While working with the team at Brale I learned about all the idle cash sitting around on the balance sheets of different projects. Billions are sitting in treasuries held in USDC, Tether, and other centralized stablecoins.
In talking to these organizations they all like the idea of holding those funds in their own stablecoin where they could earn yield on the underlying fiat, but the problem is they don’t want to become stablecoin companies. Bootstrapping a stablecoin is hard, and not their core mission. They don’t want to put it into defi because of the massive risk associated with it. .
USDC has been great for the crypto ecosystem but it’s a choke point. And because of US regulations it’s also unable to share its yield with users (for now).. So we’re stuck with defi being powered by a very centralized stablecoin. There is another way however, and while the regulatory environment is the way it is it’s an opportunity for a new type of stable to emerge.
A Hydra Dollar.
HydraDollar: Issue Stablecoins and Earn Yield with Seamless Distribution
HydraDollar is a stablecoin backed by a basket of other stable coins. The system allows organizations to issue their own stablecoins and earn secure fiat yield while benefiting from the distribution and liquidity of HydraDollar. This unique approach empowers companies to benefit from fiat yield of stablecoins without the complexities of managing stablecoin distribution.
• Issue Your Own Stablecoin: Organizations create their own branded stablecoins, backed by fiat reserves held in their bank accounts. (Through companies like Brale.xyz)
• Earn Yield: While the fiat backing their stablecoin stays in the bank, it generates yield, allowing organizations to earn returns while maintaining stablecoin liquidity.
• Deposit and Withdraw HydraDollar: By depositing their own bespoke stablecoins into the HydraDollar smart contract, organizations gain access to the liquidity of the HydraDollar system. They can then withdraw HydraDollar for transactions and usage in the broader market.
• Integrate HydraDollar: By integrating HydraDollar into their applications and platforms, organizations automatically participate in distributing a stablecoin with broad liquidity, eliminating the need to manage distribution themselves.
HydraDollar simplifies the process of issuing and using stablecoins, providing organizations with yield generation, liquidity, and an effortless way to integrate stablecoins into their operations without worrying about building or maintaining distribution networks.
There are many unknowns with this approach but the logic is sound. By backing, holding, and integrating HydraDollar into your project you support a more balance defi ecosystem. A simple value proposition that could offer an opportunity to challenge USDC dominance.
This idea has nibbled at my brain ever since working with the amazing team at Brale so I thought I would put it out there to see where the holes are. Please share feedback and if it’s something you’re interested in working on let me know.
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