GIP: X
Title: Stable Price mechanism for G$
Author: Letecia Trinity
Status: Stage 1
Track: Protocol
Created: 2024-05-08
Description:
This proposal aims to implements mechanism that will keep the stable price of the Good Dollar token at a target value, example: $0.00017. Maintain the stable price of G Dollar token it’s important to ensure the long-time value of UBI receiving by Good Dollar users, which is in line with Good Dollar’s main object of providing a predictable and reliable source of income to those who need.
Good Dollar’s whitepaper sets out the project goal of providing free money as a public good. and providing Universal Basic Income (UBI) to all active users. The change in the price of G$ may affect the amount of UBI received by Good Dollar members. A drop in the price of G$ can hurt their UBI value, and they may have a hard time using G$ for necessities.
Putting a stable price system will give an easier and more reliable source of income for members, which will support Good Dollar core goal of providing access to financial services and improving people’s lives by giving them access to digital assets and services.
Additional Whitepaper Connections:
Financial Inclusion: One might mention Good Dollar’s primary goal of achieving financial inclusion for 1.7 billion without banks and 5.5 billion underbanked people worldwide. [1]
Economic Empowerment: Good Dollar’s goal of providing economic empowerment by giving UBI can be mentioned.
Community Development: One may mention Good Dollar’s goal of building a strong and active community to supports G$.
Solutions
One possible solution is to use a peg mechanism. A peg mechanism is a system that links the price of one asset to the price of another. In the case of G$, it can be pegged to a stablecoin like USDT or CUSD.
Fixing a currency value to another currency can be done by the following:
Automated Market Maker (AMM): Using an AMM can help stabilize the price of G$ by buying and selling G$ in the market to maintain the target price.
Reserve Funds: Establishing a reserve fund consisting of stablecoins can be used to help stabilize the price of G$ by buying G$ when its price goes down.
Governance Token: The use of Good (governance token) to incentivize members to stake G$ and help stabilize its price.
Implementation Steps:
Study and Analysis: Will conduct a thorough study and analysis of the different peg mechanisms and their effects on the G$ token.
Selection of Mechanism: Select a peg mechanism suitable for the GoodDollar ecosystem.
Smart Contract Development: Develop a smart contract that will implement the selected peg mechanism.
Test: Will perform a thorough smart contract penetration into a test-net before deploying it to the main-net.
Deployment: Deploy smart contract to main-net and start implementing stable price mechanism.
Potential Effects:
More Stable G$ Price: which will provide a more predictable and reliable source of revenue for Good Dollar members.
Stronger Ecosystem: A more stable G$ price could help boost the GoodDollar ecosystem by attracting more users and developers.
Wider Use of G$ may induce wider use of G$ in transactions and purchases of goods and services.
Limitations:
- Community Discussion: This proposal will be shared with the GoodDollar community for discussion and feedback.
- Fix: Proposal will be adjusted based on feedback from the community.
- Voting: The proposal will be subject to a Good DAO approval vote.
- Implementation: If the proposal is approved, the stable price mechanism will be implemented.
Conclusion:
Implementing a stable price mechanism for the G$ token is an important step to ensure the long-term value of UBI received by Good Dollar members. This proposal aims to implement a mechanism that will keep the stable price of G$ at a target value, providing a more predictable and reliable source of income for members. Implementing this proposal could help strength the Good Dollar ecosystem and spur wider use of G$.