Messari: Solana stable currency agreement uXD how to solve the ternary paradox of stable currency?

Chain catcher 2022-04-04 15:06:03 阅读数:975

messari solana stable currency agreement

The original author :Dustin Teander、Anirudh Tiwari

The original title :《UXD - Tackling the Stablecoin Trilemma

compile : Zeyi , Chain catcher

Stable currency is one of the most important aspects of the encryption industry . stay CEX and DEX On , All major trading pairs are denominated in stable currency , The trading volume is usually more than stable BTC and ETH Trading volume of . Up to now , The stable currency is DeFi The most borrowed assets in the , stay Aave On loan USDC yes ETH Of 27 times . stay Yearn in , The stable currency vault is the most popular revenue vault , and , Almost all of the most popular derivatives transactions are backed by stable currencies .

Stability currency is the whole  DeFi  The cornerstone of the world .

However , There are differences between various stable currencies , There are trade-offs in the design of each stable coin , In three aspects : De centralization 、 Stability and efficiency . The three constitute the three dilemmas perplexing the design of stable coins , Because the optimization of one aspect usually leads to the degradation of the other .

To be specific , The meaning of the three dilemmas of stabilizing currency is :

  • De centralization : How much does the stable currency depend on the centralized system ?
  • stability : Whether the stable currency can keep the price anchored , Without much change ? Especially during market fluctuations , At that time, there was a great demand for stable assets .
  • efficiency : How much money is needed to ensure a stable currency ? The more money you need , The less efficient , vice versa .

Stable coins are mainly divided into three categories : Stable currency supported by legal currency (Fiat Stables)、 Excess mortgage stable currency (Collateral Debt Position Stables, namely CDP) And algorithmic stability (Algo Stables).

The stable currency supported by legal currency consists of the corresponding legal US dollar of the traditional centralized entity ( Or other currencies ) Support . for example ,USDC By the corresponding  TradFi The bank issues or destroys , These banks are responsible for maintaining cash and cash equivalents in custody , To support the issued stable currency .

The excess mortgage stabilization currency is issued by the decentralization agreement , These agreements accept collateral and issue debt in the form of stable currency . Support  CDP Collateral usually exceeds the amount of stable currency debt issued , To protect the agreement from fluctuations in the price of mortgage tokens . All in all , The excess mortgage stabilization currency is supported by the collateral deposited by individual users .

Algorithmic stable currency has the widest range of applications , Each algorithm has significantly different properties , Rely on the combination of game theory and mechanism system to ensure the stability of tokens .


Because the stable currency supported by legal currency needs a reliable centralized partner , Excess mortgage stabilization currency requires excess assets as collateral , therefore , The stable currency of the algorithm is  DeFi It provides the best opportunity to solve the dilemma of stabilizing the currency , If you can have an extensible 、 Decentralization and efficient stability . Compared to last year , The demand of decentralized market for stable currency that can solve the three dilemmas and maintain long-term viability has soared .


2021 Fourth quarter of 2007 , The market value of algorithmic stabilization currency has increased 260%, Far more than the stable currency supported by legal currency and excess mortgage stable currency , The market value of the latter two has increased 18% and 87%. According to this growth rate , Algorithmic stable currency will exceed excess mortgage stable currency in the first quarter of this year , Become the second largest stable currency category .

however , There is a significant difference between the supply of stable currency supported by legal currency and algorithmic stable currency , The market value of stable currency supported by legal currency is about the same as that of excess mortgage stable currency and algorithmic stable currency 10 times . This value gap is a market opportunity for algorithmic stable currency , More efficient scalability will emerge this year .

at present , The leading algorithms are UST、FRAX and FEI. Each uses a redemption mechanism , Balance supply and demand , To maintain the stability of currency price . for example ,UST By casting or destroying Luna In exchange for UST, So when UST When the trading price of stable currency exceeds the anchor point ,Luna We can use 1:1 The ratio of US dollars is destroyed and converted into UST, Sell for a meager profit . under these circumstances , The forces of supply and demand will make UST The price is closer to the anchor point . This mechanism ensures UST Always keep 1 The price in US dollars , Use Luna Absorbed the supply and demand fluctuations that plagued the stable currency .

