Original Thread: Commonwealth
COAST team here. After our initial post on the COSMOS forum here in regards to the stablecoin idea for the COSMOS ecosystem, we have received some feedback which raised our interest in considering building it on Osmosis. Therefore, we decided to also initiate a discussion here on the Osmosis forum as well to check what the Osmosis community think about it.
To start with, COAST is a stablecoin enforcer of crypto and real-world assets (RWA) collateralization. We are proposing to build a 1:1 stablecoin on the Cosmos ecosystem - and that includes L1s connected to Cosmos Hubs.
The stablecoin is generated via effective collateralization of various crypto, and future RWAs. It should be redeemable anytime.
COAST is a fork of MakerDAO and we plan to make changes to the chain configuration (GitHub - makerdao/dss-deploy-scripts). MakerDAO is the best on-chain collateral system and its auction system and peg have performed exactly as wished during the most intense market turmoil. The key differentiator for COAST is it focuses on assets in the Cosmos ecosystem.
COAST consists of
- an on-chain collateral system for coUSD (co representing Cosmos, Collateral and Coast)
- a collateral monitoring system with oracle
- A auction system for fair liquidation
Benefits for COSMOS?
- This will unlock considerable liquidity in COSMOS that can fuel DApps usage. Imagine coUSD going into an NFT Marketplace to buy NFTs or become the liquidity for DeFi DApp trades.
- Secondly, COSMOS will further strengthen its standing as an L1 that is strong in financial assets (replacing Terra) , eg: buy OIL using crypto. If done successfully, the derivative narrative can be built without users crossing into source L1 (say COAST is launched in COSMOS) as derivative assets can move from one chain to another.
- Utility of various L1 tokens $ATOM, $JUNO, $EVMOS etc will increase as they can be locked up to generate coUSD.
- Low debt ceiling (vaults evaluated based on liquidity)
- No collateralization of $COAST. (MakerDAO is proposing this)
- High CR-ratio with low collateralization ceiling.
Our asset types
- Asset type 1: BTC, ETH, USDC, DAI, USDT etc
- Asset type 2: Cosmos tokens $OSMO, $ATOM, $CRO etc
- Asset type 3: LPs of asset types above
Our question to the community.
- Are you interested in COAST
- Is anyone interested in collaborating? We are looking for
- Community manager (Well verse in Maker’s MIP/ecosystem, Cosmos’ CIP/ecosystem)
- 3rd party Collateral Auction tracker builder (Similar to https://daiauctions.com/ and makerburn.com)
- 3rd party Auction Keeper engineers (Traders from market making teams perhaps Cronos?)
1m $COAST token will be generated and function only as a signalling token in the smart contract. $COAST will have governance voting power.
Looking forward to your comments and questions from both the Osmosis team and the community! Open for discussion.
A few questions…the latter ones are perhaps a bit premature. :
How is COAST affiliated with MakerDAO? (Is COAST an ‘arm’ or subsidiary, so to speak, of MakerDAO? Are COAST team members also members of a MakerDAO ‘committee’? Or is the COAST team just using the MakerDAO code? Some more details on the COAST team would be very helpful.
What does the COAST team mean by it being an ‘enforcer’? Coming from the field of public policy, and having worked in the field of policing for nearly a decade now, ‘enforcer’ has a certain connotation that has me curious and a little bit concerned.
- On a similar note, what makes COAST auction system ‘fair’?
How will COAST be different from other native stablecoin options (CMST, IST, SILK, USK)?
- Does COAST plan on starting with a parity stability module like IST or introducing it at the same time like CMST? Or is it model more like DAI 1.0/LUSD?
If COAST plans on launching with its type 1 assets (BTC, ETH, DAI, USDT), how does it plan on managing ‘bridge’ risks? Does it plan on allowing users to use Axelar AND Gravity Bridge BTC, ETH, DAI, USDC, and USDT as collateral to mint to COAST?
- What other risk management features does COAST plan on offering? A ‘reserve pool’? An economic advisory/monitoring committee?
- Out of the four major native stablecoins (CMST, IST, SILK, and USK), IST has taken the most cautious approach (in my opinion), and the only one currently backed only by stablecoins (their ATOM vaults are launching soon). Does COAST plan on taking a similar cautious approach? What plans does it have on user education?
If COAST is built on Osmosis, what role does COAST see Osmosis governance as having when it comes to making decisions on such things as collateral rate, stability fees, liquidation model, risk management, etc?
- Is COAST planning on being a stablecoin that is used across different Cosmos ecosystem chains like CMST, IST, and SILK, or just an Osmosis stablecoin like USK is to Kujira?
- What does ‘building’ on Osmosis look like? OSMO grant funding? A COAST validator on Osmosis? Its own DAO like ION?
As RWA/derivatives were mentioned, how does COAST plan on overcoming the hurdle of oracle price feeds? If I am not mistaken, one the primary reasons Comdex was (and is) unable to launch its commodities derivatives exchange is because the Cosmos ecosystem isn’t yet connected to a oracle network that supports RWA price feeds like ChainLink does.
Thanks for creating the post.
As a starter; can you elaborate on what makes you stand out compared to the current Cosmos-native stables like IST, CMST, USK?
And against bridged ones like USDC and USDT?
Based on what i understand, the concept is similar. The current problem in the Cosmos ecosystem is that there is no major stablecoin that can be utilized on all chains yet ($USK is mainly used on Kujira; $CMST is also the same).
I think if the dev team wants to focus on that point and only accept Cosmos ecosystem tokens as collateral (e.g., $ATOM, $OSMO) or apply weight balancing similar to the index token collateral concept ($IBCX), it will be interesting.
Hi @Leonoor’s Cryptoman , thanks for the question. We all know there are several stablecoin projects in the Cosmos ecosystem, and there is huge potential that has not been realized yet. As an example, of all the stablecoins stated above, there is no stablecoin that fully (or mainly) utilizes tokens from the Cosmos ecosystem.
Let me break it down for you here:
- IST allows $USDT and $USDC deposits, and $ATOM (which we think is the most crucial collateral in the Cosmos ecosystem) will open soon (not yet).
- For both $CMST and $USK, they are accepting more Cosmos ecosystem tokens like $stATOM, which we think is ideal. Frankly speaking, the model is similar to what we offer here, but there is a lack of integration in the Cosmos ecosystem yet.
Our plan is to deploy this initiative within the Cosmos ecosystem, thereby introducing additional utilities for tokens within the ecosystem. Consider the scenario where you have $OSMO and can use it as collateral to generate COUSD. This coUSD can then be utilized to acquire various derivatives on Cronos, or any other Cosmos-built L1. By implementing this approach, coUSD has the potential to serve as a stablecoin across multiple L1 chains through the Inter-Blockchain Communication (IBC) protocol, providing stability and interoperability within the broader Cosmos network.
The first step will be accepting more types of Cosmos ecosystem tokens as collateral, which can also go further toward token utilization on that specific chain.
IST also allows DAI, and I believe the Econ Committee is planning on doing a risk assessment on some other tokens like stATOM and OSMO to make a recommendation to governance on what should be the next collateral asset for IST.
Can you clarify whether there are any plans to have stablecoins back coUSD?
They have mentioned USDC, USDT, DAI.
If the team can provide a seamless bridge to deposit those tokens from other chains to Cosmos, and mint coUSD, i think they still have a good chance. It will depend on their execution.
There are some similar stables projects in here, but there is no clear winner yet.