Markets are clearly not doing well right now.
And that’s a concern over at DeFi platform Balanced, where Scott Smiley warns that the BnUSD peg is under pressure.
In the interests of making one of ICON’s premier DeFi platforms more resilient, Scott has submitted for discussion a governing proposal that would ease the pressure on the peg.
Scott summarizes the proposal on Twitter:
“This proposal allows Balanced to issue bnUSD in exchange for other approved stable assets i.e USDS, IUSDC and IUSDT allowing Arb traders to much more easily stabalize bnUSD. It could also sell these stable assets for bnUSD and burn it. It’s similar to MKRs ‘Peg Stability Module’.”
In essence, the proposal would allow any whitelisted stable asset to be used to mint bnUSD. This would make the stablecoin better able to absorb spikes in demand or supply.
Scott says in the proposal, “This, coupled with the future feature of multi-collateral, will greatly increase the stability and revenue of the protocol.”
The proposal would set the following hard limits to prevent black swan events like the one that struck in January:
- IUSDC: 2M
- USDS: 2M
Scott says the proposal should be easy to develop and could be implemented prior to Balanced’s Java migration, if need be.
On a related note…
What concerns me most about the latest havoc in cryptocurrency markets is that this is happening just as a new, crypto-friendly presidential administration takes over in South Korea.
It doesn’t help that Terra is a South Korean project, drawing more attention to its plight in the local press. I even had to hear about it on the morning news during breakfast, though on the bright side, my soondae gukbap was excellent.
We’ve seen crypto markets go sideways before, so maybe in the long run, the most recent crash will amount to little more than a really good time to buy. And as far as I can tell, the government has yet to signal any change in policy direction.
Still, if things get really bad, you have to wonder how long the government will last before succumbing to pressure to keep the crypto scene as tightly regulated as possible. Let’s hope that doesn’t happen.
