Came up with an algorithmic stablecoin design in my booster shot-induced fever dream. Sounds pretty great to me: 🤡
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There are two assets, DUH and DUSD, and no reserves. A central mechanism monitors the market price of DUH and allows minting/redeeming 1 DUSD in exchange for 1/P(DUH) units of DUH.
By no-arbitrage, P(DUSD) = 1/P(DUH) * P(DUH) = 1.
What do you think?? 🙃