Serenus Coin is a stable coin system. It issues a crytocurrency that retains a stable value with respect to the US dollar by holding ethereum as crypto-collateral. Issuers take on the risk of holding ethereum for a small fee. Users receive a dollar-equivalent value of serenus. It is available to anyone at any time as a store of value or medium of exchange on the ethereum mainnet.
The smart contract system that Serenus Coin is built on provides extremely good prices for swapping between ether and dollar-stable serenus. The bid/offer spreads are far better than on other decentralised exchanges and commissions are comparable to centralised exchanges. Note that this is a specialised exchange: you can only swap between ether and serenus and back again. See the white paper for more details.
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There are two types of participants in Serenus Coin system. Issuers stand ready to buy and sell ether in exchange for serenus at the prevailing rate for ETH/USD. They are the market-makers of this system. Users are free to exchange their ether for serenus or vice-versa at any time.
There are three types of stablecoin currently in existence. Serenus is a fourth type.
Dollar collateralised stablecoins like Tether and CircleUSD issue one stable token for each dollar sent to them. They are not readily accessible to small investors. A number of questions have been raised about the auditability of these systems. How many dollars do they really hold and have they been lent out by their banks? Also, can accounts be frozen and transactions rolled back or are they transparent and immutable?
Algorithmic supply stablecoins do not work. NuBit broke down a year ago. Basis recently returned over $130 million dollars in investor funds and closed down before product launch.
The MakerDAO crypto-collateralised system is very well designed as a borrowing system but is capital inefficient when producing stablecoins. At the end of 2018, there are about $60 million dollars of Dai in circulation against about 1.6% of all ether being locked up in MakerDAO contracts. There are a total of about $2 billion dollars in dollar collateralised stablecoins in circulation. To match that, about half of all ether would have to be locked up at current prices in the MakerDAO system.
With Serenus Coin, simply sell your ether to receive stable serenus instead. Switch back into ether at any time. Issuers work hard to stabilise your serenus in return for a commission on each purchase of serenus. They act as a bridge between liquid ETH/USD exchanges and the Serenus system. This is a scalable on-chain solution to a transparent crypto-collaterised stablecoin. It combines the best features of a dollar-collateral system like Tether with the decentralised and uncensorable MakerDAO system.
Simply send some ether to an issuer smart contract. If the current ETH/USD price is, for example, 100 dollars, and you sent in 1 ether the address you send the ether from will automatically receive about 100 serenus.
Issuers receive a 0.20% commission. The ERC-20 Serenus contract will also charge a 0.10% commission. In the previous example, you will receive 99.7 serenus in exchange for 1 ether. You will also have to pay a few cents in gas to execute the smart contract. These costs compare favourably to most centralised retail exchanges yet remains an entirely on-chain decentralised and immutable operation.
Simply use any issuer contract to sell your serenus. You will get back an appropriate amount of ether given the then current ETH/USD rate. There are no commissions for cashing out serenus into ether to encourage adoption of serenus as a stable means of payment.
Anyone willing to hold a leveraged long position in ETH/USD may use the Serenus Factory contract to create their own Issuer contract. Issuers stand ready to authorise the minting of new serenus or burn old serenus coins against collateral they deposit in their Issuer contract.
This is not like the MakerDAO CDP (Collateralised Debt Position) contract where issuers lock-up ether in return for borrowing Dai at a time of their choosing. Issuers of serenus may be market-makers who are willing and able to hedge their exposures elsewhere or simply long holders of ether who are willing to take on extra risk.
In the Serenus Coin system, the minimum collateral level is currently 120%. But only 20% is from the issuer themselves. The rest is sold into the contract by users over time. This is a much more efficient structure for creating stablecoins.
Issuers are free to set a higher collateral if they wish. For example, they may set a target leverage ratio of 200%. In that case their contract will only accept up to 1 ether from users for each 1 ether that the issuer has deposited.
The Serenus system has an Oracle contract that draws ETH/USD prices from the Uniswap ETH/DAI pool, and the Kyber Network’s ETH/USDC and ETH/TUSD reserves. Serenus is in effect pegged to an average of those stablecoins using live market driven prices.
