Dexy: A Simple Stablecoin Design Based on an Algorithmic Central Bank

Abstract

We consider a new algorithmic stablecoin called Dexy consisting of three components: a central bank, a secondary market in the form of a customized CP-AMM liquidity pool, and a trusted oracle. The price of the stablecoin in the liquidity pool is stabilized, relative to the oracle price, via central bank interventions. Users mint Dexy stablecoins from the bank using basecoins, the base cryptocurrency asset.

arXiv commentPublished in the Journal of Financial Technology (the JFT), Special issue on Stability