Stable

The x/stable module manages the minting and burning of a native stablecoin, backed by a basket of accepted collateral assets.

Key Features

1. Minting and Burning:
   • Allows minting of the native stablecoin against approved collateral.
   • Allows burning of the native stablecoin to redeem collateral.
2. Collateral Management:
   • Supports a configurable basket of accepted collateral assets, typically IBC denoms.
3. Permissioned Control:
   • Restricts mint and burn operations to a whitelist of authorized addresses.
4. Dynamic Exchange Rate:
   • Calculates exchange rates dynamically based on the exponent (decimal places) of the involved tokens, ensuring fair value exchange.
5. On-Chain Auditability:
   • Provides full transparency of all operations and balances for easy auditing.

Core Concepts

Note: The following section covers advanced topics intended for experienced users or developers.

Parameters

The stable module’s behavior is controlled by a set of on-chain parameters:

• authority_addresses (string[]): A list of addresses authorized to execute MsgMint and MsgBurn.
• accepted_denoms (string[]): A whitelist of collateral asset denominations that can be deposited to mint the stablecoin. These are typically IBC denoms.
• stable_denom (string): The denomination of the native stablecoin minted by the module (e.g., uusdrise).

Exchange Rate Calculation

The exchange rate between the collateral asset and the native stablecoin is not hardcoded. Instead, it is calculated dynamically using the exponent field from the DenomMetadata stored in the x/bank module.

If DenomMetadata is not found for a given token, its exponent is assumed to be 0. This ensures a fair exchange rate for tokens based on their specified decimal places.

Workflow: Minting and Burning

Sequence Diagram

sequenceDiagram
    participant Authority as Authorized Address
    participant StableModule as x/stable Module
    participant BankModule as x/bank Module

    note over Authority, BankModule: Mint Process
    Authority->>StableModule: MsgMint
    activate StableModule
    StableModule->>BankModule: Transfer collateral from Authority to Module Account
    StableModule->>BankModule: Mint stablecoin to Module Account
    StableModule->>BankModule: Send stablecoin from Module Account to Authority
    deactivate StableModule

    note over Authority, BankModule: Burn Process
    Authority->>StableModule: MsgBurn
    activate StableModule
    StableModule->>BankModule: Transfer stablecoin from Authority to Module Account
    StableModule->>BankModule: Burn stablecoin from Module Account
    StableModule->>BankModule: Send collateral from Module Account to Authority
    deactivate StableModule

Messages

The module supports the following messages:

• MsgMint

  • Action: An authorized sender deposits collateral to mint the native stablecoin.
  • Process: 1. Verifies the sender is in authority_addresses. 2. Confirms all deposited denoms are in accepted_denoms. 3. Transfers collateral from the sender to the module account. 4. Calculates the corresponding amount of stable_denom to mint using the exponent-based exchange rate. 5. Mints the calculated amount of stable_denom and sends it to the sender.

• MsgBurn

  • Action: An authorized sender burns the native stablecoin to receive a chosen collateral asset.
  • Process: 1. Verifies the sender is an authority. 2. Confirms the requested output_denom is in accepted_denoms. 3. Transfers the input_amount of stablecoin from the sender to the module and burns it. 4. Calculates the corresponding amount of output_denom to return using the exponent-based exchange rate. 5. Transfers the calculated collateral amount from the module account to the sender.

Queries

The module provides various query endpoints:

• Params: Query the current module parameters.
• ModuleAccountBalance: Query the balance of all collateral assets held by the module account.

Auditability

All mint and burn operations, collateral balances held by the module, and the total supply of the stablecoin are publicly accessible on-chain. This design ensures that the stablecoin is always transparently and verifiably collateralized by the assets held in the module account.

See Github for details.