Former BitMEX CEO Arthur Hayes has proposed a new stablecoin called the Satoshi Nakamoto Dollar (NUSD) or NakaDollar that is pegged to Bitcoin and inverse perpetual swaps of BTC against USD. Unlike other USD-backed stablecoins, the proposed NUSD will not rely on any USD reserves but rather on liquid inverse perpetual swaps listed on derivatives exchanges. The stablecoin will be based on a set of short BTC positions and USD inverse perpetual swaps and will maintain its 1:1 peg to USD via mathematical transactions between a new decentralized autonomous organization (DAO), NakaDAO, authorized participants (AP), and derivatives exchanges.
The creation of NakaDollar will not involve any USD movements or the services of banks, making it independent of the US dollar. However, the stablecoin is not completely decentralized, and its potential failure points are centralized crypto derivatives exchanges, according to Hayes.
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The Need for USD-Independent Stablecoins
Regulators have recently increased their scrutiny of stablecoins, leading to a growing interest in USD-independent stablecoins. Binance CEO Changpeng Zhao has suggested that the cryptocurrency industry will likely move towards other fiat currencies, such as the euro, yen, or Singapore dollars, as a base for stablecoins.
Hayes’ Proposal for NakaDollar
Hayes proposed NakaDollar as a stablecoin with a value pegged to the sum of $1 worth of Bitcoin and one inverse perpetual swap of BTC against USD. The stablecoin will not rely on any USD reserves and will be based on a set of short BTC positions and USD inverse perpetual swaps, maintaining its 1:1 peg to USD via mathematical transactions. The proposed stablecoin is planned to be created through a new decentralized autonomous organization (DAO), NakaDAO, authorized participants (AP), and derivatives exchanges.
While the proposed NakaDollar stablecoin is independent of the US dollar, its potential failure points are centralized crypto derivatives exchanges. Therefore, it may not be entirely decentralized. Hayes has excluded decentralized derivative exchanges from the proposal because they are not as liquid as their centralized counterparts.
