I need idea validation for this stable coin idea of mine.

[prp-e]

Greetings all.

Hope you're doing well and this topic is about an idea I got while researching on how to make a layer 2 chain. Honestly the concept of layer 2 can be good but not really something useful when we've got a ton of them backed by people who actually had much more experience than me in building one. So I heard a lot of USDT wallets are being frozen due to sanctions, authorities asking or pretty much every procdure designed to block the assets.

I am not a millionaire/billionaire and I can't even get people convinced to give me the capital for a project like USDT and honeslty, it is not possible for a single developer to make USDT on his own. So what is my idea then?

It is simple:
You spend one USDT (or USDC, or even maybe USDD, but since the last one is not really that vulnerable to being frozen) and your USDT/USDC is kept in a vault. You get my token in exchange and then you are good to go. In my mind, I still think of it 1:1 (one unit of my token is one USDT/USDC).

This is the core idea. For chain, I am thinking about TRON and TON for now (honestly the only reason for those is because I have funds on both) and later it'll be expanded. Also, a fixed like %0.5 fee for every transaction is in my mind (if more is acceptable, I'm glad to know how much I can raise the bar on it).

So I'd be grateful to have your input on this project.

[OmegaStarScream]

It is simple:
You spend one USDT (or USDC, or even maybe USDD, but since the last one is not really that vulnerable to being frozen) and your USDT/USDC is kept in a vault. You get my token in exchange and then you are good to go. In my mind, I still think of it 1:1 (one unit of my token is one USDT/USDC).

This is the core idea. For chain, I am thinking about TRON and TON for now (honestly the only reason for those is because I have funds on both) and later it'll be expanded. Also, a fixed like %0.5 fee for every transaction is in my mind (if more is acceptable, I'm glad to know how much I can raise the bar on it).

The expensive fees aside, what happens when your vault/addresses get frozen by Circle or Tether?? who takes the losses? can the user get his original USDT back?

It sounds to me like you're trying to simply replicate what DAI is doing? except DAI is backed by multiple assets/cryptocurrencies.

[prp-e]

It is simple:
You spend one USDT (or USDC, or even maybe USDD, but since the last one is not really that vulnerable to being frozen) and your USDT/USDC is kept in a vault. You get my token in exchange and then you are good to go. In my mind, I still think of it 1:1 (one unit of my token is one USDT/USDC).

This is the core idea. For chain, I am thinking about TRON and TON for now (honestly the only reason for those is because I have funds on both) and later it'll be expanded. Also, a fixed like %0.5 fee for every transaction is in my mind (if more is acceptable, I'm glad to know how much I can raise the bar on it).

The expensive fees aside, what happens when your vault/addresses get frozen by Circle or Tether?? who takes the losses? can the user get his original USDT back?

It sounds to me like you're trying to simply replicate what DAI is doing? except DAI is backed by multiple assets/cryptocurrencies.

This is exactly why I asked this question here. That freezing risk is still there on a much bigger level of threat and it is something to consider.
About what DAI is doing, I had no idea. Thanks. I think it would be a good idea to check them out as well.

[decodx]

So I'd be grateful to have your input on this project.

Did you just invent a way to print money out of thin air? Haha!

[asriloni]

You spend one USDT (or USDC, or even maybe USDD, but since the last one is not really that vulnerable to being frozen) and your USDT/USDC is kept in a vault. You get my token in exchange and then you are good to go. In my mind, I still think of it 1:1 (one unit of my token is one USDT/USDC).

This is the core idea. For chain, I am thinking about TRON and TON for now (honestly the only reason for those is because I have funds on both) and later it'll be expanded. Also, a fixed like %0.5 fee for every transaction is in my mind (if more is acceptable, I'm glad to know how much I can raise the bar on it).

So I'd be grateful to have your input on this project.

None will be using your stable coin with that ridiculous fees. I've been using various stable coins for the yield and airdrop farming purpose, and all of them charged 0% fees.

Just you know there are always two kind of stable tokens, a stable coin and yield bearing stable coin. The fact that the fees only charged when stakers are willing to do instant withdraw to their yield bearing stable coin to the USDT/USDC.

It makes no sense when you charge fees for every transaction. Why don't you run a meme if your intention just to get the fees from anyone who transacting your tokens?

Also running stable coin is not as easy as issuing it, then creating a vault for it. You have to be fully doxxed, and you have to get good backers by various good venture capital to build the trust of your project.

I'm writing this based on my exp using various stable coins and yield bearing stable coin before.

[bitbollo]

I would point out more on trust and safety of the whole operation.
I would never risk some delay or issue. We have seen during these days how it could become "expensive" dealing with "bugs or issues" in a second-layer network.

