This mission request is designed to grow liquidity of non-USD and non-EURO fiat-pegged stablecoins on OP Mainnet. It is intended for projects looking to either a) grow liquidity of this type of stablecoin or b) develop and launch this type of stablecoin.
Should this Mission be fulfilled by one or multiple applicants: Multiple (although a qualified proposal may take the entire grant)
How will this Mission Request help accomplish the above Intent?
Many real-world application developers in countries outside of the US or Europe are missing a key piece of infrastructure: a local stablecoin. Ticketing apps, payments apps, etc. have a local stablecoin as a prerequisite in multiple cases. This mission request at improving the state of minority stablecoins and to solve this big bottleneck of real world applications.
What is required to execute this Mission Request?
The projects must include either liquidity, usage, or development incentives for a fiat-pegged stablecoins (i.e. Mexican Pesos, Thai Baht, South African Rand).
How should governance participants measure impact upon completion of this Mission?
Milestones: Milestones should include the deployment of or usage/tvl of qualifying stablecoins on OP Mainnet.
Metrics: TVL of targeted stablecoin.
Impact: Transfer volume, usage activity, and liquidity of stablecoin.
Has anyone other than the proposer contributed to this Mission Request? Nope, just me.
One question, is the liquidity growth initiative also applicable to exchanges or custodial services, or is it exclusively focused on protocols? One might imagine that such companies would develop incentive mechanisms integrated into their products.
I definitely agree we should target EUR (and USD) with much more grant power and that having the deepest liquidity and lowest slippage on these presents a massive opportunity.
I personally think that there is a lot of potential to bringing long-tail currencies onchain via stablecoins. For example just 5 currencies; BDT, PHP, ETB, VND, and EGP, unlocks potential for more than 600million people.
I’d much rather see grant money go towards this underdeveloped space than fighting 5 other L2s to deploy the 10th LRT onto Optimism.
That said, it is an underdeveloped market and I agree that this should be thought of as an experiment. There was just a tiny amount of grants budget left over for this season and I thought this could be a worthwhile exploration.
It would be great if those carrying out this proposal could also share what findings they had in terms of adoption and usage within those markets and which type of products they prefer. I know that Vietnam and the Philipinnes do have a lot of crypto adopters per reports from Messari, but I understand most of it was for gaming which we don’t have a lot of.
While of course these currencies represent 600 million people, you could make an argument that if we switched everything to Spanish in Optimism then we could have all of Latam + Spain be in the Collective which doesn’t mean this is attractive to them.
Also curious in these countries are interested in keeping their funds in BDT, PHP etc rather than exchanging it for USDC.
GM @Michael, I love the direction of this MR. However, the available MR budget and limitations of OP received through grants make it hard to create a longer-term project around this MR. A pilot could work, but the milestones would have to be a bit flexible to facilitate this.
Mento, a Celo spin-out, has created an open-source technology stack and ecosystem of local stablecoins, including PUSO (Philippines), cKES (Kenya), cREAL (Brazil), and more!
With Celo joining the Superchain and Interop on the horizon for next year, I see a lot of potential for non-USD stables to thrive across OP Chains.
For an initial pilot, and assuming the token should live on Optimism - what do you feel should be the priority: A. Integrating the local stablecoins into programs/products on Optimism or B. driving TVL/trades of non-USD stablecoins on Optimism?
This is a tiny ask geared toward easily one of the largest, most pivotal usecases in crypto
actually mystified that this is of all MRs is the one getting pushback on
there are entire chains getting dominant solely because of the presence/use of one local stablecoin that people are onboarding to avoid currency debasement
GC can evaluate the merits of any individual app but this is such an obvious one to support
There has been a lot of discussion on this topic which I love to see. A few points:
This is 0.25%, or 1/400th of this intent’s budget, and 0.08% of this season’s budget.
Over the last cycle I’ve seen a dramatic drop in the number of high-quality of applications and I think other grants council members may share that sentiment, this opens up a broad new area for teams that were thinking about launching something to consider doing it on Optimism.
I agree that other areas take “priority” and I think the budget size reflects this
Many stablecoins haven’t worked to date, but many of these were launched in 2022 before EIP4844 and facing a bear market immediately after. It is definitely a difficult problem but one that has massive potential
As far as holding USD vs the local currency… the vast majority of economies have all of their transactions happening their own local currency. There are only a handful (Venezuela) where transactions regularly happen in USD. If we believe that Ethereum is more useful than just yield farming in defi protocols, I think the on-chain economy should represent the world economy which includes may different markets in many currencies.
Very few people are focusing on this area and the ones that have (Celo) are now starting to see signs of traction. If anything this is a GOOD thing because we are spending on a completely new area to “grow the pie” instead of dropping funds on the same mercenary yield farmers that hop from chain to chain based on the most recent incentives program.
Saying that we need to focus on USD/EURO before these other areas seems a bit western-centric. USA/Eurozone economies already have the best financial infrastructure in the world and at the same time are some of the most regulated. Many times adoption happens most rapidly along the edges. Why would we need to do one before the other? Lets focus on both.
All that said I appreciate the discussion. I agree that the biggest hurdle to this is finding decent projects that are willing to deploy, but I don’t think that means we shouldn’t try.
Edit: Many of these stablecoins on Celo were only recently launched, and the volume is trending up on all of them
The following reflects the views of L2BEAT’s governance team, composed of @kaereste and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’re voting in support of this Mission Request.
In our opinion local stablecoins could work as an enabler for a many crypto use cases in local economies, we see it first hand in non-EUR EU and from our discussions with builders it seems this could be the case in other parts of the world as well.
Our only concern with this MR is the very small amount allocated to it, but even with that in mind we think it makes sense to give it a try and start a discussion around this topic that may continue with a larger program in the future seasons.
We believe that enabling each country to easily conduct transactions using their own reserve currencies would greatly benefit the ecosystem. For this reason, we support the proposal.
Thank you for shining a spotlight in this issue and giving a platform to builders in up-and-coming economies, in my case Mexico. We are building $XOC a stablecoin pegged to the MXN peso that is over-collateralized with ETH and yield-bearing assets such as stakedETH (also coinbase ETH).
This project was deployed during ETHGlobal MX hackathon in 2022 and since then we’ve been growing organically through the Mexican web3 community. Our contracts are deployed in Base, Optimism, Arbitrum, Polygon, BSC and ETH mainnet, but our focus is to make Base the base liquidity (pun intended). You can visit https://xocolatl.finance to interact with our live contracts and I would welcome any feedback on the idea and the UI or the code.
What would be the best way to apply for a grant that aligns with this Mission Request?
Thanks in advance and best regards!
Ivan Flores Hurtado
Hey @Gonna.eth
Thanks for the heads up, it is getting close to the deadline indeed. I just submitted a thoughtful application for grant for us on charmverse.
I’m attaching the application’s link to increase visibility and hopefully it is reviewed before the deadline so there is enough time to answer any questions, concerns and suggestions to it as we are ready to collaborate fully in the Optimism Collective and look forward to it.
I personally can vouch for the team behind the project, they are committed builders to the ecosystem, there is an existent need for this solution all across Mexico and the team already has a small audience but full of power users
