We see Lightning as the "lingua franca" to connect between different layers.

The most common use case for stablecoin is for merchants to be able to accept Bitcoin but convert on the go to a stable MoE/UoA.

We are going to explore submarine swaps between LN and Liquid, to allow the merchants to accept Bitcoin LN and instantly swap to a stablecoin such as Fuji USD on Liquid. Viceversa the merchant can pay suppliers via LN swapping again on the go.

Bitcoin will become the ultimate stablecoin.

There is no such thing as a "decentralized stablecoin". If it's a stablecoin, there must be some central entity backing it. Alternatively, if there is some algorithm that controls the supply based on the exchange rate, there must be some central oracle that reports (signs) the exchange rate on-chain.

I think we should start talking about it in terms of a distributed stablecoin rather than a decentralised one. Not just for avoiding the negative connotations of “crypto decentralisation” but also because it more accurately reflects the technical behind this. It isn’t decentralised like Lightning or Bitcoin, but would be spread out.

Specifics aside, what we’re doing on Taro at Valera starts with the centralised stablecoins. Tether, USDC, etc. Distributed stablecoins, especially those that don’t use shit models, are a lot more difficult to make.

Which means there’ll be a lot of specialist tech built for each one that either becomes part of the world’s infrastructure or withers away into obscurity.

The way I’d approach this is to have threshold open federation type things acting as signers. What logic you want to add to actually make the stablecoin work inside of that federation is up for research.

"Decentralized" I start to really hate this word. We tend to decentralization, but we'll never reach it. All the scammers "yelling FULL DECENTRALIZED" are full of shit. Censorship resistant is way better word. For Bitcoin network to be 100% decentralized, 100% users would need to understand the full code and run a full node. In that impossible scenario we could yell "FULL decntralized" without lying.

So for the stablecoin maybe we can reach an acceptable level of censorship resistance. To maintain the peg we need central entity or oracles ... Stablecoin will have a role to play for adoption but it's also a trap.

-I don't know of any "third world" country where someone can use USDT or USDC in many convenience stores. Therefore, I don't consider the kind of onboarding happening right now as beneficial to these countries.

-I dislike the term stablecoin because fiat has no stability other than ennui, preventing more rapid price changes. the notion of creating a decentralized digital asset which mimics the purchasing power of a dollar fails to account into its tokenomics what a dollar even means. More specifically, the stablecoin concept suffers at least one extremely flawed quality: to maintain a 1-to-1 peg between the number of dollars accounted for in a company's assets and the number of stablecoin units minted, the minter must either charge a fee, or try to earn money on the "assets" which necessarily comes with risk in the underlying instrument. Without resolving this issue, stablecoins serve as little more than a bank, whereas many of us support bitcoin because WE FUCKING HATE BANKS.

Bitcoin doesn't need FIAT currency on it. Yes, people will implement fiat currencies and violently enforce some public acceptance of a peg to bitcoin, but FIAT = FIAT. Not your keys, not your coins. I think we all do well to steer clear of all that horrible crap. Bitcoin needs its own price discovery. FIAT currencies necessarily muddy the waters, and warp value because some people literally get it cheaper than others.

NO FIAT ON BITCOIN!!

Why would I want a stable coin

I can just use US dollars

Can’t we talk about the benefits of drive chain ?

To be honest I understand the implications of a stable coin especially on lightning however you use a stable coin that will not appreciate like a bitcoin keeping you stuck in the same spot for not holding the real appreciating asset which is bitcoin... Now that I'm typing this out to be honest kind of sounds like an attack vector to trick people into not understanding true value and thus being in bitcoin but still stuck in this fiat system...

without Fed or central banks’s engagement, there’s less adoption for sure, I’d even like to see fiat on LN rather in CBDC format, the tech is ready

Probably silly question but how could a stablecoin tied to a fiat base ever not be centralized in some capacity?

Doesn't someone need to make the real decisions on how to keep the peg stable and generate just enough extra profit to make this even worthwhile?

I think fiat over lightning is a really bad idea. I'm surprised more people aren't talking about it. It has so many perverse incentives, its not even funny. I could see it as a convenience layer for a merchant perhaps, but I don't think this fantasy of a bunch of HODLers running a network of exchange nodes is going to go anywhere.

Here's a potential application for it: a:

b:

When merchant ends up with too much bitcoin and needs more dollars:

Here's the problem with this all; How do the fiat channels settle when they are closed if they aren't using a stablecoin? Anytime you open a fiat channel, you'll need to have a written contract with your channel partner to settle manually through your bank.

I'm not sure if it was the right question. You can implement Lightning on any blockchain. First these blockchain has to support stablecoins. Bitcoin doesn't support any stable on it's blockchain so you can't have stablecoin on Bitcoin LN. But you could have LN on stablecoin blockchain.

I know of only one decentralised Stable Coin but you've never heard of it and it is very small with limited amounts on the open market.

Fortunately for me I'm getting paid with it and it's relatively easy to convert it to anything else including moving it to my credit card to spend.

Lightning wouldn't help it though because it already has free instant transactions without limits so I'm not sure what purpose there would be wrapping it in lightning. I'm struggling to understand what a "stable coin on lightning" means when you can already flip these things around at minimal costs and very quickly.