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Silk
Private. Global. Stable.
Silk is a privacy-preserving collateralized reflexive currency pegged to a basket of global currencies and commodities. With six second transactions, Silk is fast and agile. Launched by Shade Protocol and powered by Secret Network, Silk is a futuristic stablecoin that acts as an interoperability hub between global currencies - acting as a perpetual hedge against macro volatility and inflation.
Stablecoins to date suffer from four key problems:
  • Stability
  • FX risk
  • Privacy
  • Interoperability
Silk uniquely solves each of these components, positioning itself to be a truly futuristic Web3 currency.
Silk Whitepaper 3.0.pdf
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Stability

Stability of a stablecoin is defined as the ability for system wide liabilities to redeem for a corresponding amount of value via either redemption or sale. The more collateralization of the underlying minted stablecoins, the more asset backing per liability minted. Silk solves for stability by having five different stability mechanisms:
  • Bounded Conversion Minting
  • Overcollateralized Minting
  • Redemption Pools
  • Collateral Redemptions
  • Bonds
Between these five stability mechanisms, Shade Protocol has a wide range of tooling to safely grow Silk overtime with a level of fine tuning that is currently inaccessible to stablecoins that only have one or two stability mechanisms.

FX risk

To date, the vast majority of stablecoins take the form of a USD pegged stablecoin. It is critical to note that the US dollar continues to lose both global marketshare as well as purchasing power.
How can we say that stablecoins are decentralized if they are pegged to centralized monetary systems? Silk is pegged to a basket of global currencies and commodities - reducing FX risk via diversification.
Additionally, Shade Protocol governance has the ability to migrate the composition of the Silk basket. This gives Silk a degree of agility to react to major changes in the macro environment. Stablecoins that are pegged to sovereign currencies do not have this flexibility, and do not have the agility to adapt to major changes in the global economy.

Privacy

The majority blockchains are transparent by default. This exposes user asset transfers and smart contract interactions. In order for stablecoins to get truly integrated into everyday commerce, there needs to be on-chain privacy. Again, imagine you want to a hot dog stand and purchase food. On a public blockchain (such as Ethereum) the cash register could see your entire crypto balance and every transaction you've made since the inception of the wallet used.
Silk is built on Secret Network, the first blockchain with customizable privacy. Users get to choose what they share, with whom, and how. This protects users and empowers developers to build a better Web3.
โ€‹Viewing keys are used to validate the identity of someone who queries a specific account. Viewing key empower users to safely decrypt their own transactions and data. They can be generated to allow third parties, including other contracts, to view an individualโ€™s balance.
Using the power of Secret Network and viewing keys, Silk as a stablecoin is well positioned to bring privacy to everyday commerce and transactions. Privacy working in tandem with Silk is key to unlocking the full value of a decentralized future.

Interoperability

In order for Silk to become the de facto stablecoin of Web3, it must be compatible with a range of blockchains and Web 2.0 products. Bridging solutions for Silk are inherited by extension of being native to Secret Network. Silk is compatible with the following bridges:
  • Inter Blockchain Communication Protocol (IBC)
  • Binance Smart Chain
  • Ethereum
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Stability
FX risk
Privacy
Interoperability