Designing Autonomous Markets for Stablecoin Monetary Policy
Duration: 00:26:43
Speaker: Ariah Klages-Mundt, Steffen Schuldenzucker
Type: Talk
Expertise: Advanced
Event: Devcon
Date: Oct 2022
We discuss the design of primary (i.e., minting and redemption) market mechanisms for non-custodial stablecoins. We first introduce a new analytical tool, the *redemption curve*, which represents the redemption price as a function of redemption pressure. We use it to discuss historical de-peggings (e.g. in DAI, UST). We then describe a new dynamic redemption curve with desirable robustness properties and show how to implement a primary market based on this curve. The system is part of Gyroscope.