Quote from: relaystablecoin on September 13, 2018, 01:51:44 AM

Quote from: TeamMobius on September 13, 2018, 01:23:59 AM

Is this going to be a completely new blockchain or is it based on Ethereum smart contracts? Sounds great either way, I'm just worried about the value and liquidity of XRL in the very beginning. What are your worst case scenarios? What happens if the whole system becomes undercollateralized from a rapid fall in price? Where do you get your price feeds?

Though not organized in one section to address all these questions together, the relevant information is all contained in the white paper. For discussion and ease of reading, summarized responses are as follows:

New blockchain vs smart contracts on Ethereum:
The Relay stablecoin system operates on an separate blockchain based on Ethereum. Ethereum was selected as the progenitor technology for Relay due to its long history of successful functioning with smart contracts, which are required for the collateralization system.

Worst case value / liquidity scenarios:
Although talking about token price and appreciation potential is generally bad form, it is relevant to this particular question. At Ethereum's current price of ~$200 (actually less as of this writing), the total capitalization of all XRL tokens to ever be circulated is roughly $500,000. We believe that this valuation provides significant price support to the downside and significant upside potential with any amount of adoption or usage. From a funding perspective, this sum is sufficient to provide project runway in liquidated ETH until team allocations or Ecosystem Development Fund capital should be of sufficient value to maintain the team.

Undercollateralization:
The initial collateralization ratio of 200% is set to minimize the risk of an undercollateralization event in case of a market crash. When the value of XRD drops below the dollar peg due to undercollateralization or market perception of a risk thereof, XRD holders are incentivized to decrease the XRL supply by redeeming their XRD for XRL, with the redeemed XRD burned and removed from circulation. This creates a group insurance feature
through proportional redemptions that eliminates the risk of a self-reinforcing 'run on the bank' panic scenario.

Price feeds:
When available, Chainlink oracles (or the first fully functional decentralized Ethereum oracles) will be utilized to report accurate XRL and XRD prices. Until that time, a native Relay DAO oracle acquiring prices from exchange APIs as is the sole source of XRD and XRL price information into the Relay stablecoin system. Other price reporting mechanisms do exist, such as staked bids submitted by collateral holders, but they have a substantial barrier to entry due to their complexity and are unsuitable at this time for a currency focused on simplicity of use and mass adoption.

Great stuff, I hope your project is recognized! We definitely need more decentralized stable assets!