Stablecoins & Nimiq

#1

Here is a place to post anything related to stablecoins and the Nimiq ecosystem. Ideas, proposals, criticisms. Post everything here!

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#2

Staking, Inflation, APR - if Nimiq can manage to beat the current US money market returns on cash (currently ~%3.75 APR in select banks; %4.50 “rewards” on USDC in the Coinbase wallet, paid weekly) with their in-Wallet staking/“rewards” on holding stablecoins it’s a huge win right there. It would incentivize stablecoin holders to participate in the Nimiq Ecosystem via the Nimiq Wallet.

If they can also benefit, prop up, the NIM token price through that process, that would be a double whammy in my view. It would support those that were early investors, those that still want to invest in NIM and the whole idea of decentralized payments that NIM stood and I believe still stands for today.

  1. Easy payments
  2. Pay everywhere
  3. The best stablecoin APR / interest rate of any major currency
  4. Support NIM token
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#3

First idea is to issue a Nimiq USD stablecoin. Most stablecoins are backed by interest-yielding US government treasuries which can provide an ongoing source of income for the project. Having a Nimiq USD stablecoin also allows a portion of that earned interest to be paid to users of the Nimiq wallet.

It also opens the possibility of an algorithmic version of the stablecoin backed by BTC or NIM. For example, the ability to lock BTC or NIM in the wallet via smart contract, and borrow USD against the locked value, similar to DeFi protocols like Aave. This could provide loans that can be paid back any time, even years later, as the collateral will simply remain locked until the USD has been sent into the smart contract to unlock the funds.

Existing DeFi protocols manage risk algorithmically to maintain a suitable loan-to-value ratio: if the value of collateral goes down too much, some of it will be sold to return the LTV to within acceptable limits, and if the value of collateral goes up, either more USD can be borrowed or some collateral released from the smart contract.

Outside of allowing community members access to fast liquidity, a stablecoin loan also allows them to avoid a taxable event that would occur if they sold the NIM or BTC directly (in some jurisdictions).

Second idea is to build chain/gas abstraction into the wallet so that people can use stablecoins easily whether they are on Ethereum, Tron, Avalanche, or any other chain, while also maintaining gas abstraction. Keeping to Nimiq’s philosophy of ‘it just works’ opens up the world of stablecoins and crypto to a new audience, while hiding the complexity for everyday users. Naturally some of those people will become interested in NIM or BTC which will help grow the ecosystem as a whole.

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#4

Just wanted to share some feedback from a group of friends regarding this thread:

  • Someone pointed out that: - this is NOT financial advice in any sense - in US, all crypto transactions are a taxable event, including BTC to stablecoin in-wallet swaps. The only time that doesn’t apply is defined by IRS as (Taxpayers need to report crypto, other digital asset transactions on their tax return | Internal Revenue Service):

    • Holding digital assets in a wallet or account;
    • Transferring digital assets from one wallet or account they own or control to another wallet or account they own or control; or
    • Purchasing digital assets using U.S. or other real currency, including through electronic platforms.

  • None of folks I talked to will move their stablecoins, cash or buy new stablecoins unless the APR return, liquidity and the wallet ecosystem makes sense. i.e., “I ain’t moving my USDC from Coinbase, when they pay me 4.5% APR ‘rewards’ and provide instant access to and withdrawals of USDC, without locked-in ‘staking’. Unless you want to build the decentralized DeFi stablecoin tech and wait for an authoritarian regime to crack down on the CEXs and DEXs you might limit your adoption incentive to just that use case, because APR matters and liquidity is an assumed given. And then, is your APR higher than cash? If not, then what’s the incentive to adopt yet another stablecoin or use it in a particular wallet.”

  • With stablecoins, the potential of exponential growth of a coin’s price is gone. Suddenly, holding stablecoins is much more real - “real money” - than the speculative tokens. Utility becomes it’s defining attraction - liquidity, security, immutability, inflation protection, is it solvent and eventually anonymity of cash.

  • Before going off on creating a new stablecoin, or creating an ecosystem around 3rd party stablecoins, all of us would like to know from the Team how they define this Utility. Is it just a swap vehicle/volatility-off-ramp for the other coins in the wallet? Is it meant to ever off-ramp to cash/banks?

#5

Nimiq’s latest post about government restrictions on access to funds in Canada and other nations is quite apropos to the conversation about stablecoins. Would love to see how Nimiq fits into this solution.

nicely done post and video:
https://x.com/nimiq/status/1974127663527985258
https://t.co/D9K70uybCo