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I have some bitcoin amount in the wallet of the app I am building. These funds are used to run some transactions between the users of the app. Say, I have 1 BTC and it's $22000 today. But tomorrow it will be $20000 or $25000.

What are technical solutions to make it stable for my app without having to move it into something like USDt in a third party exchange?

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    Isn't hedging the standard approach to volatility in currency exchange-rates? Do you want a dollar payment system not a payment system that uses a different currency? Feb 14, 2023 at 11:18
  • Yes, hedging looks like a solution. But, can it be applied when I just have some BTC in my wallet, using my own bitcoin node and operating transactions directly? To me it looks like to hedge I need to move these funds to an exchange, like Binance, Huobi? Feb 14, 2023 at 11:55

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So there are lots of technical reasons you should think about what you want your "stable" value to come from. USDT for example is not the best but is also not the worst in the world of centralized stable-coins, however that is not saying much... (censorship, wash trading, insider minting, laundering, etc...) I would strongly recommend you look into decentralized bitcoin based solutions, and also don't just ape funds into them, treat them as if they are not provably secure (because at this point they are not, however they seem quite conservative and open about assumptions). One example of an experimental decentralized bitcoin based stable-coin service is Taro which allows you to issue your own stable-coins against your own collateral (bitcoin). And these coins would be theoretically 100% redeemable for the underlying value assuming the dynamics are secure. But like I said this is experimental stuff so do not just ape into it, especially since it is for stable value. Hedging into a stable value usually does not inspire this behavior but I still want people to be cautious with new financial products.

“As an example, if Alice wants to send Bob a Taro stablecoin asset, she’ll create a new invoice that quotes, say, $10,” Osuntokun said. “Bob will then use a ‘hop hint,’ which are extra routing details provided in the invoice to complete the route and calculate the amount of network fees (paid in bitcoin) to send over his first hop, which will traverse the internal Bitcoin backbone and eventually drop off enough BTC at the final hop to complete the payment. Taro

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