This topic is to discuss the proposal submitted by @charlie .Please see below for the details of the proposal and discussion.
17th Oct ,2024
Current status: Under Consideration.
Opened for community discussion on 17th Oct, 2024.
This topic is to discuss the proposal submitted by @charlie .Please see below for the details of the proposal and discussion.
17th Oct ,2024
Current status: Under Consideration.
Opened for community discussion on 17th Oct, 2024.
The zkUSD project aims to explore the feasibility of developing a private, algorithmic stablecoin on the Mina Protocol. By drawing inspiration from MakerDAO’s DAI and utilizing Mina’s zero-knowledge proofs, zkUSD intends to offer a stable, private medium of exchange within the Mina ecosystem. This initial research grant focuses on validating critical assumptions and laying the groundwork for the full development of zkUSD.
The Mina ecosystem currently lacks a native stablecoin, which is essential for DeFi applications such as lending platforms, DEXs, and synthetic assets. The absence of a stable, private medium of exchange hampers innovation and adoption, putting Mina at a competitive disadvantage compared to other blockchain networks that offer comprehensive DeFi solutions.
This research grant proposes a focused feasibility study over 1.5 months to validate key assumptions critical to developing zkUSD:
Minting/Burning Logic Management: Investigate the ability to manage the supply of zkUSD through Collateralized Debt Positions (CDPs) via an orchestrator contract based on user actions.
Computational Feasibility: Assess whether all necessary calculations and assertions (e.g., health factors, liquidation conditions) can be performed within o1js smart contract constraints to provide a full end-to-end stablecoin solution.
Optimal Architecture Analysis: Determine the best architecture for building zkUSD (L1 zkApp vs. L2 App-Chain), including trade-offs related to scalability, security, and decentralization.
Staking Mechanism Exploration: Research the feasibility of staking locked MINA on behalf of users to provide staking rewards, enhancing the stablecoin’s value proposition.
Proof of Concept Development: Integrate the above components to create a local minimal viable product (MVP) demonstrating the core functionality of zkUSD.
Validating these assumptions will pave the way for developing zkUSD, filling a critical gap in the Mina ecosystem. A successful feasibility study will:
Link to diagram: https://hackmd.io/_uploads/BkIDV1P11e.png
zkUSD will consist of several key components that work together to provide the functionality required for a private, algorithmic stablecoin.
The successful completion of this feasibility study will lay the foundation for developing zkUSD as a cornerstone of the Mina DeFi ecosystem. By validating critical components, we aim to proceed confidently toward building a full-fledged, private stablecoin.
Price Feed Investigation: Research and explore the best approach for implementing a reliable price feed for zkUSD. We will investigate whether there are existing decentralized oracle solutions within the Mina ecosystem that can be integrated into zkUSD, or if we need to develop our own price feed system. This research will also evaluate the trade-offs between these solutions in terms of security, decentralization, and scalability.
Data Availability and Synchronization: Explore the data availability and synchronization challenges inherent to maintaining a shared Merkle Tree Map for zkUSD. This stretch goal will involve researching the various options available with our chosen architecture.
2 Months
50,000 MINA
B62qnfDpwYS9u2uEcgdfcuWRqB5MmPQSeNdrVXMWF6cJXipzcGaMejM
Education:
Self taught programmer, professional history as Scrum Master/Agile coach in large financial institutions
Experience:
Spent the last 3 years building full stack web3 projects including:
Nanobyte - browser wallet / payment processor for Nano
Notifly - AI powered personalised newsfeeds for crypto projects
Omnipus - LayerZero multi-chain defi memecoin project
Relevant Projects:
Chainmail - A ZK Email marketplace
Foundry-Stablecoin - A working implementation of DAI in Solidity
Achievements
ETHDam 2024 (Finalist) - BlockLock - on-chain password manager
ETH Berlin (Runner up) Chainmail - as above
Team member:
Education:
Currently doing a masters degree in computer science (artificial intelligence) @ KU Leuven
Work experience:
Achievements:
Circuit Size Limitations
Account Update Constraints
Ordering of Liquidations and Withdrawals
Application Security
There are no money markets to protect the peg risk of the algo stablecoin on Mina. Can you explain in more detail how you will take precautions against such risks?
As there are no money markets on Mina, the traditional risk of depegging does not apply, as there is no market where the price of zkUSD could diverge from its intended peg. Without trading, there is no price discovery, and the value of zkUSD would remain static.
However, this also means that zkUSD would be effectively useless in its current state, as it wouldn’t serve its purpose as a medium of exchange or a store of value. The Mina smart contract ecosystem is still in its early stages, and while a DEX is in development, its DeFi capabilities are currently very limited.
Given that this space is entirely greenfield, there is an opportunity for protocols like zkUSD to evolve alongside other DeFi components in a symbiotic way. I believe this is the ideal time to explore zkUSD, with the understanding that there would be no mainnet deployment until certain crucial prerequisites are in place—one of the most important being a market or platform where zkUSD can be traded.