MUSD stablecoin and wrapped LSK

Use your LSK to take out loans of a USD-pegged stablecoin. Transfer your LSK to a sidechain using our asset-wrapping technique and issue new Moracle USD (MUSD) via a collateralized debt position.

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Inspiration

I wanted to accomplish the following:

  • Provide a stablecoin pegged to the U.S. dollar for the Lisk ecosystem.
  • Allow Lisk to be deposited on sidechains and act as as a fiat on-ramp.

What it does

Implements several custom transactions to:

  • Create, issue, and transfer custom tokens.
  • Issue/burn Wrapped Lisk.
  • Create/liquidate CDPs.

What is asset wrapping?

Wrapped Lisk is inspired by Wrapped Bitcoin. There is currently no mechanism for transferring LSK to a sidechain similarly to how there is no mechanism to transfer Bitcoin to an Ethereum ERC-20 contract. Wrapped Lisk provides a transparent and verifiable approach in which:

  1. A user sends Lisk to a wrapping provider for a sidechain who holds it and issues WLSK.
  2. The user receives WLSK on that sidechain.
  3. That WLSK can be exchanged back for LSK at any time.

This requires an authority to hold LSK and issue WLSK, but is a decent solution until cross-chain functionality comes to Lisk.

What's next for MUSD stablecoin and wrapped LSK

There are two things I hope to accomplish in the coming week:

  1. Hooking the CDP liquidation and issuing system up to an actual price oracle.
  2. Adding the ability to pay back loans to the UI.

Over the next few months I want to:

  1. Deploy Wrapped Lisk and MUSD to production.
  2. Improve the UI.
  3. Replace naive CDP logic with more robust logic inspired by Dai.
  4. Add a cross-chain deposit transaction type to make it easy for other sidechain developers to use Wrapped Lisk and MUSD.

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