Physical or digital gold: simple insurance on Ergo

Here’s the old idea from Summer’2019 which now looks feasible with gold-pegged stablecoins coming.

At this point it also looks like a continuation of (E)mail Client for Limited or Blocked Internet in the sense that new proposal in this post is also about ensuring a right of an individual to store and transfer wealth, including moments when banking networks and state could be dysfunctional or non-existent.

As motivation, let’s assume that someone is buying a brick of gold in Dubai remotely, precisely, buying a right to get a brick of physical gold e.g. within 6 months. However, there is possibility of borders being shut down (due to pandemia, wars etc), so it is desirable then to also buy an insurance option which will deliver digital gold when it is not possible to deliver physical.

So the gold vault is taking some insurance payment , sends an unique NFT to a client (and the client must send NFT back when getting brick of gold in the valut) and puts digital gold (gold-pegged stablecoin tokens) into a box with the following contract:

  • after insurance period end, allow for digital tokens return to the vault
  • at any moment before insurance period’s end, client or vault can present NFT and order digital gold tokens transfer to any address (for additional security vault can do transfer immediately on getting NFT when the client is visiting the vault)

Contract like that is very simple (just time-locking and check for NFT in inputs). At some point such contracts will be designed in visual tools like blockly with no coding at all.

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The magnitude of this… nobody want to comment. So I’ll have a go.

It requires gold stable coin to have significant value, relative to a giant pile actual gold in Dubai.

Bootstrapping collateral/liquidity is difficult, there is a natural reluctance, as Tesla would have said.

But using the Ergo Platform to offer straight forward insurance solution, invites investment and forward motion. It also invites copies, as we see in the Djed Alliance and Stability Nexus. It is good, but it complicates matters.

Being first and right isn’t enough to ensure popularity in the short run, but it is the method to be a refuge when the consequences of rampant centralization become apparent.

Leaving aside the market and politics, this idea is pure and good, It can be pushed with the help of believers, and exploited by the move-fast, break-things crowd.

But doing it correctly, and getting real world players to use it… eventually we win.

Because gold/bond investors are not about moving fast or breaking anything.

As always, sir, I salute your clarity of thought and expression.

Getting real goldbugs involved would be an interesting expansion of our marketing and development reach, too.

Difficult sales lead to devoted customers.

That’s my thoughts. Maybe a few branches that could be held or broken. Have at it, Ergonauts.

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