Stablecoins & CBDC
Research Papers
Academic and industry research
Libra White Paper: An Introduction to Libra
Libra Association
The Libra white paper outlines the vision for a global, low-volatility digital currency built on a secure, scalable, and programmable blockchain. Initiated by the Libra Association, the project sought to provide an accessible financial infrastructure for unbanked populations by integrating with existing social and messaging platforms. The protocol is built on the Move programming language, designed specifically for secure transaction processing. A core architectural feature is the 'Libra Reserve,' a collection of low-volatility assets such as bank deposits and short-term government securities held in custody to back the currency and prevent drastic price fluctuations. The paper proposes a permissioned consensus mechanism, leveraging the LibraBFT consensus algorithm to achieve high throughput and low latency. The design emphasizes modularity, security, and a governance structure overseen by the Libra Association, a consortium of diverse business and non-profit entities. Despite the project's eventual pivot and rebranding, this paper remains significant for its analysis of the tensions between regulatory compliance, decentralized governance, and the technical requirements of high-frequency payment networks in the global financial ecosystem.
The Dai Stablecoin System (MakerDAO)
MakerDAO Team
The MakerDAO whitepaper introduces Dai, a decentralized stablecoin running on the Ethereum blockchain that maintains a soft peg to the US Dollar. Unlike fiat-backed stablecoins, Dai is created through an over-collateralized lending mechanism using crypto-assets. The system utilizes a dual-token model consisting of Dai, the stable unit of account, and MKR, the governance token. Users lock collateral into autonomous Smart Contracts known as Collateralized Debt Positions (CDPs), allowing them to mint Dai against that collateral. To maintain stability, the system uses automated mechanisms like the stability fee and the Dai Savings Rate (DSR) to manage supply and demand dynamics. When the value of the collateral drops below a threshold, the system triggers automated liquidations to ensure the protocol remains solvent. This paper is a foundational document in the decentralized finance (DeFi) movement, demonstrating how algorithmic governance and smart contract systems can replace traditional financial intermediaries to manage liquidity and market volatility in a trustless environment. It remains a key case study for the design of collateral-backed synthetic assets.