This could be likewise "wrapping" stablecoins and granted the liquidity in a blockchain... unless there is a real reason to have such token I don't see the real use case scenario. It must be complaint with MICA or ClarityAct? Well, you have to consider that it's already plenty of alternatives (cheapest as mentioned)...

[prp-e]

So I'd be grateful to have your input on this project.

Did you just invent a way to print money out of thin air? Haha!

Not really, thoughts of how can I be helpful to people who're losing their capitals.

You spend one USDT (or USDC, or even maybe USDD, but since the last one is not really that vulnerable to being frozen) and your USDT/USDC is kept in a vault. You get my token in exchange and then you are good to go. In my mind, I still think of it 1:1 (one unit of my token is one USDT/USDC).

This is the core idea. For chain, I am thinking about TRON and TON for now (honestly the only reason for those is because I have funds on both) and later it'll be expanded. Also, a fixed like %0.5 fee for every transaction is in my mind (if more is acceptable, I'm glad to know how much I can raise the bar on it).

So I'd be grateful to have your input on this project.

None will be using your stable coin with that ridiculous fees. I've been using various stable coins for the yield and airdrop farming purpose, and all of them charged 0% fees.

Just you know there are always two kind of stable tokens, a stable coin and yield bearing stable coin. The fact that the fees only charged when stakers are willing to do instant withdraw to their yield bearing stable coin to the USDT/USDC.

It makes no sense when you charge fees for every transaction. Why don't you run a meme if your intention just to get the fees from anyone who transacting your tokens?

Also running stable coin is not as easy as issuing it, then creating a vault for it. You have to be fully doxxed, and you have to get good backers by various good venture capital to build the trust of your project.

I'm writing this based on my exp using various stable coins and yield bearing stable coin before.

I found out the half percent fee is high, what amount can be a reasonable one? I just do something I did on pricing of my other products. I'm not really familiar how should I do this here.

I would point out more on trust and safety of the whole operation.
I would never risk some delay or issue. We have seen during these days how it could become "expensive" dealing with "bugs or issues" in a second-layer network.

This could be likewise "wrapping" stablecoins and granted the liquidity in a blockchain... unless there is a real reason to have such token I don't see the real use case scenario. It must be complaint with MICA or ClarityAct? Well, you have to consider that it's already plenty of alternatives (cheapest as mentioned)...

What more alternatives are there? I'm just asking to take a look ath ther whitepapers, smart contracts and also fees.

[The Cryptovator]

I am not a millionaire/billionaire and I can't even get people convinced to give me the capital for a project like USDT and honeslty, it is not possible for a single developer to make USDT on his own. So what is my idea then?

Do you think it’s easy to launch a stable coin? It’s easy to deploy; anyone could deploy a stablecoin token on the chain, but will it be acceptable everywhere? Unless it’s backed by some other valuable assets, then likely crypto users won’t use your stable coins. A lot of paperwork as well; you have to comply, and stablecoins have to be usable everywhere.

However, I don’t think your idea would work. Otherwise every one of us would launch a stable coin from our end. Doesn’t make sense actually for such stable coins. You may focus on some other project that could keep a role in the crypto industry.

[prp-e]

I am not a millionaire/billionaire and I can't even get people convinced to give me the capital for a project like USDT and honeslty, it is not possible for a single developer to make USDT on his own. So what is my idea then?

Do you think it’s easy to launch a stable coin? It’s easy to deploy; anyone could deploy a stablecoin token on the chain, but will it be acceptable everywhere? Unless it’s backed by some other valuable assets, then likely crypto users won’t use your stable coins. A lot of paperwork as well; you have to comply, and stablecoins have to be usable everywhere.

However, I don’t think your idea would work. Otherwise every one of us would launch a stable coin from our end. Doesn’t make sense actually for such stable coins. You may focus on some other project that could keep a role in the crypto industry.

Good point actually. I have a meeting with a local dev tomorrow. I also show him this topic (I'm sure he's going to roast me as well) but roasted at this point is much better than being in millions in debt.

[Jostle]

I'm trying to understand on what is your value-add to stablecoins. Is it that you have a way to prevent it from being frozen?

Also, what does it mean that when customer spends USDC, it gets locked in your vault. How does the customer's "USD"-equivalent amount get sent to the merchant? Somehow, it has to do so.

[MAAManda]

It is simple:
You spend one USDT (or USDC, or even maybe USDD, but since the last one is not really that vulnerable to being frozen) and your USDT/USDC is kept in a vault. You get my token in exchange and then you are good to go. In my mind, I still think of it 1:1 (one unit of my token is one USDT/USDC).

