Show HN: Unum – a cryptocurrency worth $1 | Hacker News Reader

Show HN: Unum – a cryptocurrency worth $1

unum.one

9 pointsimpostervt13 comments

I've long felt that a price-stable cryptocurrency is vital to increased acceptance of cryptocurrency by businesses and the public at large. There are a few solutions to this problem out there, but, in my opinion, they are either too centralized (and require too much trust) or they're too complicated. I wanted something simple, distributed, and trustless, so I made Unum.

https://unum.one

Unum is implemented as an ERC20 token smart contract on the Ethereum Blockchain. If you send in $20 worth of Ether, you get 20 Unum. If you send in $100 worth of OMG, you get 100 Unum. Whatever you send in is held in reserve by the smart contract. I can't touch it, and you can exchange your Unum into any currency held in the reserve whenever you'd like. Both buying and selling Unum incurs a 0.05% fee, which I plan to use to pay for the Ether needed to maintain the USD price oracle contract that's used to maintain the dollar peg. For every $100 you send, $0.05 is held as a fee.

Right now Unum is deployed on the Ethereum Ropsten testnet. I'd love feedback on the contract itself, which is on Github, and on the website. You can buy and sell Unum on the Ropsten network today if you have MetaMask through the Unum website. Buying and selling is done directly on the blockchain, there is no backend to the unum website itself. If you'd prefer, you can also use Mist to interact with the Contract directly.

I plan to move to the main Ethereum network soon, baring any major bugs being found.

If you're interested more in my thinking behind Unum, you can read the blog post, below, or just ask any questions here.

https://github.com/UnumOne/unum

https://medium.com/unum/from-many-unum-8c8493a8db9d

Price stability is a requisite for a currency that you intend to actually use as money, but in this case it seems you have to buy some other crypto token first in order to buy yours. That just adds to the transaction cost.

It maintains it's price stability by using other cryptocurrencies as a surrogate to the USD.

But you still have no way to buy unum directly with dollars, is that right? It’s not useful unless you already have some other crypto coin.

Do you have to trust that the exchanges are telling your price oracle correct averages? Is this a source of trust leakage?

In a sense, yes - if all the exchanges are manipulated, Unum is screwed.

The price being sent to the oracle is an average, so manipulating just one wouldn't have that much of an effect.

How can you ensure a $1 price if the price of Ethereum goes down and the reserve is less than the amount of Unum?

first, it’s backed by a number of other cryptocurrencies, so that mitigates the risk of any one reserve currency tanking somewhat. Second, in the event that the reserve is worth less than the number of Unum issued, a reserve deficit sell penalty is applied to any sales. The penalty is 1/10th of the deficit percent. So if the reserve was worth $900k, but 1mil Unum we’re in circulation, there would be a deficit of 10%, and any sales would incur a 1% sale penalty. This is meant to encourage would-be sellers to either wait, or sell elsewhere.

If you want to maintain dollar parity, wouldn’t it be easier to use Treasury bonds? Dollar parity would be garaunteed by definition.

Cryptocoins are strongly correlated, if one of the big ones goes down there is a high chance that most of them are going down.

The penalty will not protect the coin from a "bank run". The user must choose between getting the money now with a 1% cut, or waiting and extracting the money with a 2% cut, ..., or waiting until there is no money left.

> Whenever a user buys or sells Unum through the Unum Smart Contract, the current US dollar value of the exchanged cryptocurrency is found on another smart contract, called the Price Oracle. The Price Oracle is constantly being updated with the current average price of crypto-currencies. This price oracle allows Unum to maintain it's link to the US dollar.

Cool project! How do the updates work? There's a server somewhere running a scheduled task that pulls in the prices and pushes the average. How often does it run? What if it fails to run? Can the lag between the average price given by the Price Oracle and the actual average be taken advantage of in terms of making money?

It checks for price changes every minute, and sends an update if the price change is greater than half a percent. If if fails to run (server down) I get an alert.

You could do arbitrate with the Unum Smart Contract the same way you could with an exchange, but true arbitrage opportunities are rare.

How does it differ from tether (https://tether.to/) ?

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