[Proposal] Add Pro-rata burn to USD at a certain threshold

Hi Everyone,

I wanted to propose/discuss the option of implementing a function similar to other elastic protocols of adding a negative rebase to the dollar protocol. I think that by adding a negative pro-rata function we may be able to recover.

The current problem is the lack of USD in the USD/SHARE pool for USD burn for discount SHARE to be viable in the current market. Even if the 90k USD in the USD/SHARE pool were burned that still wouldn’t return us to the peg. The real problem is the amount of USD in the USD/ETH pool (and other mining pools) and not enough demand.

By implementing a pro-rata negative rebase on USD we can reduce the supply of USD to a point where supply = demand again. The one factor I’m not certain on is where the threshold to trigger this feature should be. Should it be once discount share hits 50%? Should it be after 1 month of negative rebases? If you think this is a viable strategy let me know your thoughts.

Thanks

I think that no one would use a stablecoin that has such mechanism in its DNA. Your USD value is at risk, but any upside is for SHARE holders.

Then what do you propose to get back to peg with 0 demand? It would only be necessary in extreme times/at the beginning of the project. If its built in algorithmically its just like a negative interest rate backstop.

This project is predicated on infinite growth to survive. It needs to be able to contract supply in the event SHARE fails (which it is).

I haven’t found the solution yet but the closest thing is the Algorithmic Treasury.

SHARE holders have enjoyed the profit and didn’t take the precaution to plan for bad times.

USD can’t have the speculative scheme that AMPL or BTC enjoy because there is no upside. Therefore we need to anchor that to outside money (ETH in my example) so that the inside money (USD) keep its value. Maybe some fractional banking of some sort can help, I don’t know.

Algorithmic Treasury is great but it only works if we get back to positive rebases and the only way to get back to positive rebases is to reduce USD supply/increase USD demand and the only way to reduce USD supply is to burn USD either for SHAREs or just taking it out of the system pro rata.

With zero demand burning of USD should be enough to drain out USD from the liquidity pools to push USD price higher.

shared some thoughts here Remove SHARE-USD pool to make burning USD and its affect on price more efficient

have a look and share your opinion.