The Stable Set DynaSet — Governance Event
In order to give the community more time to submit proposals we have decided to postpone the vote until the New Year, closer to the time that the Stablecoin DynaSet will be ready to launch. We will communicate an official date 2 weeks before the event.
Greetings Singularitarians,
A fundamental part of SingularityDAO is it’s community. In accordance with the plans laid out in our Governance Whitepaper, it is time to start having more frequent governance events and allowing you all to begin sharing your opinions regarding how the platform should continue to grow.
The Problem
For some time there has been ongoing debate about using Tether (USDT) on our platform. As a team we are very aware of the risks associated with Tether and after some careful deliberation we arrived at a few conclusions. First, DynaSets require huge pools of liquidity to execute multi-million dollar trades, it would not be viable for us to exclude any stablecoin from the list of available pools to execute swaps in. Second, we recognize the overall community sentiment that Tether has its drawbacks and presents certain risks, for all the reasons you already know.
A lot of debate was had, both in the community and within the team, regarding a vote to choose which coin we would use moving forward, but as you will see from our list of pro’s and con’s down below, there really is no pre-existing good choice that fits all criteria. We will just have to solve it ourselves then!
The Solution
Today we would like to present to you, the “Stable Set”, a DynaSet that consists of stablecoins being automatically rebalanced. Not to generate Alpha but instead to maintain a perfect dollar peg. Of course this DynaSet of stablecoins will need to have Tether (USDT) and USD Coin (USDC) included, in order to meet the liquidity requirements of our DynaSets. The other coins to include, we leave up to you.
The beauty of a DynaSet consisting of stablecoins is that we can include tokens like Tether without fear. Should the scrutiny directed at Tether ever become too serious and USDT be cast out, we can simply rebalance into other more reliable tokens.
You will find that we have opened a second thread within the Governance section of our Forum here. We ask that for the next few days you go and create posts discussing which stablecoins you would like to see included. You want to see DAI? Go make a case for it. Do you disagree? Go respond and tell us why. For the next month we will collect input from the community and then on Thursday hold a vote for which coins to include.
Below we’ll cover the pro’s and con’s of the top stablecoins, to give an idea of the kind of input we are hoping to receive on the forum. We are very curious to see which coins you all choose.
Pros and Cons
Pros and Cons of something like stablecoins are somewhat subjective based on the required criteria of the project in question and the personal bias of the person doing the writing. One final note to make is that as we move onto more chains, there may be times that certain stablecoins are not available. Who knows if we will see USDT move to Cardano or not? For now though, let’s list out some pros and cons for each stablecoin and how they would affect our DynaSets.
USDT (will be included for sure in the Stable Set)
Tether (USDT) is currently the most dominant and widely used stablecoin. It is also the most controversial.
PRO
- Highest Volume and Liquidity of any stablecoin on a DEX.
When DynaSets make swaps, they will sometimes be in the millions of dollars. Having access to large liquidity pools will be fundamental to optimise Alpha. - Available on almost all current blockchains, from ETH and BSC to Avalanche and solana
- Has survived many years of regulatory scrutiny and still going strong
- The most used Stablecoin
CON
- Endlessly scrutinized regarding cash reserves
- Constant FUD directed at reputation and reliability
- Fully Centralized
USDC (will be included for sure in the Stable Set)
USD Coin (USDC) is the second largest stablecoin in circulation. It is somewhat similar to Tether except that since its inception it has endeavoured to remain legally compliant.
PRO
- DEX Volume and Liquidity almost as large as Tether
- Likely to be the ideal choice for DynaSets
- Reasonably regulated, likely to become more so
- Widely available across multiple blockchains
- Fast catching Tether in market capitalization
CON
- Fully Centralized
DAI (to be voted on for inclusion in Stable Set)
Maker DAI (DAI) is an Algorithmic stablecoin backed by other cryptocurrencies. It is the original decentralized stablecoin.
PRO
- Decentralized
- Reasonably Liquid on DEX
- Has existed for some years now, relatively reliable
CON
- DAI is 62% backed by USDC and only 29% backed by ETH. The remaining 3% is made up with other erc20 tokens
- There will be occasions where DAI volume on DEX cannot support DynaSet trade requirements
- Potentially out-dated technology compared to newer algorithmic stablecoins
UST (to be voted on for inclusion in Stable Set)
TerraUSD (UST) is a new Algorithmic stablecoin which has recently gained a lot of traction in the crypto markets.
PRO
- Uses the latest and most advanced technologies to maintain its stable peg
- A growing ecosystem
- Decentralized
CON
- New and most advanced also means unproven and highest possibility of exploit or failure
- Very likely to not meet liquidity requirements of DynaSets
- Unknown how many chains will support this token
BUSD (to be optionally voted on for inclusion in Stable Set)
Binance USD (BUSD) is a centralized stablecoin similar to Tether or USDC. It is one of the largest stablecoins on the market and is backed 1:1 by the New York State Department of Financial Services.
PRO
- Would likely have the required liquidity to support DynaSets
- Fully backed 1:1 by the US Dollar
CON
- Fully Centralized
This list only scratches the surface of possible options that could be included. Maybe you don’t agree with our pros and cons? All the coins mentioned here and any that are not, can be suggested and debated by the community on the SingularityDAO Forum here.
How to Vote
This has been postponed until Jan 2022 to give time to collect more proposals
On Thursday 9th of December 2021 we will hold a vote on Snapshot to determine SingularityDAOs’ favoured stablecoins. From the list of coins available to vote on, the top 3 will be added to our “Stable Set” alongside both USDT and USDC. It may be in the future that we hold further votes to increase the number of tokens included.
Recently, all available development time has gone into delivering our DeFi platform and of course DynaSets. In the future we will be building and fleshing out our own governance portal and voting mechanic but for the time being we will utilise Snapshot. We hope you all will take part to show the size and power of the SingularityDAO community.
Closing Thoughts
The day is fast approaching, that being a DAO member will be a truly powerful thing. Not just at SingularityDAO but in the blockchain powered world of tomorrow where we could see cities or eventually even countries governed by Decentralized Autonomous Organisations. With this in mind it’s important to consider a few things. The above pro’s and con’s were written by a human and thereby subject to personal bias. For this reason, it is always advised that voters do their own research and take accountability for the outcome of such events. With the explosion of growth in crypto and the concurrent increase in scams to go alongside it, this has never been more true. Do your own research and take ownership of the outcome. As the world becomes more and more decentralised the power will slowly shift into our hands. We all must do our part to be conscious of the power we are being given, as all true DAOs should.
With that said, we have a wonderful community at SingularityDAO and have no doubt that the vast majority of you are already well aware of this. We can’t wait to pass more and more control into your hands.
Goodluck!
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