BitMEX co-founder Arthur Hayes has proposed a Bitcoin-backed dollar-pegged stablecoin NakaDollar (NUSD) which would be backed by $1 Bitcoin and one inverse perpetual swap of BTC against USD.

In a March 8 blog post, Hayes said the stablecoin would not rely on USD reserves or centralized entities like banks. Instead, the NUSD will be backed by derivatives exchanges listing liquid inverse perpetual swaps.

The combination of short BTC positions and USD inverse perpetual swaps ensures that no matter the value of Bitcoin, the dollar value of the stablecoin will remain stable.