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The advantage of a stable coin being a colored coins is that it is live on the tangle and does not sit within a contract. Whereas the shortcoming is that you cannot add more if it. The amount is fixed. So let's say I'd like to build a company that issues stablecoins, should I go for colored coins or for contracts? As soon as the central bank creates more money, I can't just update the amount of colored coins because it's fixed. I'd need to issue another colored coin. Thats not practical. But it seems like colored coins should be the way to go. But fixed supply limits it.

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Making a fixed number of stable coins is good as long as you back it up. You can make 1 Billion stable coins with a MIOTA. That is a reasonable buffer, you can always just issue more if you need more and create a little mapping of all the hashes of each issues stable coin realease. It would totablly be sustainable.

Currently, in IOTA, if you want to create and control your own token supply you would need to hack the hornet software a little bit to allow POW nonces with a different signature than the normal IOTA ones. Tokens that have this different form of POW would not be seen as valid IOTAs but can be seen as valid BETAS owned and supported by your own network of hacked hornet nodes. By being a normal actively participating hornet node in the network you can propagate your own form of tokens throughout the IOTA network allowing you to create your own supply. You could then make an address that allows the issuing of new tokens.

You would have to own IOTA's in order to have mana to issue transactions though just to support your node software on-top of the preexisting IOTA network. Ultimately it might be more hacky than just issuing batches of colored iota tokens.

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  • thx. That sounds good. I wonder wether the mapping could lead to trust issues because I could sell something and the other person just says it's a USD stablecoin. I'd need to verify that somehow, e.g. that it is indeed issued by company XY. Wouldn't it make sense to display the issuer of the color when calling ./cli-wallet balance?
    – user5793
    Jun 26 at 14:49
  • the hack to create BETAs sounds crazy, and it's astonishing that you can hack the software and other nodes would accept and propagate it!
    – user5793
    Jun 26 at 14:52
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    @Atoi iotA, As long as the node is still propagating normal IOTA transactions and the ones for BETAs are legitimate transaction with BETA coin meta-data then yeah the network will assist you because its just data for them.
    – Tsangares
    Jun 27 at 19:42
  • Can I read more about that anywhere? Discord, stack, source code? I removed "accepted answer" because I think right now I'm not able to judge whether the BETA approach actually works, and there's right now no other comment or like backing this
    – user5793
    Jun 28 at 13:47

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