While reading through the submitted works, I gathered a bit of a feedback on each masterpiece. Thought, this might be of use both for the contestants and for the jury.
Submission 1
Low quality “find-and-replace” submission taken from the Anonymous low-volatility p2p E-Cash System white paper (https://stableunit.org/StableUnit-whitepaper.pdf).
If you try to fool the system, at least do it diligently. If you try to substitute “bitcoin” for TON in someone else’s work, do it everywhere.
Submission 2
Decent economic model. Though I doubt you will have enough time under extreme market conditions to allow borrowers time to top up their accounts with additional collateral. Prices can fall anywhere up to 90% a day or even more. We haven’t yet seen a real black swan event except in March 2020. IMO the system must be antifragile.
Your work also lacks the technical implementation details on Free Ton or at least you could have made use of the systems advantages over other blockchains.
Submission 3
I appreciate your good intentions, but your work needs a lot of improvement.
The purpose of any stable coin in the first place is as a means of payment. I have doubts that many people would want a fiat representing all the world currencies. In particular Venezuelan bolivar with millions % of inflation. I understand your desire to fight the inflation. But you definitely need to improve your knowledge of macroeconomics to understand the current tendency of the world governments to devalue national currencies almost in tandem with each other.
Submission 4
You suggest, I’m citing:
“We propose to set the limiting changes in the purchase and sale prices of TON at the node level.”
How are you planning to fight P2P trading/exchanging? Say, somebody wants to sell Ton Crystal much lower than the current market price for DAI. In what way are you going to spot such a transaction? Do you want to limit all transactions when the TON price falls substantially for the current day? Then you would also limit the buying support, don’t you?
Submission 5
Vitali reviewed the topic only superficially and didn’t disclose the important details such as how the auctions would be done, what are the risky storage facilities of the manufacturer, who is the Referral Giver and the Emerald Protocol Initiative Group. And how Emeralds will be borrowed in case of a substantial drop of the Ton Crystal price in the undercollateralization event.
Submission 6
Good point to offer more matured and stable assets like “bitcoin on Free Ton” and “Ether on Free Ton” as collateral. I suggest that you use only DEXes to sell undercollateralized loans. Centralized exchanges are prone to systemic and legal risks. You could easily get clients funds frozen.
Submission 7
Inconsistencies
“The key is sustaining the value and the price of the StableCoin as stable in the long-run in relation to another cryptocurrency, mitigating effects in supply and demand of it. In this respect, a new StableCoin pegged to the value of Crystal TON (TON) can follow and reflect its value adequately without being affected by differences in demand and supply of this StableCoin by and of itself, eliminating speculation and arbitrage seekers.”
I just don’t get it. What’s the use of creating a stable coin pegged to Free Ton Crystal when the latter is extremely volatile itself?
“2. Economic Model based for a StableCoin Type #1 based on a Seigniorage- Style Cryptocurrency StableCoin”.
TBH, type #1 stablecoin is fully backed by reserves in national (fiat) currency, gold or other precious metals.
“8.2. StableCoin (type #2) backed by cryptocurrency, due to the volatility of such, is essentially “backed” only within certain volatility limits. It is not difficult to calculate mathematically that if this threshold is exceeded, when the rate of the backing cryptocurrency drops dramatically, the backing position must either be liquidated or re-backed, otherwise the StableCoin rate will also begin to change.”
Good point. It’s great you understand the limits of the algorithmic model.
IMO using options is not a good option in a situation when the price of STC plummets to record lows. MMs might just get scared to buy a useless asset when it crosses a point of no return. It’d be much safer when MMs are bound to purchase STC, not just offered a choice in the form of an incentive. Just like the liquidations of CDPs are handled in MakerDAO.