This is the core idea. For chain, I am thinking about TRON and TON for now (honestly the only reason for those is because I have funds on both) and later it'll be expanded. Also, a fixed like %0.5 fee for every transaction is in my mind (if more is acceptable, I'm glad to know how much I can raise the bar on it).

Is all this intended to obscure the potential use of funds for illegal activities?

After reading it, I grasped that point. So, please correct me if I have misunderstood it. My conclusion stems from the question of why they would need to swap their stablecoins for yours when they could simply use their own on existing chains.

Then, I felt that none of it would be easy, because you have to establish trust with your clients, what makes them feel secure? The only thing that comes to mind right now is regulation.

[TastyChillySauce00]

You're only wrapping stablecoin? how are you able to make sure that the user trust you and your vault, there has been a lot of hackers and vault isn't as secure as you think unless you managed it with multi signature but multi signature means the user is going to need to trust you. Besides, you're going to need a big amount of money for liquidity for AMM dex pool, otherwise your user is going to redeem through you. But overall, this idea unnecessarily add more counterparty risk and stablecoin users are sensitive to risks.

Honestly, i will never trust stablecoin wrapper that don't have a good DAO and big liquidity enough to overcollateralize the wrapped stablecoin token and did you know that 0.5% fee for a stablecoin is 20 times higher than stablecoin swap fee on stable pool?

[prp-e]

It is simple:
You spend one USDT (or USDC, or even maybe USDD, but since the last one is not really that vulnerable to being frozen) and your USDT/USDC is kept in a vault. You get my token in exchange and then you are good to go. In my mind, I still think of it 1:1 (one unit of my token is one USDT/USDC).

This is the core idea. For chain, I am thinking about TRON and TON for now (honestly the only reason for those is because I have funds on both) and later it'll be expanded. Also, a fixed like %0.5 fee for every transaction is in my mind (if more is acceptable, I'm glad to know how much I can raise the bar on it).

Is all this intended to obscure the potential use of funds for illegal activities?

After reading it, I grasped that point. So, please correct me if I have misunderstood it. My conclusion stems from the question of why they would need to swap their stablecoins for yours when they could simply use their own on existing chains.

Then, I felt that none of it would be easy, because you have to establish trust with your clients, what makes them feel secure? The only thing that comes to mind right now is regulation.

Not for "illegal" acitivities. You can look at it more like some DAO, startup or foundation valuing your assets with not caring what you do with your own money. It'll still be available to scan on something like tronscan or etherscan or something similar.

You're only wrapping stablecoin? how are you able to make sure that the user trust you and your vault, there has been a lot of hackers and vault isn't as secure as you think unless you managed it with multi signature but multi signature means the user is going to need to trust you. Besides, you're going to need a big amount of money for liquidity for AMM dex pool, otherwise your user is going to redeem through you. But overall, this idea unnecessarily add more counterparty risk and stablecoin users are sensitive to risks.

Honestly, i will never trust stablecoin wrapper that don't have a good DAO and big liquidity enough to overcollateralize the wrapped stablecoin token and did you know that 0.5% fee for a stablecoin is 20 times higher than stablecoin swap fee on stable pool?

I put the 0.5 percent fee as some sort of example. Obviously if this thing becomes a reality, the fees will be alligned with something realistic in order to not make people mad about how expensive transactions can get on top of the stable coid. However I never thought of DAO's or LP's for this wrapper type of projects and this is basically a new concern. I'm researching about my next project and opinions like yours (I mean all of respectable people participating here) helps me have a much better point of view.

[ferrddy]

I think this is an interesting stable coin concept. The key thing I see is that having a stable coin pegged to traditional assets while incorporating some crypto benefits could bridge the gap between traditional finance and the crypto world. However, the main challenge will be maintaining the peg during market volatility. I've been watching how other projects approach reserve management, and the transparency of those reserves is crucial for user trust. What specific backing assets are you planning to use, and how do you plan to handle audits?

[TastyChillySauce00]

I put the 0.5 percent fee as some sort of example. Obviously if this thing becomes a reality, the fees will be alligned with something realistic in order to not make people mad about how expensive transactions can get on top of the stable coid. However I never thought of DAO's or LP's for this wrapper type of projects and this is basically a new concern. I'm researching about my next project and opinions like yours (I mean all of respectable people participating here) helps me have a much better point of view.

LP is the most important if you're creating stablecoin wrapper, a small depeg could cause bigger depeg because the holders will become scared and dump it, therefore you'll need to use stablepool and big liquidity. The liquidity supplied usually around 30% for a new stablecoin. Well, you can actually let people add LP by giving 1:1 redeem infrastructure so in case the stablecoin depeg, they can arbitrage and redeem it to you.

