Idea for stable coin

[ubiubi18]

💡 What about a 'stable' coin on top of idenanetwork, that allows people to reduce volatility risk - but without exiting the idna chain, only collaterized by idna itself?

I imagine it that way: People are able to swap their balance by adding idna into a contract that instantly mints that new 'stable' coin according to the payout formula

D / (A / Y)

with
D = dedicated idna funds that you lock  into contract to mint 'stable' coin
A = amount of coins minted daily  networkwide (51840)
Y = as yet validated identites

If you wish to swap your DAY back into idna at some point in the future, you likely wont receive exactly the same amount of idna you once added though, but an amount dependent on current network size. Less idna, if the network did grow meanwhile, more idna, if the network did shrink meanwhile. So it would not really be completly stable, but 'more stable' than idna/$.

Reasoning:

Looking at last 12 month price behaviour of idna at exchanges it turns out that the hypothetical daily mining reward in $ allways was less volatile than the the (hypothetical) trading pair idna/$ and than idna/btc.

People who seek save haven from idna volatility so far tend to exit the idenanetwork into other cryptocurrency. But that comes at expenses of high fees and constantly drains investors money out of idna.

If we could create a 'save haven' onchain,  it would give swingtraders the chance to stay onchain , swaping into DAY in times of bust while swaping back into idna in times of boom , and in the long run it would give businesses a chance to use that DAY as less volatile coin to store value onchain. At some point in the future, secured by median reward expectations and arbitrage trading, it is even possible that it would turn into a real stable DAY/$ coin in my opinion?

Why does that 'more stable' daily reward exist in the first place?

I guess it is selfsustaining, because majority of idena identites meassures the attractivety of their daily rewards in idna/ $. So higher idna/$ price incentivies more people to join and network will grow faster (shrinking your daily idna reward). Shrinking individual daily $ reward again on the other side results in more people abandoning the effort, so the daily reward in idna for the remaining participants will potentially grow again.

With smart contracts anyone interested could try to build something like that. But maybe it is interesting for devs themselfs? 💡

[ubiubi18]

For sure the idea has some flaws that would require more complexity to deal with. Like the compensation with more idna on shrinking network must be caped dynamically, not to drain completly empty the mechanism worst case. Also people shouldn't be able to profit on swaping back and fourth while selfkilling their identity. Likely there are more flaws?