There are interesting trade-offs here between cost, scalability and trust. Drawing prices directly from on-chain sources of liquidity is trustless and efficient. Running a Schelling point oracle system is clearly going to be expensive if it is to be truly trustless. No stablecoin method uses such a system at present because the costs will have to be passed onto users. Until serenus issuance exceeds fiatcoins like Circle USD, Gemini and Paxos, the costs outweigh the benefits for running a truly decentralised Schelling point oracle system.
Sure. Suppose the average ETH/USD rate at present is $100.
An issuer creates a Issuer contract and deposits 1 ether. They set their target leverage ratio to 200%. Before any user interaction the current leverage ratio for the Issuer contract is infinitely high because it has authorized no minting of serenus.
A user sends 1 ether into the Issuer contract. The user receives 100 serenus (less commissions). The Issuer contract now holds 2 ether and the leverage ratio has fallen to 200%. As the target has been hit, the contract will no longer authorize minting more serenus.
Two price points:
Suppose ETH/USD moves up to $200. Any user may send 100 serenus into the Issuer contract. The Issuer contract sends back 0.5 ether (representing $100 of value). As this Issuer contract no longer has any serenus liabilities, the issuer may close the contract and retain the remaining 1.5 ether (now worth $300).
Alternatively, suppose ETH/USD moves down to $60. At that point the Issuer contract will have hit a current leverage ratio of 120%. Any further move down will mean that the Issuer contract can be taken over by anyone, but users can send in 100 serenus at any time and receive full payment (down to a $50 dollar price level).
They will incur a significant penalty if they do not do so. If the current leverage ratio of any Issuer contract falls below 120%, anyone may take over that contract. They will automatically gain the remaining portion of collateral (between 0% and 20%) in return. A small portion of the collateral is sent to the insurance contract. The original issuer receives nothing.
The Serenus system works with a dynamically set minimum leverage ratio. If the value of serenus falls below $1.00 the minimum leverage ratio can be ratcheted up until confidence in Serenus Coin is restored. Likewise, the minimum ratio may be reduced if the system is working well.
A 120% represents a 5x leverage long position in ETH/USD. Multiple exchanges provide much more leverage than that and have continued to function well in multiple market environments. Issuers may use such exchanges to hedge their exposure to serenus.
If an issuer contract falls below 100% collateral, the insurance contract can be called to send ether into that smart contract. Enough will be put in, if funds are available, such that taking over that contract is attractive again.
No. It is analogous to an exchange in the sense that any user sending ether into an Issuer contract receives a fungible dollar-stable coin in return. Bid-offer spreads and fees are competitive with centralised exchanges. However, this decentralised system works entirely on the mainnet.
Issuers work best as market-makers who hedge their exposure to serenus issuance elsewhere. But as a permissionless system, anyone willing to go long ETH/USD can create Issuer contracts.
Both are great projects. MakerDAO in particular have been doing very well recently. When Multi-Collateral Dai (MCD) is released, probably later this year, MakerDAO and Synthetix will form a nice complementary pair of stablecoin designs. MakerDAO’s MCD will accept many different types of collateral to stabilise a dollar-pegged stablecoin. Synthetix, on the other hand, use one form of collateral — their own token — to back different kinds of pegged coins (different fiat currencies, gold, etc.).
Serenus focuses on one simple fact. When you separate out being willing to go long ETH/USD and wanting to hold an ether-backed stable token, you produce a system that is scalable in the same way that fiatcoins like Tether, Circle USD, etc. are scalable. This may be the only way for a crypto-only stablecoin to compete effectively with fiatcoins. Scalability is limited only by an appetite for risk by long holders of ether.
There are six contracts in the Serenus Coin system. See the white paper for details and github for the smart contract code.
To add to MetaMask and other wallets, copy the ERC20 address below and click on “add token” in your wallet.
| Contract | Address |
|---|---|
| ERC20 | 0x4cFA9C487B533708B8ca10E0eA8adbE4Af9ACeD3 |
| Oracle | 0x92ea86C9792723B5aE2aD87300CeE6693411BbA1 |
| Governor | 0x4b5b17f3c5FcBcf0677309384EDC2fb6f04f65d9 |
| Issuer template | 0x150b32135ABDF7671b1177F20673C8AC5Bf8fF28 |
| Factory | 0xd270524f12E9762E8289A9C3Dd7a653E2748aD97 |
| Insurance | 0x7A4C656a70c34166a9A15c3537e7B7a1Be65649E |