Hey all,
We've created new stablecoin on Stellar called Pays XDR.
What is XDR?
It's based on Special Drawing Rights concept developed by IMF and used for settlements between central banks.
1 XDR is basically a basket of 5 currencies:
0.58252 USD,
0.38671 EUR,
1.0174 CNY,
11.9 JPY,
0.085946 GBP
Altogether these 5 currencies form resilient instrument, that has lowest volatility among fiat currencies and very good at maintaining value in the short term.
https://www.paysxdr.com/images/PaysXDR.mp4
What is it for?
We believe that XDR is a better bridge currency for international remittances and trading market on Stellar.
While XLM has always been a default choice for these use cases, we found that liquidity on Stellar DEX is still very low after 6 years.
Why aren't there more market makers by now?
I've done some research and talked to different entities, which could be interested in market making. I found that they are concerned about taking position in XLM. With 80% of it still to be distributed they see it as highly susceptible to price manipulation, and very volatile as well, making huge swings from time to time, therefore - risky.
Now we can offer them an inherently low-volatile asset, which they should be comfortable holding in their reserves, because it can always be redeemed back into USD, EUR or any other fiat currency without losing much of it's face value. That in turn allows more corporate players to start market making existing and their own newly-issued assets and that will improve overall trading volumes on Stellar. And having liquid DEX with low spreads is a pre-requisite for using Stellar effectively for money remittances.
How can I use it?
You can just hold it as your cash reserves. You can protect yourself from hyperinflation of weak currencies. Even for strong currencies - if instead of USD you had XDR for the past 10 years, it would have saved you around 1.6%. The way I see it as well - as of today you can't have 100% of your portfolio in XLM or BTC, you still need to pay bills and you can't risk your family money to go down by 50% in a month. But if you have 90% in cash (XDR) and 10% in BTC / XLM or any other your favorite asset. Then you only risk these 10% to go to 0, while it can still give you a good uptake if it increases in value x10 or x100 over the next few years.
Once XDR markets are established - use it to trade against anything that you're trading. It should have lower spreads and better market depth when time comes.
You can accept XDR as a merchant. Again, you don't risk volatility, so it's easier to keep it on your balance sheets and you can always use Paysend to send you fiat for it.
What else?
We've built a simple wallet to start with
It does require users to pass KYC and currently only supports XDR. Allows you to buy XDR with SEPA bank transfer or Mastercard (Still sorting out details with VISA), send to your friends or family for free by phone number. Later we might add other Stellar assets if it becomes a popular choice.
We're going to integrate XDR into other Paysend products too.
Global accounts app allows you to have multiple balances in different currencies and issue physical/virtual card that can be used with any of those funds. Good for travelling and directly competes with guys like Revolut / Wirex.
How it compares to Facebook's libra?
From what we know, libra is going to have similar or exactly the same composition based on 5 major currencies.
But they also looking at creating their own distributed ledger with paid membership for validator nodes (that are going to govern the network in the beginning) and eventual transition to POS.
It will take probably another year until it's production ready and there is no solution available yet how to transition to POS, they are repeating mistakes of Ethereum by leaving these questions unresolved.
We're not trying to invent our own private blockchain, we're using best platform that is available today to make XDR accessible to people around the world (rolling out in Europe first). Well, we don't have 2 bln users to start with, but healthy competition never hurts anyone, right?
You can find more details on our website and more about Paysend here
