With the upcoming hardfork will come smart contracts on Mina mainnet, which will enable custom tokens, zkApps, L2s and app chains to be built on Mina. It is fair to say that everyone wants to see a thriving ecosystem enabled by the hardfork, similar to the other major L1s such as Ethereum, Solana and Avalanche etc.
One fundamental pillar supporting the success of these L1s (and L2s) is stable coins. They are at the heart of DeFi, gaming and almost every utility on a blockchain. It is thus of paramount importance to get the conversation on a native stable coin on Mina started. IMHO this is particularly relevant to the upcoming flagship DEX on Mina, LuminaDEX, who are targeting enterprise customers.
According to Teddy of MF, ‘The range of solutions can go from basic custom token on the L1 to high throughput stable-coin focused app-chains.’ [link]
IMO, a safer option is to use custom token, with an established player (such as USDC or USDT) to issue on Mina. This would need some (probably hefty) business development efforts from the O1 and MF teams.
Algo stable coins - there has been a thread from O1’s own Joseandro Luiz here. Though given the recent implosion of Luna and others (e.g. Ohm and related copycats), this route seems more treacherous than others.
There’s one project called USDM which is in the Navigator program. Repo here.
also Cross-Chain Transfer Protocol as mentioned by Jonathan above is a viable first step option.
@Circle has a plan to launch native stablecoins on each chain.
Thanks for kicking off this discussion @lamps. I suggest before this discussion progresses to the topic of specific solutions, we first outline the needs. What requirements are their of a native stable-coin on Mina?
I think there are at least four L1-specific features (note these features are covered by the fungible token standard draft here):
- Peer-to-peer transactions of stable-coins
- Deposit (user-to-zkApp) stable-coins into zkApps
- Withdraw (zkApp-to-user) stable-coins from zkApps
- zkApp-to-zkApp transfers of stable-coins
To expand on my personal comment on the range of solutions, L1-specific features, as mentioned above are only the first set of requirements seeking to replicate the features seen on other ecosystems. However, in this ecosystem developers can build far more comprehensive applications that can satisfy specific use-cases that map to real-world requirements. I personally think that it would be invaluable to capture these requirements in this forum.
An open working group that shares context on these real-world requirements and presents on them, synchronously or asynchronously, would greatly benefit the progression of this topic.
What are some specific real-world use-cases that a native stable-coin in the Mina ecosystem can address?
Thanks Teddy! ‘in this ecosystem developers can build far more comprehensive applications that can satisfy specific use-cases that map to real-world requirements’, for the benefit of not-so-technical community members like myself, can you give some examples of these ‘far more comprehensive applications’ - e.g. using some zkIgnite projects as examples, and maybe invite them here for discussions please?
Example zkIgnite project: Protokit
Developers can build a Protokit app-chain that allow fee-less (for end-user) peer-to-peer KYC-AML transactions of Mina ecosystem native stable-coins; extendable with new features. Functionality happens off of the L1 and so utilisation of L1 blockspace is simply just updating the state hash. The underlying system complexity does not manifest in the end-user experience (e.g. no gas fees, no congestion) unlike other ecosystems where the mental model an end-user must have does not map directly onto their current experiences.
Right, thanks Teddy. So perhaps the time comes to invite Protokit guys and other builders to comment?
Great, thanks, and perhaps the LuminaDEX guys too?
Great discussions around stablecoins on Mina. I think that stablecoins are indeed essential for myriads of blockchain applications. Given Mina’s zkApps and focus on serving “regulated DeFi use cases”, a stablecoin on the Mina Protocol would be a great chance to increase attractiveness of the protocol. This holds both for a native stablecoin as well as a custom token as @lamps described, such as USDC or USDT.
Last year etonec published a feasibility study together with MF, University of Luxembourg as well as German bank Hauck Aufhäuser Lampe on how privacy-preserving yet compliant stablecoin payments can be enabled via the Mina Protocol: https://www.etonec.com/post/how-to-design-a-compliant-privacy-preserving-fiat-stablecoin-via-zero-knowledge-proofs. Feel free to check it out.
Native USDC or other regulated stablecoins with primary-market on/off-ramps and a MINA-collateralized CDP-type stablecoin are two great options that support different user-bases.
Thanks for your reply Evan @ehkereiakes , great to hear from you. Would you be able to divulge a bit on how Lumina is planning to introduce liquid stable coins please?
Native USDC is probably a discussion that needs to occur between the Mina Foundation and Circle Internet Financial. CDP stablecoins or other stablecoins can be introduced by their respective issuers, and could potentially receive liquidity incentives through community governance.