Hi guys as per suggestion here is a new feed to discuss stablecoin, lUSD peg 1:1
Quick overview; Its agreed that this is one of the foremost concerns of the community as it acts as a barrier for new investors to our ecosystem.
To achieve peg we need to increase use cases for the lUSD stablecoin, currently liquidity on pancakeswap shows that there is a balance of circa 287k busd v 395k lusd so 100k difference. We would need around 50k busd in and roughly the same of lusd out to get the peg correct.
Suggestion to use some of the unclaimed rewards to help remedy the above discrepancy, so perhaps the 10% burn goes toward re buying lusd instead. Will check numbers tomorrow to get some clearer figures of impact. Currently 10% of unclaimed rewards would be around 6m Lina so 124k at todays prices.
This would of course create some negative price action on Lina itself.
Please add suggestions below, thoughts on this or other suggestions related to this topic.
Hi @JPR and thank you for initiating the thread on that topic. I want to share some thoughts about it.
I don’t think we will need as much as much money as 10% of the unclaimed rewards of a single rollover to achieve that goal. Because of the low value of lina and current the overall ratio over 500 it should be possible to manipulate the value of lUSD very easy, because there is simply not much supply. But that’s only a guess. Maybe someone has the economic insights how much money would be needed to achieve that goal.
Another point which we have to keep in mind. The announcement of the implementation of a “peg protection pot” (thank you @Bowser_LinearFinance for that perfect summary!) alone, would attract some buyers to front run that implementation. This will affect the price without doing anything in a positive way, because that would be a secure 30% win for the smart buyer.
Overall I think this could result in a very effictive way to stabilize the peg of lUSD long term. Even in times where the peg is above 1USD. In that case the DAOs treasury would profit from the mechanics.
Another interesting idea would be an implementation, where the $LINA which (in case of an >1$ peg) would be bought back by lUSD could be burned directly. This could result in a deflationary supply, which will automatically adjusted by the efficiency of the Eco-System. This would equalize the short term price preasure on $LINA, because all the $LINA invested in lUSD plus the “peg price gap” would be long term gone.
Hope to hear other ideas on that topic!
Best regards
