0 sats \ 0 replies \ @notgeld 6 Oct 2023 \ on: Design for algorithmic stablecoin backed by BTC bitcoin
In order to maintain the peg, we limit trades that may weaken the peg indirectly
So basically, it should be illiquid. This is a very old post about the topic.
https://medium.com/@bob.mcelrath/on-the-in-stability-of-stablecoins-517b7d17c3ee
Onchain/LN liabilities + Perpetual Futures are probably more robust than that.
https://notgeld.medium.com/when-sats-become-the-standart-83585494f3af
This is what we have done in Valet initially. Currently, we are hedging our liabilities on the spot market. Unfortunately, perps are very KYC-ed, or otherwise, exchanges aren't liquid enough.
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