We started with the intention to build a project that would enable investors to expose themselves directly to the Celo Reserve. This idea morphed into an interesting take on the idea of value itself. What if we were able to build a stable value asset that was able to maintain its value without being privy to the value pressures of fiat currencies? We decided to experiment with this fairly novel take on the relationship between inflationary and deflationary pressures.
What it does
Our protocol issues a governance token ($PGT) that can be traded on any exchange on the Celo network. This governance token serves to gate access to Pure Token purchases and create an ever-expanding loop of liquidity between the governance asset and the protocol's stable coin itself, as these assets burn themselves and call for the minting of the opposite asset in perpetuity. This allows us to maintain algorithmic stability without needing to balance liabilities against over-collateralized reserve capital. Additionally, we avoid the possibility of the collateral behind our project fractionalizing at any point. Our user facing app allowed for transitions between Pure tokens and Pure Governance tokens on a mobile friendly Progressive dApp.
How we built it
We wrote two Solidity smart contracts for either token that have exchange functionality and spot pricing mechanisms built in. We deployed these contracts on Celo blockchain on the Alfajores Testnet and using the Celo Connect Kit were able to interact with a front end we forked from the Progressive pApp Starter.
Challenges we ran into
At first, we struggled to figure out what method to use to back the value of our asset. We floated ideas of writing up a custodian reserve contract that remains native to our protocol, but we decided the upfront capital requirements would constrain our ability to build. We also thought about proposing our token as a new native stable coin on Celo that would take advantage of the Celo Reserve, but were quickly told that this might be a massive liability to the efficacy of the Celo Reserve. We bounced ideas around with our mentors until we settled on the liquidity loop model we describe above.
Accomplishments that we're proud of
We're really excited to have some contracts to show our exchange mechanism's functionality, and to have been able to work out some of the more esoteric aspects of our pricing math.
What we learned
We learned more about Solidity and the EVM. We also learned how to use Celo's Contract Kit. This was also the first time any of us had used Hardhat for development.
What's next for Pure Stable Token
Eventually, we'd like to refine the way that data is called for and piped into the contract, as well as to force conditions upon our exchange functions to ensure that $PGT is the only asset that can purchase $PTK and $PTK proprietarily burns itself and mints $PGT in the case that $PTK is exchanged for $PGT.
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