Frax And Luna The redemption mechanism is similar to , but FRAX In the algorithm, the floating charge factor is used for mortgage . The mortgage factor simply defines how many dollars worth of collateral support the stable currency FRAX. When the mortgage factor is 1 when , Every time FRAX The reserve corresponds to one dollar . With the decline of mortgage factor ( Through design to effectively expand ), Every FRAX The collateral required will be reduced .

Redemption will be netted from the agreed collateral pool 0.75 dollar , And value 0.25 The casting of dollars FXS, Every redemption FRAX , The total value is 1 dollar .Frax The protocol also adopts other mechanisms that contribute to the stability of the protocol , Use collateral in market operations , Such as liquidity reserve 、 Investment or loan ,Frax Call these modules AMOs.

With V2 Release ,FEI A redemption mechanism has also been deployed , As the main stabilizing force of its algorithm to stabilize currency . And FRAX Different ,FEI Value controlled by its agreement (PCV) Reserve excess mortgage , The reserve consists of a variety of assets , Ranging from DAI When stable assets arrive ETH And etheric fang DeFi Volatile assets such as tokens .PCV Can be either for FEI Of 1:1 Provide funds for redemption , You can also inject liquidity into the trading pool , Guarantee FEI Can make a lot of transactions .

because PCV Volatility of collateral ,FEI It can be changed from over mortgage to under mortgage , At this time, the redemption will be made by the newly cast Tribe Funding . Redeem make FEI The ratio of supply to collateral is at least 1:1 Of , And also for FEI Provide stability mechanism , Because market volatility affects collateral and FEI The ratio of supply to demand .

Redemption is the key stabilization mechanism for the current algorithm to stabilize the use of currency , Take one or a combination of the following methods : Volatile collateral (FEI)、 Insufficient collateral (FRAX) Or by replenishing tokens (UST) Volatility absorption mechanism .

Algorithmic stability requires this mechanism , Because these agreements are not consistent 、 Guaranteed 1:1 Collateral . Why does the stable currency supported by legal currency not need complex stability mechanism ? Because no matter how the market fluctuates , Every stable coin has 1:1 Cash asset support .

that , Why can't algorithmic stability currency be supported without centralized cash , Create the same assurance support ?

UXD Stable currency

UXD It was recently launched Solana Native stable currency agreement . UXD It aims to solve the Triple Dilemma of stable currency through unique algorithm design , It uses 1:1 The proportion supports similar stable assets , Instead of relying on redemption methods to absorb volatility .

Every UXD Tokens are used by one Delta Sustainable derivative position support of neutral strategy .

Although it sounds complicated , But the design is actually quite simple . Users will SOL Wait for the collateral deposit agreement , Every deposit 1 The dollar SOL, Will receive 1 The dollar UXD In return . then ,SOL Deposited into a perpetual Trading Agreement (Mango Markets) As collateral , Then with the deposited SOL Reverse short positions at the same value . therefore , If SOL The price of... Fell -10%, Deposited SOL The collateral will lose -10% The dollar value of , However , meanwhile , Short positions will receive +10% The dollar value of , Lead to UXD The net movement of collateral in US dollars is 0.

Net relative to underlying assets 0% Mobile is Delta The definition of neutrality . actually ,UXD Agreement simulation uses stable assets as collateral , But with unstable assets , Enable it to use decentralized assets 1:1 Support every UXD Tokens, .

When users want to UXD When converted into collateral , The process is the opposite . The user destroys on the protocol UXD, In return , Will receive an accurate dollar value SOL Or the mortgage token they choose . In order to return the user's SOL, The agreement is closed on the sustainable trading platform SOL Short positions , In exchange for the destruction of UXD The exact dollar amount , Released SOL The collateral was withdrawn to UXD agreement , here , It is returned to the user .


therefore ,UXD Our supply is comparable to  CDP Stable currency is faster 、 Expand... More effectively , Because they need more dollar value collateral than the issued stable currency . Have 1:1 Stable asset backed  UXD  It should be closer to the stability of the stable currency supported by legal currency , But there is an added benefit , That is, decentralization and anti censorship . Compared with other algorithms that rely on redemption and secondary tokens to absorb volatility , This same stability property is an additional advantage . Mechanisms like this are very complex , And in the past, when there was high volatility , There will also be pile breakage .

