitely is interesting to see a comprehensive list of approaches at controlling volatility.

I'm not quite convinced that stability can be reliably achieved within tolerance levels that are acceptable for the general populace (say, < 5%) but they do give an opportunity to look at market forces in wholly new ways.

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May 03, 2018, 06:22:20 PM
Last edit: May 03, 2018, 10:55:34 PM by d5000
 #3

I'm not quite convinced that stability can be reliably achieved within tolerance levels that are acceptable for the general populace (say, < 5%) but they do give an opportunity to look at market forces in wholly new ways.
I agree. However, I think a stablecoin becomes useful already if it is able to swing back in a relatively short time from an "overpriced" or "underpriced" phase to the "target price". The key is the ability of the "stablecoin" to attract confidence in its exchange rate. That's why I consider BitUSD a success until now, even if its stability was not perfect.

I have thought a bit about this list and got to the conclusion that the currently active stablecoins can be classified in two groups:

- Coins trying to adjust liquid supply to demand. In lower demand periods they activate a mechanism to reduce the liquid supply to reduce selling pressure. NuBits and the projects Seigniorage Shares, Basecoin and eMunie/Radix belong to this group.
- Coins where the stable coins in reality are contracts for difference (or similar "financial instruments") where a party (a speculator) takes the risk to lose a collateral, with the chance to earn profits in another asset (e.g. the BitShares currency or MakerDao Shares). This is the case of BitUSD, Dai and Havven, with Dai having a more complex stabilization mechanism.

For now it seems that the second group is more successful, as NuBits can be almost already regarded as a failed concept. The problem seems to be that it's difficult to really reduce supply - in the case of NuBits, the coins taken out of circulation were only "parked" and then could be re-inserted in the market. Basis/Basecoin (which seems to have partnered with Google) is, for me, a better intent as there is a real risk for "bond" buyers as bonds can expire if a low-demand period lasts too long. I'll observe this project closely.

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May 03, 2018, 06:47:28 PM
 #4

This is a very interesting list, because seen steam Dollar and Nubits there is very funny, Steem Dollar is never a Stable Coin it was planned to be but there was a time this was trading below $1 and also a time when it was above $2. To all these concept of decentralised Stable coin will not work. I still believe Tether is the only stable coin in the space, though it has some shortcomings but I will pick it ahead of any one on your list
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May 03, 2018, 10:53:35 PM
Last edit: May 04, 2018, 12:49:17 AM by d5000
 #5

This is a very interesting list, because seen steam Dollar and Nubits there is very funny, Steem Dollar is never a Stable Coin it was planned to be but there was a time this was trading below $1 and also a time when it was above $2.

Yes, the goal is to track all coins which were planned as stablecoins and have a decentralized mechanism - also those that failed to achieve stability (that's why the "Stability" bullet point is there). Analyzing the model of a failed stablecoin, one can learn about the weaknesses of each mechanism. In the case of Nubits, for example, the problem was that it never really reduced its supply ("parked" coins would have better been "burnt", like Basis plans), and the Steem Dollar has imo a very weak peg mechanism, as it only tries to guarantee a "floor" of about $0.80 per SBD, but no "top".


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I still believe Tether is the only stable coin in the space, though it has some shortcomings but I will pick it ahead of any one on your list
You seem to believe that centralized authorities are needed for a peg. Think about mtGoxUSD Wink. I admit I have used Tether in the past for very small amounts (mostly during the most volatile phase in December) but I wouldn't trust a centralized party for really large amounts - my strategy now is to diversify (use several stablecoins at once, preferring decentralized ones).

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May 03, 2018, 10:59:10 PM
 #6

Bitbay has a rolling peg that has been in development for a few years now... almost at release stage.


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May 03, 2018, 11:12:24 PM
 #7

We're currently seeing some movement in the development of "stable" cryptocurrencies. "Stablecoins" are designed to have a low volatility. Most of them are pegged to a base asset, like the US dollar. This list has the goal to track their development and their success (or failure) in terms of stability.

The list is ordered chronologically, according to the year of launch. Only decentralized coins are permitted, no "IOU" coins managed by a central entity - this is why you won't find Tether and similar coins in this list.

If you know another decentralized Stablecoin project I forgot, feel free to comment - I'll add it ASAP.



2014: BitShares (BitUSD, BitCNY etc.)

