Hello everyone, this is my first time posting here. I am just a random dude from the community.
I am here to present you what I believe is a great idea for a possible long term repeg. This idea has been inspired by Edd Norris’ idea in the first meetup that Jack had with the validators.
I am going to drop the bomb but please read until the end because I think that it is justified:
LET’S MINT 5 BILLION ONE COINS.
The initial proposal from stse received a massive NO from the community and I believe that it was the execution and not the idea that made this an unpopular choice.
Before I go into the benefits of this execution, I will tell you the rules, for this I will use only USDC as an example:
- Anyone with USDC tokens will be able to swap it for ONE in 3.5 years’ time at a specific date (I will be calling it 1200 days to make it cleaner).
- The ratio to this swap will be 1 ONE = 0.02 USDC
Sounds bad, right? Well, let’s add something else to it: People will be able to early redeem with the following rules:
- Day 1 the value of the dollar will start at 9 cents.
- Each day will have a linear increase in value until reaching 1 dollar by day 1200.
- The formula for early redeem will be:
- early_redeem = dollar_amount * daily_rate / 0.02
- As a few examples:
- If someone wants to redeem 100 dollars on the 1st day, he will get 450 ONE
- If someone wants to redeem 100 dollars on the 500th day, he will get 2343 ONE
- If someone wants to redeem 100 dollars on the day 1000th day, he will get 4241 ONE
These new rules have a few pros:
- People that can’t wait for 3.5 years can early redeem at a lower price
- If price of ONE goes up, people will get better rate quicker
- Both these previous statements will reduce the 5B inflation to another number yet to study.
- Harmony’s debt going down will increase trust and then push the price up.
- You don’t need a snapshot
- You can open the bridge from day 1 but make it 1 way only until the 1USDC circulation is greater than the USDC locked in the bridge and let the new USDC that comes into the chain be able to redeem it for ONE too.
There are a few things that we all should be aware of:
With the rate increasing daily, a possible wall could be created by the selling pressure of this mechanism. It will start high, at around 22 cents but after one year that wall would be reduced to 5.4 cents. Here you have a graph of the selling wall pressure:
Inflation doesn’t go away.
This contract will have a large sum of our network, needs to be bullet proof.
Arbitrage bots will try to the max out of this. You guys are tech savvy, maybe you know a way of banning them from this, something like a captcha for blockchain or something like that.
- Less than 5B coins will be needed.
- The higher the price of ONE goes, the less inflation that will be
- No snapshot needed
- Bridge can be open from day 1
- People can decide when to cash out their tokens.
- No need for USDC to disappear although it might take time to repeg
- If you are going to mint, you might as well make it interesting