So what'll ensure dev can maintain the price at 1$...
theymos explained it in Meta here.
This is totally unrelated to this particular token, which I don't know anything about and only spent 30 seconds skimming, but you could do a stablecoin in a mostly-decentralized way like this:
- Call the stablecoin "SSCN". There's also another token which is part of the same system called "SBND".
- When the price is below $1, the system automatically creates x SBND tokens and sells them for SSCN tokens in an automatic auction process. This destroys SSCN coins, reducing the supply and therefore increasing the price.
- When the price is above $1, the system automatically buys y SBND tokens in return for SSCN tokens in an automatic auction process. This creates SSCN coins, increasing the supply and therefore reducing the price.
(Speculators would buy SBND tokens if they think that SSCN is going to become more popular, and sell them if they think that SSCN is going to become less popular.)
A decentralized system cannot know anything about prices, so some centralized entity needs to provide SSCN's price to the system as an input. This is an unavoidable point of centralization. But everything else, such as determining x and y above and conducting the auctions, could be done automatically.
Interesting, always bumping into the term of "stable coin" but I never really could grasp the clear concept, never have guessed that theymos had a very explanation.
Going back to the thread topic, will this system be able to support, like, a massive dump? Given the token is free, and it (as per this post, no explanation yet) has no feature to encourage people to hold, wouldn't it be very possible and logical that massive dump will occur? Then, would the system be able to overcome it?