Users of the Pegs Cash community:
Since the release of Pegs Cash, TVL has gradually increased and once exceeded 20 million U.S. dollars. The price of PUSD has been stable at around 1 U.S. dollars for a long time. We have iterated multiple versions of our product, and everything is proceeding in an orderly manner. In order to further increase the use of PUSD, we began to try to cooperate with more projects
But as you see, the algorithmic stable currency market is facing huge challenges, and Pegs Cash is facing severe difficulties.
Compared with algorithmic stablecoins, we thought that the collateralized algorithmic stablecoin originally proposed by FRAX is a better economic design, so we released the Fair-launch version of FRAX and optimized it on the token model.
We think that we are doing a great experiment, which will help people break away from centralized stablecoins and avoid excessively intervening in the market by centralized agencies over issuing stablecoins. We have made presuppositions for every possible situation, except for the fragility of human nature. This system should have good anti-risk properties, but when it starts negative feedback, the PEGS generated by Redeem aggravates the selling pressure in the market, and at the same time panic makes PEGS/PUSD LP holders remove, that is why PEGS price drop.
Questions from community
a. Does the team issue additional PEGS to dump to the market?
There are currently 2.72 million PEGS, which far exceeds the original mining output. At the set mining output rate, the daily market increased by 32,876, with a cumulative total of 394,000 in 12 days. Part of the PEGS exceeding it comes from the semi-mortgage stable currency design of the Frax Model:
When Mint, if the CR value is not 100%, some PEGS needs to be invested, and this part will be burned.
On the contrary, when Redeem, if the CR ratio is not 100%, PEGS will be generated.
The current problem is that when negative feedback occurs, the price of PEGS cannot be supported, so Redeem will produce a large number of PEGS because of the fall of PEG’s price.
b. Is it because the team sells PEGS that results in the PEGS’ price collapses?
The address of the team was disclosed to the community at the time of creation. The token information for the allocation controlled by the team is explained as follows:
Subsequent mining allocation (lock-up contract, there is a 48-hour time lock)
0x8eaa94211e241de341528aecb95b6ba1e0b994ab
Team allocation (lock-up)
0x5b46ca123648cc0fba131051a46fd1b5b736a961
Mining Tax
0x4dCAf448f382e3Ce279092BB4dD42C20FABaf9c6
c. Why is there a difference between the PEGS price and Uniswap real-time price in Redeem?
Because of the problem of the depth of Uniswap’s liquidity, we have adopted the Twap price as the input of the oracle, mainly to prevent hackers from manipulating the token price for Redeem arbitrage. What is currently happening is that the token price has fallen too fast, causing the Twap price to fail to keep up with the change.
We will not give up the original intention of releasing PEGS. Next, our development will focus on three aspects:
a. To further increase the application of PUSD to empower Pegs Cash.
b. To improve the DAO, increase the power of the community, and discuss the form of improvement with the community. We have made a preliminary attempt yesterday and launched the first proposal of [PIP#1]. Users can vote to choose whether to hold PEGS to continue to receive dividends in the future or to use the fee to buy back PEGS. We will further discuss the model of decentralized collateral algorithmic stablecoin with the community and find the future development direction of PEGS.
c. PEGS Cash V2 Launching
Thank you very much for your support, and we will continue to move forward.
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Website: Pegs.cash
Twitter: https://twitter.com/pegscash
Telegram: https://t.me/pegscash
Medium: https://medium.com/@pegscash
