- Arthur Hayes proposed the creation of NakaDollar (NUSD), a BTC-based stablecoin.
- NUSD is an attempt to eliminate the need for any fiat currency bank when purchasing BTC.
- The crackdown on crypto regulations and liquidation of Silvergate has led to the crypto community looking outside for answers.
Arthur Hayes, the co-founder and previous CEO of the cryptocurrency exchange, BitMex, recently proposed the creation of a Bitcoin-backed stablecoin.
Due to the recent global crackdown on cryptocurrency regulations in the US, the crypto community has begun suggesting many ways in which cryptocurrencies can be favored and used without falling prey to several limitations laced within.
In response to such suggestions, Arthur Hayes, the ex-CEO of BitMex, proposed the creation of a potential Satoshi Nakamoto Dollar, also known as (NUSD) or NakaDollar.
On March 8, the co-founder published a blog post titled “Dust on Crust,” where he expressly explained the creation of the Satoshi Nakamoto dollar. In the blog post, he mentioned that new stablecoins should be backed to $1 worth of BTC and one inverse perpetual swap rather than the popular stablecoins (USDT and USDC), which are pegged to the US dollar.
According to Arthur, the US dollar is a global reserve currency. Hence, the most quoted Bitcoin exchange rate occurs in BTC/USD. He stated that to buy BTC from the seller, and Western banks require the buyer to transfer USD before receiving BTC.
Arthur’s proposal seeks to eliminate the need for Western banks, US dollars, and other fiat currencies to purchase BTC. The NakaDollar is expected to not rely on US dollar reserves but on derivatives exchanges that record liquid inverse perpetual swaps.
“Solving this riddle requires the world’s largest economic systems to pay for goods and collect wages in Bitcoin (BTC),” he said.
Performing a mathematical calculation in the blog post, Arthur stated that if 1 NUSD = $1 of BTC + short 1 BTC/USD Inverse Perpetual Swap.
“As the value of BTC in US Dollar decreases and approaches $0, the value of the swap in Bitcoin terms approaches infinity, the value of BTC will also increase in the same manner should the US dollar decrease”.
The Need for NakaUSD DAO
The former CEO of BitMex suggested that the first step to actualizing the NakaUSD is to build an organization that stands as a crypto-native DAO and as the legacy legal system.
The DAO (Decentralized Autonomous Organization) will be saddled with many tasks, including issuing its governance token, “NAKA,” and maintaining a legacy legal existence for recording all member exchanges. The NAKA tokens would fund a sinking pool and establish an initial supply of NakaDollars.
According to Arthur, the NAKA governance tokens and NUSD should be ERC-20 tokens produced on the Ethereum blockchain.
Citing the recent liquidation of the crypto-friendly bank, Silvergate, former CEO of the crypto exchange, Arthur Hayes, came up with the solution to create a BTC-backed stablecoin rather than the USD or any other fiat currencies.