I think I have found the best solution to create an Incognito StableCoin.
However this would require additional feature implementation that we currently do not have.
The Idea:
Users are able to exchange USDC, USDT, and DAI, 1:1 for an Incognito StableCoin. When this exchange happens, the original StableCoin (USDC|USDT|DAI) will be put in to a vault. The Incognito StableCoin is then minted on the spot and given to the user.
The coins in the vault get added to liquidity (via one sided provide) and gain rewards. Since the rewards are in PRV, we can take the earnings and add it to the liquidity of the Incognito StableCoin. All you have to do is mint more of the Incognito StableCoin to pair it with the earned PRV, this can be done automatically. As time goes on, more and more liquidity will be added to the pool.
If the markets aren’t regulating the price correctly,
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We could open up the vault to have reverse exchange’s, from Incognito StableCoin to other StableCoins. (I think there should be a variable fee charged for this conversion as we want to incentivise doing transactions through PRV on the open markets instead of through the Vault)
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We could allow the Incognito StableCoin to exit the network via an ERC-20 smart contract. This means 3rd party’s could regulate the price as well, making the StableCoin public.
This would give us the advantage of not being at risk from government blacklists. If Incognito’s USDC address’s got blacklisted for some reason, the pUSDC still works on the network, and all the liquidity can be exchanged for our Incognito StableCoin instead. If it can exit on the Ethereum network via smart contract, even better.
What do you think?
It would also not be bad if people transferred their USDC/DAI/USDT to the vault every time they wanted to trade to the Incognito StableCoin. The bigger the vault becomes the more liquidity that would be generated for the Incognito StableCoin, and it’s not like the coins disappear. They get added to liquidity. However it would be best to incentavize when selling Incognito StableCoin to go -> PRV -> USDC/USDT/DAI, that way we keep PRV useful and the vault doesn’t get hit with any potential losses from withdraws.