The Onomy Reserve (ORES) is a Decentralized Reserve Bank, integral to achieving the convergence of Forex and Decentralized Finance by providing on-chain minting of stablecoins, or denominations of fiat currencies.
A decentralized methodology to mint stablecoins benefits high-powered institutions, as well as democratizing access to stablecoins for individuals across payments, storage of money, currency exchanges and transfers. In conjunction with the scalable Onomy Network, Arc Bridge Hub, and the Onomy Exchange - the ORES would be a significant addition to Onomy’s ecosystem by opening FX markets on the ONEX and utilizing the Arc Bridge Hub as a gateway for liquidity across all integrated blockchains.
Proposed Onomy Reserve:
- Multi-currency support (USD, EUR, YEN…)
- Integrate NOM into a multi-stablecoin right-to-mint model
- Enable a denomination staking rate to ensure appropriate capital inflows and outflows
- Minimum Collateralization Ratio dictates maximum amount of denoms minted
- Reserve Capture Ratio dictates capture of NOM by reserve
- Reserve Burning Ratio dictates ratio of captured NOM that is burned to that which is held by reserve
- Closed loop: No outside oracles, the Onomy Exchange provides pricing data via its FX markets
- All parameters voted on by the Onomy DAO of NOM token holders
The stablecoin market cap continues to grow significantly. Currently, the US Dollar dominates overall stablecoin market cap. It is expected that as the stablecoin market cap grows, various national currencies will begin to have meaningful volumes and share of the market. A multi-trillion dollar total market cap with various national currencies is an inevitability. Thus, the Onomy Reserve must be have multi-currency support.
NOM, as the native coin of Onomy, must play an integral part in the minting process. Rather than a strictly collateral-based issuance with endogenous collateral that we have seen fail before, Onomy Reserve proposes a right-to-mint model. Any endogenous collateral should not impact market pricing.
The Denomination Staking Rate, Minimum Collateralization Ratio, Reserve Capture Ratio, and Reserve Burning Ratio all provide levers that will impact the system stability and drive liquidity to where it is needed for balance to be upheld. These parameters enable the Onomy DAO to adjust the system programmatically via on-chain voting.