You might actually want to look up about synthetic dollar like GHO, USDai, crvUSD and many more, from what I know, most synthetic dollar issuer don't earn from fees or tax, they earn from the vault by using it to earn yield and take a cut while redistributing some parts back to the vault either through yield bearing token or direct distribution. I think there are also several vault white label infra that you can use which help you secure the fund like Upshift, currently being used by several synthetic dollar issuer. If I were you I'd use white label infra as much as I can, the one that is trustable and have been serving b2b for a long time. But all these vault as a service, also have underlying risk.

These are just tip of the iceberg, the difficult thing is as always building the whole thing including legalities.

[prp-e]

I still couldn't talk to my friend about the idea (schedule issues) but int this very discussion I found pretty cool leads. Thanks community.

I think this is an interesting stable coin concept. The key thing I see is that having a stable coin pegged to traditional assets while incorporating some crypto benefits could bridge the gap between traditional finance and the crypto world. However, the main challenge will be maintaining the peg during market volatility. I've been watching how other projects approach reserve management, and the transparency of those reserves is crucial for user trust. What specific backing assets are you planning to use, and how do you plan to handle audits?

Yes this is a problem. I was thinking of 1:1 pegging (on USDT, USDC, DAI, etc) but I also noticed even them - with actual dollars and reserves - usually can be behind sometimes (I always wondered why most of the time, USDT is like 0.98 dollars or so.

You might actually want to look up about synthetic dollar like GHO, USDai, crvUSD and many more, from what I know, most synthetic dollar issuer don't earn from fees or tax, they earn from the vault by using it to earn yield and take a cut while redistributing some parts back to the vault either through yield bearing token or direct distribution. I think there are also several vault white label infra that you can use which help you secure the fund like Upshift, currently being used by several synthetic dollar issuer. If I were you I'd use white label infra as much as I can, the one that is trustable and have been serving b2b for a long time. But all these vault as a service, also have underlying risk.

These are just tip of the iceberg, the difficult thing is as always building the whole thing including legalities.

Honestly never heard of synthetic dollar before. It means I need more and more research. Also, what whitelabel services are available here?

[linenoise]

Stablecoins now have legal requirements in multiple areas of the world. It's now a very regulated industry. Determining if a potential user can even use your service will be necessary

[prp-e]

I managed to talk to my friend about the idea. He said using DAI (as I found it's now USDS) can be a better choice to do the MVP. I also personally got to research about those synthetic dollars as well.

Stablecoins now have legal requirements in multiple areas of the world. It's now a very regulated industry. Determining if a potential user can even use your service will be necessary

Yes, I am aware of that. I guess legal fees can be skyrocketing. However, I am trying to keep it as a fun project and nothing more.

[TastyChillySauce00]

Honestly never heard of synthetic dollar before. It means I need more and more research. Also, what whitelabel services are available here?

Depends on what kind of stablecoin wrapper you that want to create. Ethena offers stablecoin whitelabel where you can choose the kind of the backing that have yield or not whereas for non synthetic dollar white label, you can use BitGo and Coinbase. If you want pure synthetic dollar with your own custom strategy, use upshift vault but create the token and supply liquidity to maintain its peg yourselves.

Newer stablecoin that started from small and very recent dominated by combination of upshift vault and user minted token by depositing USDC through infrastructure built by the synthetic dollar developer, they give receipt token and supply the deposited stablecoin to upshift vault and many of them failed to keep the peg for two reasons the team failed to keep the liquidity good and at 1:1 range or their strategy to get yield failed, the reserve funds become thin and unable to redeem at par because insufficient reserve.

[prp-e]

Honestly never heard of synthetic dollar before. It means I need more and more research. Also, what whitelabel services are available here?

Depends on what kind of stablecoin wrapper you that want to create. Ethena offers stablecoin whitelabel where you can choose the kind of the backing that have yield or not whereas for non synthetic dollar white label, you can use BitGo and Coinbase. If you want pure synthetic dollar with your own custom strategy, use upshift vault but create the token and supply liquidity to maintain its peg yourselves.

Newer stablecoin that started from small and very recent dominated by combination of upshift vault and user minted token by depositing USDC through infrastructure built by the synthetic dollar developer, they give receipt token and supply the deposited stablecoin to upshift vault and many of them failed to keep the peg for two reasons the team failed to keep the liquidity good and at 1:1 range or their strategy to get yield failed, the reserve funds become thin and unable to redeem at par because insufficient reserve.

First, using a whitelabel service seems more elligible than other ways so I may be in search of one of those. And also about keeping the thing 1:1, I really am curious where did most stable coins started. Did they have millions in reserves?