With the ever-rising scrutiny of stablecoins by U.S. regulators, crypto investors and enthusiasts continue to propose new stablecoins that are free of the American dollar. One of these individuals who are bent on developing such stablecoins is the co-founder of BitMEX, Arthur Hayes.
Hayes believes that stablecoins are much more in need than fiat USD. According to Hayes, stablecoins are good solutions for a very real pain point in the crypto capital market. The regular crypto commentator said the issue with stablecoins is that no trustworthy banking firm is willing to launch its digital token.
He has come forward with a new stablecoin that will have a value of $1 worth of BTC and an inverse perpetual swap of Bitcoin against the U.S. dollar.
According to Hayes, as the value of Bitcoin in USD increases and approaches infinity, the value of the swap in Bitcoin terms approaches 0.
Hayes’ announcement, which outlines the idea of the stablecoin, states that the proposed Satoshi Nakamoto Dollar (NUSD) will maintain its 1:1 peg to the American dollar through mathematical transactions between authorized parties in the NakaDAO and derivatives exchanges.
The DAO will have a native token NAKA and a legal entity since it would require a profile on each exchange. Hayes stated:
“The DAO would need to have its own opinion on what the USD value of Bitcoin is on a spot basis. This would inform how many swaps are needed to properly create units of NUSD.”
The NakaDollar will be completely void of any USD movements; thus eliminating the presence of banks. However, the potential stablecoin would not be decentralized.
“The points of failure in the NakaDollar solution would be centralized crypto derivatives exchanges. I excluded decentralized derivative exchanges because they are nowhere near as liquid as their centralized counterparts”.
The BitMEX co-founder went further to say that there is no need for complete decentralization. According to him, there is no need for overcollateralized stablecoins such as MakerDAO / DAI and algorithmic stablecoins such as TerraUSD.