Harmony Protocol-Native Stablecoins

Defi has Real Utility

Defi is undoubtly the most adopted blockchain application with real utility now. Much less hype and speculation and more proven utility compared to other applications. In Harmony, the most utility happens on Defi with hundreds of millions of token participating in Defi applications such as tranquil, curve, sushi. Even Gamefi like DefiKingdom is also part of Defi because it’s a gamified Defi with beautiful graphics.

Part of Harmony’s popularity and success should be attributed to the rise of DefiKingdom, as a gamified Defi application, it’s possible to be built on harmony not only because of the fast transaction speed and low fee, but also the existing defi ecosystems such as DEXes and stablecoins. Imagine without the existing defi ecosystem, Defikingdom won’t possibly consider Harmony as a viable chain to launch their GameFi application.

NFT has potential of mass adoption so we shouldn’t ignore it either. DAO is a form an organization, it’s not an application. Having best DAOs won’t extensively benefit our users, it only benefits the DAO participants, but the fact is not all our community members would like to participate in DAOs. Besides, DAO is very experimental and there is lots of unknown and uncertainty about its true value and applicability in certain areas.

Why Protocol-Native Stablecoin

Stablecoin is a critical component of a strong and thriving Defi ecosystem, our current Defi ecosystem is lacking a strong and liquid stablecoin to support the demand of defi users and applications. I’ve heard from real users that the slippage on our stablecoin pairs is very high and not very usable, which is not a good experience for Defi users and it will hinder the adoption of Harmony ecosystem, including Defi and Gamefi.

Existing stablecoins in Harmony is not well adopted such as OIN. OIN project didn’t take off for many reasons, one of which is that it is a new project without much community trust and support. Building a harmony native stablecoin as one of the official stablecoin on Harmony ecosystem will get the most support from community and thus having more adoption and growth.

Protocol native stablecoin can further take advantage of the billions of ONE staked in Harmony’s proof-of-stake and leverage the staking utility with Defi ecosystem. Tranquil implemented the staking derivative stONE in a centralized way and only got $10m TVL. Compared to the hundreds of millions of ONE staked, the current utility of staking derivative is close to none and there is a huge potential to explore the locked value.

Potential Execution Plan

  1. Market research
  2. Stablecoin design
  3. Launch reader staking precompiled smart contract.
  4. Implement the portal to convert staked ONE to liquid staked ONE.
  5. Implement the algorithmic stablecoin smart contract
  6. Implement the UI to convert between ONE and native stablecoin
  7. Integrating with partner Defi projects such as Aave, curve, tranquil, DFK etc.

Followup Efforts:

  1. Host hackathon for developers to utility harmony stablecoin and staking derivative.
  2. Tutorial videos
  3. Marketing on the benefits to defi users on Harmony