Proposal to launch DSD/USDC Market

Author: Ravage, Head of intergrations and partnerships at DSD

Dynamic Set Dollar (DSD) is a decentralized self-stabilizing and censorship-resistant stablecoin without any collateral backing. Oracle-driven pricing for voluntary supply elasticity is used without having to trust third-parties. The goal of DSD is to create a truly permissionless, scaleable, stable store of value, that can be used as collateral or to hedge in various decentralized finance platforms.
Currently the price is volatile, we have had multiple expansions and contractions based on the peg of $1.00. DSD in its current state makes it an excellent perpetual asset to be added onto

We believe DSD will bring a large amount of users & volume to the Perp platform and would be a mutually beneficial integration.

How could this look?:

  • DSD bonders short to mitigate any downside while locked in the DAO.

  • Coupon holder longs when under peg to add buying pressure helping push price to peg. Additionally makes coupons more likely to be redeemable.

  • Liquidity Provider hedges out downside IL risk by shorting.

Key Metrics:
Uniswap DSD/USDC Liquidity: $8.5m during contraction $50 & $70 m the last two expansions.
Uniswap DSD/USDC 24hr Volume: $5m
Uniswap DSD/USDC Total volume the last 1.5 months: $525 million
$80 million invested in options (coupons)

I want to prime this by saying I’m not super familiar with DSD.

I think this is an interesting proposal because of DSD’s volatility. Perpetual swaps on DSD may be able to help DSD reach and keep equilibrium at the $1 peg. If DSD functions as intended, then this is easy money. I, for one, will continue to watch how the experiment that is supply elastic stablecoins plays out. But right now it’s hard to see if these coins have any real longer-term survivability.

But I think it’s more important for us to first focus on higher volume coins with high demand that have been around longer. We have many coins that we need to roll out that are taking a higher priority. Coins like Aave, for example.