  • Description: Independent blockchain with a multi-asset system, featuring a base asset (BitShares) and pegged assets or "smartcoins" (BitUSD, BitCNY, BitBTC etc.). The blockchain is secured with the DPoS consensus method (BFT-based).
  • Pegged: Yes, to fiat currencies, cryptocurrencies and other assets
  • How the peg works:An "oracle" mechanism tracks the target price of the base asset (e.g. the USD) in BitShares. Users can enter a "short contract" creating smartcoins (e.g. BitUSD) depositing a big (2x the target price of the created smartcoins) collateral in BitShares. The "shorter" can profit if the BitUSD price in relation to BitShares goes down, but he has to pay back part of the collateral if he closes the contract with a lower BitShares price. If the BitShares price goes down more than 70% and the contract is still active, the short is auto-liquidated and the "shorter" loses his entire collateral.
  • Stability: Medium to Good (small peaks with up to ~20% deviation)
  • Price evolution: see BitUSD on Coinmarketcap
  • Website: bitshares.org


This one make up my interest up. seeing that evolution price make me sure that, there's still coin with high possibilty to more growing up than just coin we now like usual. like BTC, ETH, XLM. etc

i see the timeframe between 1 April - 1 May and see its adorable growth of price and hope last month i invest in bitBTC
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May 03, 2018, 11:47:37 PM
 #8

The tale of Nubits is quite interesting. I've been reading their forums and it looks like there was a plethora of issues with that project as well as fundamental weaknesses that were never addressed.

The peg depended on certain parties providing liquidity. It was also depended on the second currency, nushares, being listed on exchanges with liquidity.

In the end of the day, reserves ended and now the market values NuBits much lower than 1$. This time it doesn't look like it's coming up like it did in 2016. The team behind it has been asking for bigger exchanges to list the project since the peg broke in march but their plea hasn't proved helpful. I think the structure was fundamentally flawed, be it that it was largely trust based even for a decentralized take on a stablecoin.

It was an early attempt but with all the recent competition in the field I wouldn't see the community trying to salvage it. With the team behind NuBits no longer trusted I don't see a way for it to recover.



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d5000
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May 04, 2018, 12:45:15 AM
 #9

Bitbay has a rolling peg that has been in development for a few years now... almost at release stage.
Thanks! I stumbled upon BitBay several times but it smelled like vapourware. In July the final whitepaper should be released according to the roadmap, then it becomes interesting. I added it as a "Project", and also added the older Seigniorage Shares concept because I think it has historical significance even if it was never released.

The tale of Nubits is quite interesting. I've been reading their forums and it looks like there was a plethora of issues with that project as well as fundamental weaknesses that were never addressed. [...] I think the structure was fundamentally flawed, be it that it was largely trust based even for a decentralized take on a stablecoin.
You are totally right.  Not only the supply problem I mentioned in the last post was fundamental. Also to rely on trading bots operating on traditional centralized exchanges was an error, I think - it's understandable as DEX technology was still in its infancy and not available for the Peercoin-based code (NXT, Bitshares, and Mastercoin, however, had a DEX already in 2014), but a blockchain-based exchange mechanism would have been better because a simple insolvency of one of these exchanges where the reserved tokens were stored would have been fatal.

Nevertheless it was an interesting attempt, because it's the first coin where the liquid supply was meant to react to demand changes.

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May 11, 2018, 11:38:19 AM
 #10

A good read on Stablecoins:
https://medium.com/@globcoin_io/5-key-facts-about-stablecoins-571819f3b3fa
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May 11, 2018, 04:02:58 PM
 #11

Thanks. I took a look at Globcoin (from your Bitcointalk nickname I infer that you're related to it). A basket-pegged "stablecoin" seems an interesting concept. I had also once started a thread about possible "basket-based" currencies, which unfortunately didn't get much attention. Fiat currencies often have long-term exchange rate movements and even can collapse (I'm not a fan of "Dr.Doom"-esque collapse prophets, however) and so a basket could help to mitigate these problems. I'm personally more interested in baskets of real-world-assets, e.g. gold/oil/wheat/soybeans.

Unfortunately, the Globcoin project seems to be centrally managed - similar to Tether, albeit a bit more trustable, it seems - so it's out of scope for this list.

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May 29, 2018, 03:05:11 AM
 #12

Really nice post, this topic is of great interest to me.

Any thoughts on which market and pairing will provide the best liquidity?
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May 29, 2018, 05:01:45 AM
 #13

Any thoughts on which market and pairing will provide the best liquidity?
A quick look at Coinmarketcap:

- BitUSD seems to be traded mainly on the Bitshares blockchain (and the Bitshares-based OpenLedger DEX). In the markets section on CMC it isn't listed on other exchanges.
- BitCNY has also the greatest liquidity on the Bitshares asset exchange. But it is traded on some centralized exchanges, too (CoinTiger and BigOne, see markets) this is interesting as that means there are no technical reasons for the inexistence of BitUSD implementations at centralized exchanges. I remember also that BitCNY was listed on Bittrex or Poloniex(?) last year.
- Dai is listed on several centralized and decentralized exchanges, the biggest volume having Ethfinex and OasisDEX.
- Steem dollars are listed on several major exchanges including Bittrex, Upbit and Poloniex, the biggest volume, by far, is on Upbit.
- Nubits, surprisingly stays on Bittrex and Upbit, having most volume/liquidity on these both, they're also listed on "SouthXchange" (may be project-related).

