Stablecoins | Bitcointalksearch.org

nelson4lov

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Quote from: Robust Crypto on July 02, 2020, 04:58:02 PM

Hello

.

Here's where a stablecoins comes in. Now, presume he sells $1,000 worth of BTC for a stablecoin that I issue. The stablecoin is $1. Now assume the price of BTC drops by 50%.
That means, he can buy 50% more satoshis with the same $1,000, but since I don't have any BTC reserves, how can guarantee the "stableness" of the coin?

Are there any solutions to this such as offshoring this a decentralized exchange?

Thanks!

Ideally, this would only work if you've bitcoin reserves to backup the stable coin assets. Let's say things happen like in your example (bitcoin dumping 50% when the user already converted $1000 worth before the dump). If he decides to rebuy btc, that means he would have 50% more bitcoin so you should have reserves in place otherwise, it won't make much sense to offer such services inside of a wallet but could be a welcomed feature if you get it working since currently, one can only use stable coins via centralized exchanges.

UmerIdrees

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Quote from: hosseinimr93 on July 02, 2020, 05:25:43 PM

Quote from: Robust Crypto on July 02, 2020, 04:58:02 PM

Here's where a stablecoins comes in. Now, presume he sells $1,000 worth of BTC for a stablecoin that I issue. The stablecoin is $1. Now assume the price of BTC drops by 50%.
That means, he can buy 50% more satoshis with the same $1,000, but since I don't have any BTC reserves, how can guarantee the "stableness" of the coin?

100% not 50%

This stable coin is a scam. You cannot create money out of thin air.
Your stable coins must be backed by your reserves.
In simple words, when you issue 1000 dollar worth of stable coins, you must keep 1000 real dollar in reserve.

The question arises that why we need stable coins ? The answer is that we need stable coins because there is no real USD in the exchanges. That's why we see few stable coins which are backed up 100% by dollar (In theory). Practically they are not backed up 100% and hence it is unsafe to keep our funds in those stable coins.

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Quote from: Robust Crypto on July 02, 2020, 04:58:02 PM

Hello

I have a question about stablecoins and how they work.

Say I want to build a crypto wallet. Now, it's not an exchange, it's a wallet, but I want to give my users the ability to trade it in-wallet.

Here's where a stablecoins comes in. Now, presume he sells $1,000 worth of BTC for a stablecoin that I issue. The stablecoin is $1. Now assume the price of BTC drops by 50%.
That means, he can buy 50% more satoshis with the same $1,000, but since I don't have any BTC reserves, how can guarantee the "stableness" of the coin?

Are there any solutions to this such as offshoring this a decentralized exchange?

Thanks!

How do you back your stable coin (with a kind of asset, fiat, precious metal, etc.)?

From what you disclosed, your stable coin will have a value at $1 for one coin. It is same as many other stable coins.

[UPDATED] PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets
Top 10 stable coins of 2020

Negotiation

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Stable currency The central bank or financial authority regulates the supply of coins and paper money considering the economic condition of the country. If the central bank thinks that the supply of cash to the economy needs to be increased, then the central bank supplies money to the economy through the printing of new metals and paper and commercial banks. This increases the supply of cash in the market. On the other hand, if the economy needs to reduce cash flow, the central bank withdraws coins and paper money from its member banks. However, as a result of inflation, the demand for a stable currency decreases.

Lucasgabd

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Quote from: Charles-Tim on July 07, 2020, 02:49:15 AM

Quote from: OcTradism on July 03, 2020, 01:18:28 AM

Stable coins are only a relative term. Stable coins, in theory, must be backed by something considered widely as stable asset, like fiats, golds, and any precious things. Unfortunately, fiats, gold, precious things are not truly stable. They are usually stable but sometimes, they are volatile like what we see price of gold. Fiat currencies are a big joke, and they are only stable on the paper desk, in theory. In countries with hyperinflation, fiat currencies are not stable. One fiat currency is stable today but it will be a trash paper next 6 months.

No fiat currency is stable today, even dollar is not stable.
Also, you have said the reason why stable currencies can not be backed by fiats, gold or any other stock.
Stable currencies are not fiats or gold or any stock and cannot be backed by them, they are like unstable currencies that are not backed by anything, only difference are the prices that are not volatile but relatively stable. Stable currencies should not be backed by anything than increasing or decreasing in the stable coin supply in relation to the demand and selling of the the stablecoin in a way to maintain relatively constant price.

nothing is stable.
period

but sometimes OP or anyone may want to have a currecny that's closer related to their country fiat currency, nothing wrong with that.
it's not a good idea to have 100% of your assets in BTC or crypto because of the volatily, better to have at least some amount in fiat or some currency you'll need on day-to-day

Salauddin1994

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Stable currencies are the policies adopted by the financial authorities of a country to ensure economic development and stability of a country which ensures and regulates the money supply to the economy of the country. Monetary policy controls interest rates and money supply to control the country's inflation increase employment and ensure economic growth. A country's central bank or any independent institution formulates monetary policy as a financial authority stable currencies usually have their prices confirmed in advance. In that case, the difference between price increase and decrease is very small.

