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I need help regarding stable coin, particularly like USDT and BUSD, pegged to US Dollar. I am working on a stable coin project. The smart contract needed to be developed in solidity and deployed on Ethereum network. I have done my research and so far the points i noted are;

  • An ERC20 token contract will be developed with special permissions to particular wallet (Admin/Owner Wallet) for minting and burning tokens.
  • The company launching the stable coin is responsible for managing the USD reserves against which the tokens are minted.
  • Whenever a new user wants to get tokens, he will deposit an amount (in USD) to company reserves, and the company will mint equivalent amount of tokens for the user.
  • Whenever a user wants to cash out (get USD for his/her tokens), his/her tokens will be burned by the comapny and equivalent amount of USD will be issued to user.

So far this is what i think how pegged a stable coin works.

Am I on right track or missing something.

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