Over the years there have been several successful stablecoin designs namely:
Custodial Stablecoins:USDT, USDC, BUSD etc...
Fractional Reservs: FRAX
Non Custodial: DAI, MAI, MIM etc...
Each model has its pros and cons. The success of these ecosystems also largely depends on the performance of its native / governance token like FXS of FRAX and MKR of MakerDao.
The article is inspired by Polyquity's newly proposed road map of a multi-collateralised stable coin "PYD" which is backed by a wide variety of assets, each with its independent pool. This helps reduce threats since the failure of any one pool will not have an impact on the others as they are isolated pools.
Below is a Diagram of how this would look in the case of Polyquity:
In the Multi-Collateral version, a new Trove contract for each collateral will be available. These Troves are independent of each other for security reasons.
For example: when the system supports USDC and WBTC as collateral, users can stake USDC and WBTC to trove.usdc and trove.wbtc in order to mint PUSD.TOKEN.
These PUSD.TOKEN can be exchanged and redeemed for PYD at a 1:1 ratio and this would be the primary stablecoin of Polyquity.
