Please describe your proposed solution
A key reason why Djed is stable is that it is backed by an independent asset that has it own utility, its own intrinsic value and its own monetary policy. In the case of Djed on Milkomeda, this asset is ADA (in its bridged form, mADA).
The challenge with this approach however is that, in contrast to many other (un)stablecoin protocols, which print their own tokens out of thin air to "back" their stablecoins and thus can incentivize liquidity provision with these tokens, Djed cannot do this.
Between a reliable stablecoin backed by a solid asset and an unstablecoin backed by thin air but offering exorbitant APRs, what do users prefer? Unfortunately, many prefer the latter. And then reliable stablecoins remain unknown.
But, with your help, with the help of Catalyst, we can provide a decent APR for liquidity provision, by distributing Catalyst funding as rewards for users who provide liquidity to Djed.
Here is what we will do:
1 - We will create a staking vault for MOR (Milkomeda Djed Osiris's Reservecoin).
2 - We will use catalyst's funding to buy MOR using ADA. (This will immediately and directly boost TVL.)
3 - We will distribute the bought MOR as rewards to MOR stakers.
The distribution schedule will be such as to ensure a decent, though not exorbitant, APR, probably in the range from 10% to 20%.
As a staking vault mechanism, we will use hodlCoin (https://hodlcoin.co.in). This staking protocol has been invented by us and it is conjectured to have a stabilizing effect. Most importantly it imposes an unstaking fee that discourages unstaking. This will ensure that we will be incentivizing long-term liquidity providers and not just distributing rewards to short-term reward "farmers".