A decentralized Federal Reserve We are creating

BasisCash and AmpleForth are pioneers of decentralized stablecoins, but they have either completely failed or are mired in stagnation.

What should truly be decentralized is the Federal Reserve, not the US dollar, as the dollar is ultimately just a puppet of the Fed, and even US Treasury bonds and stocks are merely marionettes controlled by the Fed.

We are creating a decentralized Federal Reserve, which has the authority to create corresponding decentralized US dollars, Treasury bonds, and stocks, as well as determine how they operate in a decentralized manner.

By burning the decentralized stablecoin DSD, you can obtain an equivalent amount of dFed. Holding dFed makes you a Federal Reserve shareholder. As a shareholder of the decentralized Federal Reserve, you can vote to determine interest rates (which can be negative), issue additional DSD to buy back a specific token, sell a specific token to recover and destroy DSD, set the specific anchor price for DSD, decide the duration of term deposits, and the number of proposers in later stages.

2. Decentralized Stablecoin Pegged to the US Dollar

The decentralized stablecoin is named DSD (Decentralized States Dollar), and the primary responsibility of the decentralized Federal Reserve is to ensure the price stability of DSD.

The initial total supply of DSD is 4 million, all of which will be sold through a whitelist sale.
After the sale ends, DSD tokens will be distributed proportionally based on the percentage of ETH contributed by each user. There is a hard cap of 1 ETH per whitelisted user.

Of the raised ETH, 70% will be used to add liquidity, while 30% will be allocated for development and promotion. The LP tokens obtained from adding liquidity will be sent to a burn address.

The initial price of DSD will fluctuate, but eventually, it will be pegged to a specific value through the governance of the decentralized Federal Reserve. However, the price of DSD will not be pegged to the US dollar, as the purchasing power of the US dollar has declined more than tenfold in the past 10 years. DSD aims to maintain its purchasing power stability through decentralized governance, remaining resilient against inflation.

3. Decentralized Bonds Pegged to US Treasury Bonds

The core mechanism of US Treasury Bonds is to deposit US dollars and earn interest. Initially, DSD bonds will only offer 30-day fixed-term deposits, with interest rates determined by the decentralized Federal Reserve’s voting. Fixed voting will take place monthly, with plans to introduce longer-term deposits and non-fixed-term deposits in the future.

The interest rates for decentralized bonds are determined solely by the decentralized Federal Reserve. Due to the limited initial scale of DSD, the initial interest rates may fluctuate significantly and are likely to converge with real-world rates in the future.

When collecting interest, 10% will be deducted, with 5% used to periodically add DSD liquidity and the remaining 5% allocated for future development and operational costs.

4. Decentralized Stocks Pegged to US Equities

Anyone can issue tokens based on DSD. As long as a token’s liquidity with DSD accounts for more than 80% of its total liquidity, it will be considered a potential decentralized stock target pegged to DSD.

When the price of DSD is above the pegged price, the decentralized Federal Reserve can, through governance voting, issue additional DSD to purchase high-quality targets in the decentralized US equities market, helping their prices to soar.

When the price of DSD is below the pegged price, the decentralized Federal Reserve can, through governance voting, sell overvalued targets in the decentralized US equities market to recover DSD, with all recovered DSD being destroyed.

Decentralized Governance

dFed, as the governance token, is only issued on the Ethereum mainnet and is governed through snapshot voting.

Initially, to prevent Sybil attacks, proposals are made by the team and voted on by dFed holders through snapshot voting. The proposal process will gradually become decentralized, with the top 5 dFed holders having proposal rights in the later stages, and snapshot voting taking place once a week.

For each issuance of additional DSD, 5% of the DSD will be distributed to all users holding more than 100 dFed and participating in the current round of voting, which can be claimed freely.

For each token sale, 5% of the tokens will be distributed to all users holding more than 100 dFed and participating in the current round of voting, which can be claimed freely.

Negative Interest Rate Adjustment

The DSD contract has a built-in deflationary mechanism. When negative interest rates are decided through dFed governance, the deflationary feature will be activated, and all held DSD will continuously deflate according to the approved negative interest rate.

Single-chain Governance and Cross-chain Issuance

dFed, as the governance token, is only issued on the Ethereum mainnet and uses snapshot voting for governance.

DSD, as a stablecoin, will be issued across multiple chains. Each chain will have its own unique DSD token, identified by a prefix for different public chains, such as zDSD representing DSD on Zksync.

DSD will have a genesis presale and genesis public sale on each new chain, with a 1:1 ratio between presale and public sale quantities. The public sale price will be the seven-day weighted average price of all DSD issued across all chains, while the presale price will be 60% of the public sale price.

Except for the initial zDSD issuance, the genesis presale is exclusive to dFed shareholders, and the allocation for the genesis issuance is based on the snapshot of dFed holdings. The team will receive an additional 5% allocation for continuous operation support. Unsold DSD in the genesis presale will be added to the genesis public sale, and all unsold DSD in the public sale will be destroyed.

Apart from the first zDSD issuance, all funds raised from the genesis issuance on new chains will be used entirely for providing liquidity.

Key links:

Medium: https://medium.com/@DeFederalReserve

Related posts:

Hello to whom may read this, here I am again six weeks into my software engineering boot camp just passed Phase 2 project week and code challenge. I will share a piece of what I love while doing…