This page serves as a resource for those discovering the DebtCoin memecoin.

Note: As of February 5th, 2025, The liquidity pool for DebtCoin is now LIVE! Spend a few dollars and show your support!

Purpose of DebtCoin Memecoin

DebtCoin is a memecoin designed to fund an inflation-resistant stablecoin pegged to the U.S. national debt, serving as a critique of the United States’ profligate fiscal policy.

I created the DebtCoin memecoin to:

  1. Gauge interest in the idea and assess whether the DebtCoin stablecoin is worth investing in.

  2. Generate initial funds through DebtCoin memecoin fees for potential DebtCoin stablecoin development.

If the memecoin isn’t a total failure (which I expect, but hey, crazier things have happened in crypto!), I’ll commit more resources to developing the actual stablecoin, refining its mechanics, governance, and reserve management.

In short, the DebtCoin memecoin will determine whether the DebtCoin stablecoin progresses.

More about me on the homepage of this blog.

Social Channels

Expect updates to begin on Twitter and Telegram.

I use the rest of this post to summarize the concept behind the DebtCoin stablecoin I hope to build. This is essentially a consolidation of three DebtCoin posts I wrote late last year, making it easier for you to grasp the concept in one place.

Like what Seymour Durst did with the original Debt Clock in New York City in 1989, the DebtCoin stablecoin is an attempt to use crypto to highlight the growing national debt and its implications.

DebtCoin: A Stablecoin Pegged to the U.S. National Debt

Abstract

DebtCoin is a proposed stablecoin pegged to the U.S. national debt, combining stable pricing with a critique of US fiscal policy. It merges transparency with crypto’s decentralized ethos.

1. Introduction

Traditional stablecoins peg to fiat or crypto. Algorithmic stablecoins often collapse under market stress, and fiat-backed stablecoins depend on centralized entities.

DebtCoin takes a different approach. By pegging its price to U.S. national debt, it ensures relative stability, aligns with transparency principles, and highlights growing government debt.

DebtCoin offers:

  • Predictable pricing

  • Collateralized reserves

  • Transparent fiscal tracking

  • Usability for daily transactions

2. Implementation

2.1 Price Mechanism

DebtCoin’s price formula:
DebtCoin Price (USD) = U.S. National Debt / 10,000,000,000,000

For example, if the national debt is $35.92 trillion, each token is worth $3.59.

2.2 Oracle Infrastructure

A multi-oracle system fetches reliable price data from sources like U.S. Treasury Direct and the Federal Reserve, using median-based calculations to filter anomalies.

2.3 Reserve System

DebtCoin ensures security and transparency through:

  • 100%+ collateral in USD

  • Real-time proof of reserves

  • Regular third-party audits

2.4 Minting Mechanism

Tokens are minted upon deposit and burned upon withdrawal, ensuring controlled supply.

3. Reserve Management

3.1 Rollout

DebtCoin will launch with an ICO, offering tokens at a discount (e.g., 90% of debt value). Initial proceeds will fund operations and currency development. Restrictions like throttled selling will prevent rapid profit-taking.

At launch, reserves won’t be 1:1. The short-term goal is parity; the mid-term goal is exceeding it. Funds will be allocated to low-risk assets like Treasury bills and TIPS, ensuring liquidity and stability. Transparency via real-time tracking and audits will build trust.

3.2 Scenario Handling

Here’s how DebtCoin could handle potential scenarios.

Scenario 1: Rapid Debt Increase

  • High Liquidations: Holders may sell to secure profits. A phased liquidation approach (e.g., partial payments over two weeks) and dynamic transaction fees can mitigate risk.

  • High Purchases: New buyers may rush in. The system must handle rapid minting and potential future sell-offs.

Scenario 2: Rapid Debt Decrease

  • High Liquidations: Easier to manage with strong reserves.

  • High Purchases: If reserves deplete and debt rises again, liquidity challenges may emerge.

Stress tests will simulate extreme events (e.g., wars, inflation) to ensure resilience.

3.3 Long-Term Goals

DebtCoin aims to diversify reserves into:

  • Commodities: Gold and metals for inflation hedging

  • Global Currencies: Reducing USD dependency with Euro, Yen, etc.

  • Crypto Assets: Low-volatility digital assets

  • Treasury Inflation-Protected Securities (TIPS)

Expanding reserves could enable advanced features like yield farming and payment systems.

4. Governance Framework

4.1 Immutable Components

Core features locked into the protocol:

  • Price formula (Debt/10T)

  • Minting/burning mechanics

  • Security framework

  • Oracle integration

4.2 Upgradeable Protocol Parameters

Adjustable settings via on-chain voting:

  • Reserve Ratios: Initially 100% USD-backed, adjustable over time

  • Transaction Limits: Caps on minting and burning

  • Fees: Dynamic (e.g., 1%) to support operations

  • Oracle Settings: Data weighting and validation

  • Emergency Protocols: Circuit breakers (e.g., 24-hour minting pause)

4.3 Hybrid Governance

A mix of off-chain discussions and on-chain execution:

  • Reserve Composition: Community proposals for new assets (gold, crypto)

  • Liquidation Procedures: Debated off-chain, implemented on-chain

4.4 Emergency Powers

For critical situations:

  • Emergency Pause: Suspend operations in crises

  • Multisig Control: Consensus-driven decision-making

  • Strategic Oversight: Ensuring long-term alignment

5. Conclusion

DebtCoin integrates security, transparency, and usability while critiquing fiscal policy. Features like yield farming, lending, and liquidity solutions position it as a next-generation stablecoin.

By merging transparency with practical applications, DebtCoin aims to redefine stablecoin utility and governance.