The last both hardly qualify as a "stablecoin" anymore, but interestingly they haven't fallen to zero and are also traded a bit.

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May 30, 2018, 11:31:36 PM
Last edit: May 31, 2018, 02:50:20 AM by d5000
 #14

I just found this excellent article on Hackernoon that explains stablecoins. It's a nice introduction to the topic, and the author takes similar conclusions than me, so I'll share it in the OP.

The author recommends to diversify into different stablecoins. An interesting follow-up question would be: What if someone creates a stablecoin backed by collateral in several other stablecoins, and tracked in a decentralized way? Wouldn't this be a sort of "super-stablecoin" with even better stability and less risk? And would it be factible?

A somewhat related idea from Vitalik Buterin: Collateralized Debt Obligations for Issuer-Backed Tokens

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May 31, 2018, 03:44:14 AM
 #15

Thanks for the reply, I think I poorly worded my question - what I was wondering more was your take on what pair (asset/market) has the strongest lead in terms of decentralized stablecoins (what will rush to fill the vacuum of Tether if/when it fails)?

Also, do you consider Haven Protocol a stablecoin? Yes, offshoring is still a theoretical at this time, but... assuming it works as described.
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May 31, 2018, 04:27:52 AM
 #16

Unfortunately, that's impossible to predict. But for now I consider we have two "leaders" (that are also those with most volume/liquidity afaik) and one possible contender:

- BitUSD, because of its long tradition and relatively good stability
- Dai, because it is a sort of improved BitUSD (I think the improvements make sense), and is implemented on the Ethereum blockchain where a highly liquid DEX environment exists. I think the ETH pair is likely to be the one with the highest volume.
- in the future, maybe Basecoin - the model looks good from my point of view, and it seems to have also some industry support (e.g. from Google) although the peg itself will be probably weaker.

If you wanted me to pick only one, for now I would chose Dai (and Dai/Eth as the "reference market").

With respect to Havven, it's the stablecoin I maybe read less about, because it looks like a weaker variant of BitUSD, and it didn't really catch my interest. I may re-read its whitepaper so I can give a more qualified answer.

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May 31, 2018, 06:57:12 PM
 #17

Great list!! Personally a big fan of Havven. Looks like nUSD is launching on June 11th. Thought it was cool that they had an estore where you can use their stablecoin to buy Apple products.

https://themerkle.com/now-you-have-another-way-to-pay-for-apple-products/
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June 20, 2018, 07:33:43 PM
 #18

Great list!! Personally a big fan of Havven. Looks like nUSD is launching on June 11th. Thought it was cool that they had an estore where you can use their stablecoin to buy Apple products.

https://themerkle.com/now-you-have-another-way-to-pay-for-apple-products/

I agree, this is a great list of stablecoins. In terms of major announcements, Havven has launched nUSD and they have an airdrop going on right now: https://blog.havven.io/announcing-the-nusd-airdrop-campaign-9ceb26810172
Arne9131
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July 22, 2018, 10:14:00 PM
 #19

I have been working on an Ether-coupled stable price system, Zeny. Money over the period of years has existed with intrinsic and extrinsic attributes. I strongly believe stable private money must possess both intrinsic and extrinsic properties. The gold standard is a prominent example of such stable money possessing both intrinsic and extrinsic properties. The difficulty in acquisition of more gold to increase the circulating supply breaks the equilibrium of 1:1 ratio. To honestly support a global economy backed by gold would require an infinite amount of gold acquisition.

I am trying to express two simple principles,
a. Price system adjusts the circulating supply using dynamic reward rate to incentivize contraction.
b. Every Zeny is backed by a commodity (gas execution time) controlled by a set of decentralized actors. Assuming that the Ethereum universe UE maintain utility value, the time within the universe UE will have continual demand. Time would be an infinite resource supporting global circulating supply and verifiable using decentralized mechanisms.

The condition b. provides Zeny an intrinsic value and enforced exchange rate from zeny to that x amount of time brings advantages of extrinsic value.

The first draft of the concept is available at https://github.com/arne9131/Zeny/blob/master/Zeny_Next_generation_Money%20(2).pdf

Arne
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August 03, 2018, 06:41:31 PM
Last edit: August 04, 2018, 12:07:17 AM by tradersnow
 #20

Bitbay has a rolling peg that has been in development for a few years now... almost at release stage.



Good to see BitBay (BAY) on the list.
They recently released their dynamic (and decentralized) peg whitepaper here:

http://bitbay.market/downloads/whitepapers/bitbay-dynamic-peg.pdf


It is going to be much different than the other stablecoin projects, which are tied to collateral.
Investors will have an opportunity to make gains while storing their profits, and allows the price to slowly fluctuate based on a decentralized user voting system. Similar to a crawling peg in some ways, but without the downside of having to maintain reserves.

Keep an eye out for release around Q3, 2018.
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