January 21, 2025 ☼ Crypto ☼ Payments
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!
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:
Gauge interest in the idea and assess whether the DebtCoin stablecoin is worth investing in.
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.
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 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.
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
2.1 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.
3.1 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.
4.1 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
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.