In view of the three difficulties of stabilizing the currency, build  UXD Token framework :

  • De centralization :UXD Use decentralized assets to form a stable dollar position (Delta Neutral ),UXD The protocol itself is designed to be decentralized , Its overall decentralization depends on the perpetual contract agreement it uses .
  • stability :UXD The collateral in is traditionally unstable , But it is stable through the synthesis of derivatives , Recreated the reliability of the stable currency supported by legal currency , Instead of relying on central suppliers . Besides , The design of the agreement depends on the security of the mortgaged assets  1:1 Support guarantee , Not involving unsecured assets (FXS and  LUNA) Complex redemption mechanism , The latter has only a short history of fighting volatility .
  • efficiency :UXD  The proportion of each is 1 US dollar collateral deposited in 1 The dollar  UXD, This is much more efficient than the excess mortgage stabilization currency . although 1:1 The mechanism is conducive to stability , But it's not as efficient as  FRAX  Such a floating charge factor stabilizes the currency , The latter each 1 The stable currency of the US dollar can be less than 1 Collateral for dollars . A sustainable market large enough is  UXD  The main constraints of scalability , Not collateral .

In order to make the agreement have long-term vitality , A source of income is needed to adjust incentives and fund growth .UXD The agreement is not intended to charge users , But from an integral part of the sustainable exchange —— Absorb cash flow from capital rate .

The fund payment of the sustainable trading platform is due to the representative of the traders of the exchange in the trading token , Not the actual token . Since there is no actual token involved , The market price of the perpetual exchange may deviate from the real market price of the base token . In order to keep the price consistent , Introduced a kind of capital payment , Its change is related to transaction imbalance .

If the traders of the perpetual exchange have too much weight in the long side ( This often happens in cryptocurrencies ), Then the capital payment will be positive , Among them, long traders pay a certain proportion of the fee to short traders . This mechanism encourages traders to take the unpopular side of the transaction , The effect is to push the price of the perpetual contract trading platform back to the real market price .

Because money has historically been positive in the cryptocurrency market , It means something like  UXD  In this way, traders holding short positions will receive funds from traders holding long positions . However , This is not always the case , When money becomes negative ,UXD  The agreement requires a mechanism to pay for funds , Without affecting UXD The holder . So , An insurance fund was adopted , The fund is in  UXP  Token  IDO  Got enough money from sales (5700 Thousands of dollars ).

Overall speaking , Like many stable currency items ,UXD It aims to promote the landing application of stable currency . Application cases mainly focus on financial purposes , Not speculation or reward tools . for example , Debt denominated in stable currency drives the actual use of , Because the borrower then uses stable currency in the exchange , And continue to hold stable currency , Because their debt is denominated in tokens . This has driven a deep money market pool ( To loan ) And liquidity AMM pool ( In exchange for ) The needs of . The use of less yield involves mortgage and income farming , This drives liquidity , But in the end, it's unstable 、 The use of short-term camouflage .UXD The released roadmap focuses on promoting long-term and healthy development through more applications of stable currency .

UXD The token model

UXD Agreement is made UXP Tokens to manage .UXP stay 11 month 14 At the end of the day IDO On sale in , from 3676 Investors raised more than 5700 Thousands of dollars . stay IDO The funds raised in are directly used in the insurance fund , The fund is responsible for supporting any negative capital payment and agreement loopholes on the sustainable trading platform . according to UXD file , The current size of the insurance fund will be able to maintain 5 $ UXD One year -11.4% The interest of . The management of insurance funds is about to be established UXP DAO The responsibility of the .

except IDO Money ,UXD Also from the famous solana Ecosystem investors Multicoin、Alameda Research、Defiance Capital、CMS Holdings、Solana Foundation、Mercurial Finance、Solana founder Anatoly Yakavenko and Raj Gokal, as well as Saber DEX founder Dylan Macalinao Where did you raise money 300 Ten thousand dollars seed round financing .


UXP The holder will be UXD DAO The sole governing body . therefore , The holder is responsible for managing the insurance fund and participating in management actions . Potential management moves may include adding new exchange integrations , Add a new collateral type , Agreement revenue management , And the overall improvement of the agreement .

UXD The revenue of the agreement comes from two main sources . The first is the positive capital payment due to the short position of the perpetual exchange . Funds in cryptocurrencies have always been positive , This means that in the long run , It can be expected that UXD Rely on this source of income as the main source of cash income .

