Update:
Detoken to Shut Down Operations on September 4, 2021
In my opinion, one of the biggest hurdles in the adoption of BCH by merchants is the high volatility. Everyone knows that prices fluctuate very strongly. For 1 BCH, an hour later you sometimes get $10 more, sometimes less. This is not acceptable for merchants. Merchants need stability. They need to pay their employees and their suppliers. Most merchants do not want to take such a risk and will not do so. There are of course great companies like GoCrypto or Bitpay that help merchants and exchange cryptos into fiat, but first of all these companies do not operate in every country and secondly they charge fees for their service (which goes without saying). Another option is to use stable coins, but they are mostly issued by companies (e.g. USDT, USDC) and mostly use Ethereum blockchain, which is very expensive at the moment. A $1 USDT payment on Ethereum blockchain costs more than a $10 fee.
As I've been trying out Detoken lately, I've also been looking into the Anyhedge protocol, which is the basis for Detoken. Everyone who uses Detoken knows that with Detoken you can block any amount of money in USD for about 24 hours. After about 24 hours, the amount is unlocked and the user gets exactly the same amount back in USD, regardless of whether the USD price went up or down. I took a closer look at the Anyhedge protocol and found that it can also be used to redeem smart contracts manually. Then an idea came to me.
How about programming a wallet for the merchants that automatically converts every payment received into a smart contract hedge? Each received payment would then be blocked with the exact USD amount with which it was paid. When the next payment comes, a new hedge smart contract would be concluded with a new USD/BCH price ratio, which would not matter to the merchant. The merchant would be sure that the USD value of the money he had received would not change.
In this way, the wallet would represent a series of smart contracts. The duration of the contracts could be set to 1 month (perhaps longer), for example. If the trader were to spend something from his Wallet, his contract would be terminated manually. If the merchant were to spend $10, a hedging contract would be manually terminated, the merchant would receive exactly his $10, regardless of what the price is at the moment, and a new hedging contract would be automatically concluded with the remainder. If the amount to be spent were larger, several contracts would be terminated and a new hedging contract would automatically be concluded with the remainder.
For each hedging contract, i.e. for each payment, the wallet would retain a small percentage fee, as Detoken currently does. This small fee would be the price that the merchant would have to pay for the service. The wallet could conclude the contracts not only on a USD basis, but in any national currency, which would offer the merchants 100% security, because the exchange rates of the national currencies to USD also change.
The advantage of this solution is obvious. The merchant is sure that the money he earns is always stable. He is not dependent on any company, as the smart contracts are concluded directly in the blockchain. The fees paid to the wallet creator will probably be lower than with GoCrypto or Bitpay.
What do you think of this idea?
This is an old post, I'm sorry for dropping a comment on it months after it publication.
The issue of Price volatile affecting merchants has always been on my mind. I planned on getting some stores into accepting BCH but i was afraid that they will feel discouraged if the $500 sales made today turns to $560 tomorrow. Though there will be days when the $500 will turn to $550. But as human they will show their distaste when it falls no matter the previous gain. Since the post was made long ago , i hope this was implemented or something close to this to protect the merchants money from the volatility of bitcoincash.