Polkadot Decoded Recap & Followup
Polkadot Decoded has finally concluded. Hyungsuk Kang, our Founder & CTO, has presented his vision on the topic “Building Algorithmic Stablecoin at the Highest Standard.” For those who have missed this chance to see him live online, here are some of the highlights.
Challenges in Stablecoins
There are three (3) major forms of stablecoins in the market, and each of them faces unique challenges.
Fiat as Collateral
Backed by fiat treasury, fiat-collateralized stablecoin usually maintains a 1:1 fiat-to-token ratio. However, because a centralized authority is needed to verify that it has sufficient assets, such fiat-collateralized stablecoin faces similar limitations as traditional CeFi.
Crypto as Collateral
Crypto-collateralized stablecoin is the most notable way in maintaining stability for stablecoins; yet, interoperability is lacking and liquidation may not be transparent. This results in an inefficient market.
Algorithmic
Algorithmic stablecoin is a new generation of stablecoin which relies on a pre-set algorithm and protocol to maintain the peg. However, creators of the stablecoin would rely on manual adjustment but usually contradict censorship resistance. Again, this does not create a win-win situation for the market.
Now the question is — what if there is a protocol that utilizes the advantages of all three (3) types of stablecoins without their challenges?
Here comes the Standard Protocol
If you have been our members for some time, you should be quite familiar with how Standard Protocol works. In his presentation, Kang explains a little bit more about how Standard Protocol attempts to resolve these challenges with a strong vision.
Be Bridges
Standard Protocol will bridge between Cefi and Defi. We have onboard a Korean bank as a strategic partner and plan to establish a seamless experience to allow users collateralize their fiat currencies in a bank account directly for our stablecoin. In other words, we enable Cefi with Defi capacity but not the other way round.
Be Transparent
To enable market efficiency and to ensure the transparency of collateral liquidation, we are building our own DEX to facilitate collateral liquidations to the public market without auctions which have high barriers to entry. We also have the vision to stay chain-agnostic beginning with Polkadot as our first step. Cosmos, Solana, and even Ethereum, could be next, whichever works best for Standard Protocol in the near future.
Be Robust
We believe a hybrid model, combining both collateral and a censorship resistive rebase mechanics, to improve overall stability. We will apply the algorithm to govern the total supply on a macroscopic level, while adjusting the price (relative to the peg) microscopically in a market driven approach through our ecosystem.
If you want to watch Kang’s first-person explanation, here’s the video for your leisure.
Now, what’s next?
Stablecoin design has been a big topic in Defi, and it’s our ambition to solve its stability in one grand design of ecosystem. We completed our IDO a month ago, and our team has devoted themselves in product since then…
We are aiming to live on Kusama within two months.
Stay tuned, stay safe, and hold tight to your $STND during the recent storm. You might not want to miss the coming news!
About Kang
Hyungsuk Kang is a software engineer with strong background in cryptocurrency, blockchain, and distributed ledger technology. He is the CTO and Cofounder of Standard Protocol, Polkadot’s first stablecoin based synthetic asset defi protocol. He is also a software engineer at Plasm, Head Ambassador for East Asia of Polkadot, and Co-founder at PolkaKR. With his versatility from over 5 years of research and development in software and cutting edge industries, he enjoys solving technical challenges.
About Standard Protocol
Standard Protocol is the first Collateralized Rebasable Stablecoin (CRS) protocol for synthetic assets that will operate within the Polkadot ecosystem. It is also the first and only project from Korea to be awarded a Polkadot Web3 foundation grant and prides itself on its global community growth approach.
To learn more about Standard Protocol: Join us on Telegram (Community), Telegram (Announcements), Twitter, Discord, and Clubhouse
Read more on our website and whitepaper
