I think pegging to the price of 1/100 of gold would work. Unlike PAXG, I don't think we would need it to actually have any gold on deposit. Although, the price fluctuation of gold could be problematic. Each coin would be about $18 at today's price.
The reason I am thinking of gold is that it is something that could be easily tracked with oracles. The stablecoin would also have a basis on something physical that can't be counterfeited. Yes, more can be mined. But, as a total of the stock, it won't change the price drastically. Gold would just be the standard, not the backing. Or silver, or platinum. Whatever.
Gold is difficult because of its physical nature combined with the oracle attack vector. On top of that precious metals are grossly manipulated by the derivatives market. The derivatives are so powerful they control the price of the base asset.
Personally I would only own physical gold, but it will be interesting to see how the gold pegs hold up.
We've seen how BTC is manipulated by contracts as well. I don't think anything is safe from derivatives.
My thinking is that pegging to the price of gold without actually holding gold has the advantage of not incurring the costs of owning actual gold. We just need a relatively reliable peg.
In addition, I think it is unlikely gold could go to $0.00. No amount of manipulation would drop the price to zero, that I could imagine. There would be a massive short squeeze if they tried that.
Although, with hyperinflation, gold could go $1 zillion.
But, so would HBG (Hive Backed Gold) not go to zero, yet "keep up with inflation".
It's not perfect, just good enough. As there are no constants in economics, except the amount of Bitcoin, gold would be close enough to a constant, in my opinion.
Golos had Golos Backed Gold and was a clone of steem very early on.
Unfortunately, one of our bad whales trashed it.
I haven't kept up with developments there since he did that.
Looks like they have shut down.
I wasn't aware. So, then there is precedent.
Oh yeah, lots of folks willing bite that hook.
They said they were paying out if you had enough, I'm not sure it was true.