Charles-Tim

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Quote from: OcTradism on July 03, 2020, 01:18:28 AM

Stable coins are only a relative term. Stable coins, in theory, must be backed by something considered widely as stable asset, like fiats, golds, and any precious things. Unfortunately, fiats, gold, precious things are not truly stable. They are usually stable but sometimes, they are volatile like what we see price of gold. Fiat currencies are a big joke, and they are only stable on the paper desk, in theory. In countries with hyperinflation, fiat currencies are not stable. One fiat currency is stable today but it will be a trash paper next 6 months.

No fiat currency is stable today, even dollar is not stable.
Also, you have said the reason why stable currencies can not be backed by fiats, gold or any other stock.
Stable currencies are not fiats or gold or any stock and cannot be backed by them, they are like unstable currencies that are not backed by anything, only difference are the prices that are not volatile but relatively stable. Stable currencies should not be backed by anything than increasing or decreasing in the stable coin supply in relation to the demand and selling of the the stablecoin in a way to maintain relatively constant price.

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Quote from: sujonali1819 on July 06, 2020, 08:50:43 AM

...Another thing if you want to run you own stable coin then you have to prove it legit and you have to gain trust from the users first. Otherwise, your stable coin will not be used much.

This is the path followed by the Binance exchange, which released its stablecoin BUSD.And I, like many other exchange participants, trust this stablecoin, because I trust Binance, which is behind it. I can even say that I trust BUSD more than USDT

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Quote from: hosseinimr93 on July 02, 2020, 05:25:43 PM

Quote from: Robust Crypto on July 02, 2020, 04:58:02 PM

Here's where a stablecoins comes in. Now, presume he sells $1,000 worth of BTC for a stablecoin that I issue. The stablecoin is $1. Now assume the price of BTC drops by 50%.
That means, he can buy 50% more satoshis with the same $1,000, but since I don't have any BTC reserves, how can guarantee the "stableness" of the coin?

100% not 50%

This stable coin is a scam. You cannot create money out of thin air.
Your stable coins must be backed by your reserves.
In simple words, when you issue 1000 dollar worth of stable coins, you must keep 1000 real dollar in reserve.

That's very right. You can't just create a stable coin without backing of real asset where you want to pegged it with. Unless, you want to create a stablecoin pegged with empty promises!

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Quote from: Robust Crypto on July 02, 2020, 04:58:02 PM

Hello

I have a question about stablecoins and how they work.

Say I want to build a crypto wallet. Now, it's not an exchange, it's a wallet, but I want to give my users the ability to trade it in-wallet.

What do you mean by " I want to build a crypto wallet"? Do people who called your users will deposit their money into your created and fully controlled wallet?
Maybe I'm wrong but this a kind of trick. You are not making an exchanger but you want your users to trade using your wallet. Maybe you don't scam but somehow you've foolish enough to used other hands for your own benefits. How I supposed to think that people will use your wallet rather than having their own wallet.

Better to accept that you are planning to create an exchanger for stable coins only where traders are free to make their own trade than to pretend you're not then it is clear to understand what is your intention.

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Quote from: hosseinimr93 on July 02, 2020, 05:25:43 PM

Quote from: Robust Crypto on July 02, 2020, 04:58:02 PM

Here's where a stablecoins comes in. Now, presume he sells $1,000 worth of BTC for a stablecoin that I issue. The stablecoin is $1. Now assume the price of BTC drops by 50%.
That means, he can buy 50% more satoshis with the same $1,000, but since I don't have any BTC reserves, how can guarantee the "stableness" of the coin?

100% not 50%

This stable coin is a scam. You cannot create money out of thin air.
Your stable coins must be backed by your reserves.
In simple words, when you issue 1000 dollar worth of stable coins, you must keep 1000 real dollar in reserve.

there are stable coins in the market like USDT, DAI and USDC that have been audited and are proved to be good options if someone wants to have tokenized dollar reserves

it's even possible to earn some compound on that using CeFi or DeFi:
http://loanscan.io/

xZork

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Quote from: Robust Crypto on July 02, 2020, 04:58:02 PM

Hello

I have a question about stablecoins and how they work.

Stabecoin is a stable currency and backed by real assets. Most stabecoin is seen as an asset and a means for people to hide themselves from price drops.

sujonali1819

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Agreed with mk4 opinion. It really looks like a duck.

