The current problem with stable cryptocurrencies is that they rely upon trust in a central authority, usually an exchange. Examples would be Tether and Coinbase's USDC Now the problem with this is obvious. In Tether's case, it's all but certain to be a total scam.
They claim it's backed by USD but there's no way to verify this and it's pretty obviously bullshit, could collapse at any time. In the case of Coinbase Coin, that's more "legitimate" insofar as I'm sure they have some kind of transparency around that, it's auditable, etc, but it's not FDIC insured and if Coinbase got hacked or went bankrupt suddenly there's nothing backing the coin and you're fucked.
So the problem to be solved is ensuring stable value in a trustless way. We want some way of ensuring that there's a "close enough" 1 to 1 exchange rate of this stablecoin to a currency or currencies without relying on a central authority.
To do this, you create a token that relies upon a decentralized oracle service like ChainLink to algorithmically determine a stable "value" vs a major currency (e.g. USD) based on real life cost of relatively inelastically valued goods denoted in that currencies. And because you have immediate access to an immutable record of the value of those goods, you can then also correct for fluctuations in the value of certain things, account for variances in purchasing power in different areas that use reference fiat currency/currencies as a medium of exchange, etc.
Miners (or stakers, preferably, whenever someone figures out a working PoS implementation) could be given definite rewards in relation to this value. OR, maybe you can circumvent needless mining/staking energy altogether and simply compensate people for acting as nodes on the network, who rent computing power to oracles for data used to determine the value of the coin, then get paid back in an amount of the coin that remains "stable" w/r/t real world purchasing power.
Also since the computing power would be spent on non-trivial data transmission and calculations, you could do this on consumer hardware, like Monero. You wouldn't have to chase after ASIC-resistant meaningless problems-to-be-solved since the upkeep of the network itself requires constant computation of real time data.
The part I'm still trying to understand conceptually, and this is a gap in my current understanding of how decentralized oracles work, is ensuring that this stable value is guaranteed in some form. And the idea I have in my head is: the coin itself is connected to a currency exchange that uses ChainLink smart contracts as a gateway to fiat payment providers (Square, SWIFT, PayPal, whatever) but instead of putting in buy/sell orders at variable prices there's just a single, algorithmically defined, autonomously updating exchange rate.
An open question is whether this could be done in relation to multiple major currencies, or whether you would have one chain per currency, or whether the algo would be "just figure out how much to exchange for USD".
The idea here is that the currency does NOT become a speculative asset but instead is a truly reliable store of value AND medium of exchange.
Cooper Foster
Probably one of the smarter posts regarding chainlink. Bullish as fuck.
Jackson Hall
You do understand there is a new stablecoin based on stable purchasing power that will rely on chainlink data for the price of bread, gold etc. globally, right?
Imagine the ability to preserve purchasing power independent of the existence of a nation
Jordan Mitchell
What’s it called?
Michael Phillips
crypto oracle faggot is back at it
Landon Cook
Thanks man, but I am basically a brainlet when it comes to crypto including chainlink and the stablecoin landscape. This is just something I thought up at the gym, and I'm posting it here since people are generally pretty brutal so I want to know what the flaws are / where are the gaps in my thinking.
The interesting this about this is that if it's feasible, it is indeed bullish as fuck for LINK but the outcome itself would be a coin that would ideally never really raise or fall in value. Yet because it would 1) allow frictionless, secure, trustless, low-fee digital payments, 2) replace Monero as an adblock substitute (by browsing this website you consent to act as a stablelink node etc) 3) obviate Tether etc overnight, it could potentially revolutionize global finance and payments. (Again, waiting for people to explain why this is poorly thought out)
>You do understand there is a new stablecoin based on stable purchasing power that will rely on chainlink data for the price of bread, gold etc. globally, right? I don't, haven't even heard of this. Sounds pretty much like what I'm talking about. What's it called?
Xavier Clark
Now watch that leftist piece of shit cap his posts here and then post them on Twitter.
Jayden Clark
you don’t understand how any of this works, there is no way for a data feed from an oracle to force an uncollateralised stablecoin token to have value, there is no way to force someone to be the buyer of last resort if the market loses a purely faith-based peg.
the use of oracles in stablecoins is to provide a feed of the value of the collateral asset (i.e. $/ETH) to control the on-chain contracts governing collateralisation, token generation, and liquidation.
Chainlink can and probably will replace the current ad-hoc hand rolled oracle system used in MKR DAI, which is the admitted weak point of the system.
Mason Russell
btw, I was basically kinda ehh on chainlink before thinking this up and realizing holy shit this is a technology that *literally* could not exist without something like ChainLink.
and I know a lot of people don't care about this but I like the idea that this would basically solve the environmental problem with most cryptos overnight, since rewards would be allocated for the computing power needed to act as a node / ensure calculations and upkeep, not to like, solve some prime number long division puzzle.
even if this specific idea wouldn't work it's pretty cool that LINK enables things like this if just in theory.
