Right after an ICO succeeds its token will be listed and traded with the stable coin NDAO or any ERC20 tokens that are available for trading in NaturalDAO network.
A token's listing and trading are managed and automatically deployed by smart contracts.
Eliminates possible privileges multiple parties have in Centralized Exchange
In a typical centralized exchange a token issuer, the exchange and possible bankers may collude with one another to manipulate the token's price.Our proposal elimiates these parties' privileges and possible collusion, and dismantles human interference in trading.
Rational Model to Issue Stable Coins
NaturalDAO issues stable coins NDAO in one mode and two ways.
Forging NDAO through ETH raised by ICO. Thus, NaturalDAO issues the stable coin NDAO for development of dAPPs (we assume each ICO is initiated for a project/dAPP. After its ICO succeeds that dAPP is considered to be lauched for development). NDAOs are issued based on real application demand.
Any user can forge NDAO through ETH.
First Ever Decentralized Model for Token Pricing with Stable Coin
Trading of a token in Bancor or Uniswap is paired with BNT or ETH. In either case when BNT or ETH's price fluctuates hugely a token paired with it is affected by the price fluctuation as well. For example when a project's development is well on track ideally its token would in general be traded at a stable price in fiat currency. But when the token's trading is paired with BNT or ETH its price in fiat currency might fluctuate as BNT or ETH's price in fiat currency fluctuates. This price volatility would fuel speculation rather than encourage application in business and economy.
Brings Applicable solution to Blockchain Based Applications
The best and most popular application of a stable coin is in retail (e.g. e-business), micro payment and etc. NaturalDAO provides the most critical parts of the payment for the blockchain, that are, stable coin NDAO with absolutely solid price, and deswap network.
Rational Pricing Model
In Bancor the base token is BNT and in Uniswap the base token is ETH. Both BNT and ETH belong to stakeholders or token issuer. In Bancor the real maximum reserve a token issuer can provide is about 5%(Bancor's recommended value) of the total supply. Even with the maximum reserve a token's price volatility is still huge. This volatility is nearly 20 times the volatity which trading with a token's total supply would generate(More details will be added for this later).
In our proposal when a token's ICO succeeds the equivalent amount of the token issued for the ICO will be issued and transferred to the exchange. Those additionally issued tokens and don't belong to any stakeholders or token issuer and cannot be taken out from the exchange without trading. Therefore pricing of a token in the exchange reflects real trading's demand and supply. This pricing model is rational and reasonable
Zero Cost for Token Listing, Token Issuer Loves It.
Our proposal brings great interests to a token issuer by eliminating the aforementioned huge costs and building confidence in both the token project and the token issuer. Token issuers would love this proposal.
Safety of Liquidity
We will add more technical details to our proposal and come up with a method to protect the Liquidity from being hacked ----- the key point is the Liquidity's CPMM value will be a constant value in normal situations. When the Liquidity is hacked its CPMM value will change and leave an evidence. Communities would very likely agree on actions to rollback any loss caused by this hack.
A significant point of our proposal is even in the worst case in which the Liquidity is hacked no one will suffer any loss. In theory, a practicable liquidity may be reconstructed through donations or other means.
Adhering To Blockchain's Core Values
Our proposal is completely decentralized and censorship-resistant.
It might be a mechanism to phase out failed dAPPs.