The worst kept secret in the cryptocurrency space is that stablecoins will bring mass adoption. The total available market for stablecoins is the same as money, which is every single commercial use case (i.e. the sum of all addressable markets). Yet as stablecoin projects compete over niche corners of the total addressable market, the opportunity to create a truly compelling ecosystem diminishes. To solve that, a decentralized stablecoin network and liquidity aggregator to benefit global stablecoin users is needed.
Cement is attempting to create a platform for decentralized stablecoin curation, liquidity, settlement and risk protection. By pooling and binding stablecoins in Cement, we are attempting to build a concrete platform upon which stablecoins can compete and grow organically and globally.
Cement allows multiple different stablecoins to be deposited in a mixed basket (liquidity pool) with on-demand, on-going, on-chain, ever-present liquidity. If you need to go from stablecoin A to stablecoin B, you can perform that transaction on-demand. If you are an exchange that wants to be able to accept any stablecoin, this provides a way to convert them on-chain in the same transaction. Similar to yield farming, users are incentivized to deposit stablecoins and be a liquidity provider by earning small fees on BILD tokens for every transaction.
What’s cool about stablecoins is stability, and we take advantage of that to enable everything in the basket to trade at par, 1:1. This makes it relatively simple to build a decentralized basket in this way. But what happens if someone tries to take advantage of this system by creating scamcoin to deposit into the basket and exchange them for the good stablecoins you worked so hard for? This is where decentralized curation comes in.
We want the community to be able to defend the stablecoin pool, only allowing into the basket stablecoin projects deemed to be good by the community, while rejecting all others. The community will vote on which stablecoins should be allowed into the basket, and which should be rejected from it, through a system of futarchy.
The problem with having most people vote is that most people have things to do and are not motivated or informed enough. To solve that, we are building an ecosystem of curation agents parties who are going to be highly informed and motivated, maybe you will want to play this role as well, and compete for your stake and for other people’s stake on your vote.
This competition will create decentralized hygiene in our industry. Competition to publish standards by which to judge different projects. Competition to create audits. Competition to provide transparency for projects. Competition for track records of making good or bad votes. And, collectively, competitors will vote to whitelist projects into (or out of) the basket which we call the mixer.
This is a decentralized global system that is not tied to any one regulator or decision-maker choosing the standards, but rather a set of ongoing dynamically competing standards which, ultimately, the industry can galvanize around. As a decentralized industry, this is how we can maintain and protect ourselves from scamcoins and draw a line in the sand between projects which are adhering to a certain set of standards and those that are not. A useful stamp of approval or rejection.
We are not going to govern the system, our goal is to give up control of it before we launch, because we want this to be something that is owned and managed by the ecosystem for the ecosystem. We are working to get various stakeholders, exchanges, market makers, stablecoin projects and project rating agents on board.
This is a call to arms: If you’re an exchange that wants to be able to manage liquidity from multiple different stablecoins, or a market maker who wants to be able to provide liquidity to the basket, we will provide you with the tools to take an active role in designing and managing the system, and ultimately deciding who gets to be part of it when we launch.