If you have not any reserve BTC then how you can create an exchange/wallet. So if you want to create any exchange like that then you must have reserved BTC and USDT/stable coin. Another thing if you want to run you own stable coin then you have to prove it legit and you have to gain trust from the users first. Otherwise, your stable coin will not be used much.

CucakRowo

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To OP.
If you want to build wallet with intra exchange features like you mentioned in your thread (especially about "what is stablecoin"), perhaps this article can help you : https://www.coininsider.com/stablecoins/

and this alternative will works also. I believe this alternative like mentioned by mk4 will make your (candidate) customer feels more comfortable and safe :

Quote from: mk4 on July 02, 2020, 09:28:48 PM

-snip-
Pro tip: If you really want your users to be able to exchange their coins without the need of having an actual exchange, probably just add a referral link that redirects to whatever exchange you prefer to link to(probably a non-custodial?). Some exchanges even allows integrating an API so your users wouldn't even need to move out of the app.

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Quote from: tvplus006 on July 05, 2020, 07:38:57 AM

Even if you release a stablecoin, it does not mean that someone will decide to exchange their bitcoin for your stablecoin. A prerequisite for such an exchange is the trust of customers in your stablecoin, which is based on how much this coin is secured by the assets and reputation of your company. Otherwise, your stablecoin will be perceived as a garbage coin.

But let us be honest, many a crypto user is so mindless they'll assume ANY supposed stablecoin they're presented with in the wallet they're using is the real deal. I wonder how many of them realise you're supposed to have real money behind them.

tvplus006

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Quote from: Robust Crypto on July 02, 2020, 04:58:02 PM

...
Are there any solutions to this such as offshoring this a decentralized exchange?
...

Even if you release a stablecoin, it does not mean that someone will decide to exchange their bitcoin for your stablecoin. A prerequisite for such an exchange is the trust of customers in your stablecoin, which is based on how much this coin is secured by the assets and reputation of your company. Otherwise, your stablecoin will be perceived as a garbage coin.

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Quote from: Robust Crypto on July 02, 2020, 04:58:02 PM

That means, he can buy 50% more satoshis with the same $1,000, but since I don't have any BTC reserves, how can guarantee the "stableness" of the coin?

You can't offer such service if you don't have any reverse like others have highlighted. If mr A wants to sell back the stablecoin to get some Satoshi, it means you (your exchange) have to be the one to buy back the stablecoin and give the user the Satoshi. Automatically you'll be at lost since you're buying a worthless stablecoin that you have to add up more personal funds in case there's a drop in bitcoin price.

I would also recommend the idea of patronizing other well established stablecoin instead of creating another worthless shitcoins, we have enough of those already.

OcTradism

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Stable coins are only a relative term. Stable coins, in theory, must be backed by something considered widely as stable asset, like fiats, golds, and any precious things. Unfortunately, fiats, gold, precious things are not truly stable. They are usually stable but sometimes, they are volatile like what we see price of gold. Fiat currencies are a big joke, and they are only stable on the paper desk, in theory. In countries with hyperinflation, fiat currencies are not stable. One fiat currency is stable today but it will be a trash paper next 6 months.

pooya87

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stable coins are stable versus another stable asset usually a fiat but sometimes something like gold. for exactly when we say Tether is a stable coin it means its value is stable versus US dollar and 1 Tether is supposed to be always 1 USD and if USD tanks then 1 Tether is still 1 USD.
that also means it doesn't matter what bitcoin price does, if it goes up you still buy it with 1 X = 1 USD

so when you issue a stable coin with 1000 units you must have 1000 units of dollar (or $1000) in your reserve and you don't sell it to people yourself, it is put in the market where people trade it among themselves and you as the centralized issuer should have the "peg" equal to the amount you issued so if someone wanted to dump the centralized coin they can get their money back.

jackg

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https://bit.ly/387FXHi lightning theory

It'd probably make more sense to allow users the ability to make usdc and/or usdt available from your site. These are then able to be transferred for dollars (at least usdc can definitely be exchanged)...

Exchanges run by matching pairs of trades so you'll get a "maker" and a "taker" your maker essentially lists and offer and your taker accepts it and pays your fee on top.

If I wanted to sell 1btc at $10 000 I'd list it on the order book for that price, if Alice comes to the exchange and decides she wants to by 1btc, where my price is the most optimal in the book, she'll receive ("take") it...

Exchanged don't work with a sole middle man unless you're going to charge a large buffer and prepare to take the impact of a drop or rise. I don't think anyone actually makes money as a middleman on a small exchange space.

Topic: Stablecoins (Read 354 times)