Billions of dollars in $USDC and Tether are sitting idly in the coffers of major crypto projects. Right now the only people who are benefiting from yield generated by that parked cash are $USDC and Tether themselves. But issuing a bespoke fiat backed stablecoin is no longer a heavy lift, so you might be left wondering:

Why don't these orgs issue their own stablecoins and earn that sweet sweet fiat yield?

These organizations like the idea of creating their own stablecoin and earning yield on the underlying fiat, but they don’t want to become stablecoin companies. Bootstrapping a stablecoin is hard, and not their core mission.

USDC has been great for the crypto ecosystem but it’s a choke point. And because of US regulations it’s also unable to share its yield with users. So we’re stuck with a system where a few companies earn all the fiat yield on everyones stablecoin balances. But there is another way, enter:

A HydraDollar.

HydraDollar: Issue Stablecoins and Earn Yield with Seamless Distribution

HydraDollar is a stablecoin backed by a basket of bespoke stable coins. The system allows organizations to issue their own stablecoins and earn secure fiat yield while benefiting from the distribution and liquidity of HydraDollar. This unique approach empowers companies to benefit from fiat yield of stablecoins without  the complexities of managing stablecoin distribution.

It also has the added benefit of being issuer agnostic, so many companies can participate in the hydradollar system, diversifying it and strengthening its reserves.

How It Works:

• Issue Your Own Stablecoin: Organizations create their own branded fiat backed stablecoins, backed by fiat reserves held in their bank accounts or short term treasuries. (Through companies like Brale.xyz)

• Earn Yield: While the fiat backing their stablecoin stays in the bank, it generates yield, allowing organizations to earn returns.

• Deposit your stablecoin, Withdraw HydraDollar: Organizations deposit their own bespoke stablecoins into the HydraDollar smart contract then withdrawn Hydradollars to hold or transact with.

• Use HydraDollar: Organizations then integrate HydraDollar into their applications and platforms, adding to the distribution flywheel. Many hands make light work.

Bootstrapping a stablecoin is hard. Hydradollar uses incentives to distribute that load in a legally compliant manner.

Open questions

There are many unknowns with this approach. By backing, holding, and integrating HydraDollar into your project you support a more balance defi ecosystem. A simple value proposition that could offer an opportunity to challenge USDC and Tethers dominance.

Still, there are a few issues that I haven't quite solved.

• How do you avoid the issue $DAI ran into of being backed mostly by USDC? Is there a blacklist of stables that can’t join Hydra? 

• How do you make the protocol decentralized enough to not allow it to be censored? 

This idea has nibbled at my brain ever since working with the amazing team at Brale so I thought I would put it out there to see where the holes are. Please share feedback and if it’s something you’re interested in working on let me know. 

I love you

Billions of dollars in $USDC and Tether are sitting idly in the coffers of major crypto projects. Right now the only people who are benefiting from yield generated by that parked cash are $USDC and Tether themselves. But issuing a bespoke fiat backed stablecoin is no longer a heavy lift, so you might be left wondering:

Why don't these orgs issue their own stablecoins and earn that sweet sweet fiat yield?

These organizations like the idea of creating their own stablecoin and earning yield on the underlying fiat, but they don’t want to become stablecoin companies. Bootstrapping a stablecoin is hard, and not their core mission.

USDC has been great for the crypto ecosystem but it’s a choke point. And because of US regulations it’s also unable to share its yield with users. So we’re stuck with a system where a few companies earn all the fiat yield on everyones stablecoin balances. But there is another way, enter:

A HydraDollar.

HydraDollar: Issue Stablecoins and Earn Yield with Seamless Distribution

HydraDollar is a stablecoin backed by a basket of bespoke stable coins. The system allows organizations to issue their own stablecoins and earn secure fiat yield while benefiting from the distribution and liquidity of HydraDollar. This unique approach empowers companies to benefit from fiat yield of stablecoins without  the complexities of managing stablecoin distribution.

It also has the added benefit of being issuer agnostic, so many companies can participate in the hydradollar system, diversifying it and strengthening its reserves.

How It Works:

• Issue Your Own Stablecoin: Organizations create their own branded fiat backed stablecoins, backed by fiat reserves held in their bank accounts or short term treasuries. (Through companies like Brale.xyz)

• Earn Yield: While the fiat backing their stablecoin stays in the bank, it generates yield, allowing organizations to earn returns.

• Deposit your stablecoin, Withdraw HydraDollar: Organizations deposit their own bespoke stablecoins into the HydraDollar smart contract then withdrawn Hydradollars to hold or transact with.

• Use HydraDollar: Organizations then integrate HydraDollar into their applications and platforms, adding to the distribution flywheel. Many hands make light work.

Bootstrapping a stablecoin is hard. Hydradollar uses incentives to distribute that load in a legally compliant manner.

Open questions

There are many unknowns with this approach. By backing, holding, and integrating HydraDollar into your project you support a more balance defi ecosystem. A simple value proposition that could offer an opportunity to challenge USDC and Tethers dominance.

Still, there are a few issues that I haven't quite solved.

• How do you avoid the issue $DAI ran into of being backed mostly by USDC? Is there a blacklist of stables that can’t join Hydra? 

• How do you make the protocol decentralized enough to not allow it to be censored? 

This idea has nibbled at my brain ever since working with the amazing team at Brale so I thought I would put it out there to see where the holes are. Please share feedback and if it’s something you’re interested in working on let me know. 

I love you