Exeum Stablecoins Through Controlled Swaps and Statistical Arbitrage
Summary
The document presents Exeum, a proposed decentralized platform for issuing digital tokens pegged to real-world assets. Its pegged tokens are backed by virtual assets traded through a system where users can take long or short positions using a base token. The platform aims to maintain the peg by controlling asset swap rates, with arbitrageurs expected to trade when a peg breaks. It also describes distributing statistical arbitrage software to decentralize this market-making role.
A further component acts like a central bank for the base token: it sets a long-term interest rate and can pay deposit interest through supply inflation. The proposal aims to avoid stability fees on pegged tokens and discusses potential uses in DApp token models, gas fees, index pegs, and cross-chain transfers. These are design claims and intended applications; the document provides no empirical peg-stability results, implementation evidence, or risk analysis for the arbitrage and monetary mechanisms.
Key ideas
- Exeum proposes tokens pegged to real-world assets and backed by positions in virtual assets.
- Swap-rate control is intended to help restore a peg by creating incentives for arbitrage.
- The platform proposes statistical arbitrage software to distribute market-making activity.
- A central-bank-like component sets the base token's long-term interest rate and may inflate supply to pay interest.
- The document describes intended applications but provides no empirical evidence of peg stability.
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Full text
# Exeum: A Decentralized Financial Platform for Price-Stable Cryptocurrencies # Exeum: A Decentralized Financial Platform for Price-Stable Cryptocurrencies Price stability has often been cited as a key reason that cryptocurrencies have not gained widespread adoption as a medium of exchange and continue to prove incapable of powering the economy of decentralized applications (DApps) efficiently. Exeum proposes a novel method to provide price stable digital tokens whose values are pegged to real world assets, serving as a bridge between the real world and the decentralized economy. Pegged tokens issued by Exeum - for example, USDE refers to a stable token issued by the system whose value is pegged to USD - are backed by virtual assets in a virtual asset exchange where users can deposit the base token of the system and take long or short positions. Guaranteeing the stability of the pegged tokens boils down to the problem of maintaining the peg of the virtual assets to real world assets, and the main mechanism used by Exeum is controlling the swap rate of assets. If the swap rate is fully controlled by the system, arbitrageurs can be incentivized enough to restore a broken peg; Exeum distributes statistical arbitrage trading software to decentralize this type of market making activity. The last major component of the system is a central bank equivalent that determines the long term interest rate of the base token, pays interest on the deposit by inflating the supply if necessary, and removes the need for stability fees on pegged tokens, improving their usability. To the best of our knowledge, Exeum is the first to propose a truly decentralized method for developing a stablecoin that enables 1:1 value conversion between the base token and pegged assets, completely removing the mismatch between supply and demand. In this paper, we will also discuss its applications, such as improving staking based DApp token models, price stable gas fees, pegging to an index of DApp tokens, and performing cross-chain asset transfer of legacy crypto assets.
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