STCO coupons/options might be worth researching, but from a practical point of view, a stablecoin that swings +/- 5% in either side is not good from a practical point of view as a means of payment. If you followed the MakerDAO for quite a while, you should have known how many efforts they spent trying to stabilize the DAI rate within a much lower corridor. Many investors were far from happy when Dai kept trading 1-3% percent higher than the US dollar.
Therefore we are talking more of a volatility damper mechanism, rather than a real stablecoin.
I’ve got an impression the author has a good understanding of macroeconomics and how price discovery is done on an exchange, but IMO he doesn’t quite get how smart contracts are handled and their limitations in particular.
Submission 8
I see little value of making a REIT for the Free Ton community at the current moment. Besides if you follow this route your stablecoin would only be available for institutional or qualified investors for legal reasons such as KYC, AML. From my experience to manage a small hedge fund you need at least 200k for yearly maintenance. I suppose it should be the same for a REIT. You ask for only 1 mln USD during the ICO (I’m not talking about the ICO legal work and implications).
How many years are you planning to run your REIT? I’m also very interested: what kind of property are you going to buy from what’s left? One and a half villa?
You mentioned an optimistic scenario of a constant growth or your REIT value year over year. Experience shows that this is not true. Property like other assets can both grow and fall even for decades.
Submission 9
The work is bloated with unnecessary repeated citations and other information of low importance making it harder to find and evaluate the gist.
I don’t quite get why we need FreeTONBTC in the first place while the current contest is about stable coins originating from the word stable. That is - not changing in value. Isn’t this task already done by Ethereum and PolkaDot bridges?
Inconsistencies.
I don’t always follow your logic. You dive deep into technical implementation without first clearly explaining what comes from what. Like in the governance section you suddenly start talking about the FGT token and fUSD. I read almost 20 pages having no idea why FreeTon needs FreeTONBTC when all of a sudden you switched to CDPs and the real stablecoin concept.
You should have made an abstract to outline the whole idea and motivation of your every move.
Are you planning to use FreeTONBTC as collateral only?
The rest is very much like MakerDAO did with DAI. IMO I don’t like the idea of auctions for liquidations. When/if there are not many keepers you are definitely going to end up like it was on Mach 2020 when some malicious keeper bought ether at zero turning into a class action suit against MakerDAO.
Nevertheless out of respect to the author’s research efforts I appreciate the tech behind PolkaDot that might be implemented on Free Ton.
Submission 10
Appreciate an attempt to eliminate overcollateralization. Only this is a tricky path.
This binary approach assumes to be a closed system when everybody is trading only between the TON and NOT. What if some large player buys out a large quantity of either token over the counter on some P2P exchange for say ETH, DAI or BTC. Then some time later dumps this amount back into the Free Ton ecosystem.
This is as strong as there are sufficient reserves in the stabilization fund as well as how large the staking rewards are. When the Rubicon is crossed the whole thing gets broken.
Moreover if the intrinsic value of Free Ton drops TON and NOT become useless too.
Good technical coverage of oracle feeds and techniques against known attacks.
D’Actions seem to be an interesting alternative to the old model, but not brand new. The Atomica team was doing almost the same on Ethereum this summer for keeper auctions.
Submission 11
Type #1 stablecoin. TBH not exactly in the true spirit of FreeTon, but could still do a favor if it works out and is widely accepted.
Submission 12
“The reserve fund will be forced to return to the LibreCash token holder the full dollar per token because of the rules encoded in the Free TON smart-contract.”
In what form? You can’t just pay USD from a smart contract?
I guess the overall commission model is not stable, though in case you manage to get access to the Givers funds, it’d be like the United States having access to FRS.
Submission 13
From an investor’s point of view I love this concept of a volatility damper. I’ve been closely watching the same idea being developed by the Reflexer team for Ethereum. It’s quite simple for implementation and very stable and anti-fragile at the same time. BTW, the same idea was proposed in the original MakerDao’s purple paper.
I’m almost sure it’d get the community’s traction: both by speculators and investors trying to fix their profits. I would personally use this when it’s ready.