UXD The second form of income from the agreement comes from the active management of the insurance fund . For business operations , Insurance funds are usually idle , It will only be used when the capital grows negatively ( Where are short-term traders perp The long-term overweight of the exchange ). In order to improve capital efficiency ,UXD Will explore the asset management strategy of insurance funds . however , In the end UXP The holder decides the management of the insurance fund . 

Challenges to the agreement  

In addition to the general smart contract risk , image  UXD Such an agreement also faces some key challenge areas , Not only to play a role , And effectively expand to the scale required by the stable currency agreement .

Sustainable market size —— at present ,Solana The interest on the open position of the perpetual trading agreement is about 3000 Thousands of dollars , and Mango all L1 The open interest in the token market is 1700 Thousands of dollars ,Drift Protocol by 1100 Thousands of dollars . The market value of a stable currency needs to be close to 10 Billion dollars to be considered successful , And is considered to have sufficient liquidity , Can be widely used .

In order to make UXD Achieve a significant level of adoption ,Solana The market activity volume of the perpetual trading agreement needs to be greatly expanded . Under the current sustainable market scale ,UXD It will almost certainly make the capital rate of the exchange negative , Because it will cause an imbalance of positions to the short side . However , This will attract more traders to trade at cheaper capital lending rates , So here's a self referential rule of the game , Can expand at the same time UXD and Solana The market for perpetual contracts .

Negative capital rate —— Again , When the capital rate of the perpetual exchange becomes negative , Need UXD The agreement itself pays for . Usually , Due to the much greater demand for asset bulls , The financing rate of cryptocurrency is positive , under these circumstances ,UXD The agreement will earn additional money by paying traders money . However , If UXD The size of the exchange is larger than that of the exchange OI, So there is a real possibility that funds will be driven to negative numbers , The agreement will be paid .

To deal with this possibility , Enough money has been deposited in the insurance fund , To cover the negative capital period ( This situation has not been long in history ). In the event that the insurance fund is exhausted in the payment of funds , additional UXP Will be auctioned to replenish the insurance fund . Even in this unlikely case , The insurance fund will not be exhausted quickly through capital payment ( There is no lightning collapse , Only fairly predictable payments over a known period of time ), therefore UXD Holders are almost always able to redeem collateral .

Exit liquidity —— Related to the size of the exchange , There needs to be enough reverse liquidity , In order to UXD Release its short position . According to design , Every time a user deposits collateral into an agreement ,UXD Will establish short positions , But when UXD When holders want to exchange stable currency for their collateral , Short positions need to be released , The collateral needs to be returned . Do that , Exchanges need liquidity ( Users or market makers ), Willing to offer to UXD Agreement to sell tokens . This risk is more common when the market fluctuates .

Financial management ——UXD As a protocol, it is not designed to start from UXD Users make money there , But to manage its collateral ( Positive capital rate ) And insurance funds . As insurance funds are deployed in asset management strategies , The advantage is obviously the capital appreciation of the fund scale . However , On the other hand , There is a risk of introduction , The risk to the fund needs to be taken into account . This is not a big problem , Because presumably , The fund will be deployed in a low-risk strategy , The only risk worth noting is smart contract risk .

UXD Supply and demand —— Every stable currency is affected by fluctuations in demand , This may cause the price to deviate from the benchmark . What matters is the ability of the agreement to absorb price fluctuations through the redemption mechanism , To maintain the link or the user's confidence in the future redemption ability ( Legal currency, stable currency ).UXD Provides these two ways , But as a growing stable currency , It is still affected by risk —— Especially in its early stages , When concentrated UXD Quantity ratio UXD When the supply is large , Will experience more fluctuating pressure .

Looking forward to the future

UXD It provides a unique solution for the development of stable currency . With Solana Continue to build its DeFi The ecological system , Having a truly decentralized native stable currency will greatly benefit the whole ecosystem . The market demand for this type of solution is increasing rapidly , Not just in Solana, And in the whole DeFi, Because both projects and users are looking for stable assets without centralized risk , And make the ecosystem benefit synergistically .UXD It is possible to reduce transaction costs and provide sufficient stable liquidity , Push Solana The already booming derivatives market has entered new areas .

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