Why we need decentralized gold pegged crypto rather than USD?

The USD is issued by the US government. While they aim to maintain only a 10-15% inflation rate per year, its is under centralized control. Throughout history, there have been instances of bank crises leading to a sudden devaluation of the USD, and history may repeat itself.

Using the USD as the mainstream cryptocurrency contradicts the ethos of cryptocurrency, as it should be decentralized. Its use needs to be limited and avoided from dominating the market. Furthermore, since the USD is a national currency primarily serving the needs of the United States, it is less likely to effectively meet the diverse economic requirements of international nations. For example, if you belong to some other country and hold USD, the 10% USD inflation will transfer wealth from you to the US. There is no limit to how much the US government can print, and neither one can predict when they will start printing, it can be during a war, during an election, or any other crisis like covid-19.

While the USD may be appropriate for short-term use, like when you want to use the money within a year, gold is perceived as a superior option for long-term savings and is better at providing a hedge against inflation or crypto-speculation.

Though there are few gold backed cryptocurrency

Tether Gold (XAUT)
DigixGlobal (DGX)
PAX Gold (PAXG)
Gold Coin (GLC)
Perth Mint Gold Token (PMGT)
Meld

But they are not fully decentralized like Acala. Gold pegged decentralized stable coin can help to fill the gap.

More discussion here.

Polkadot OpenGov is also trying to use USD to provide funds to developer. We need to rethink about it.

No. We need a new type of unit which is not pegged to any fiat currency or commodity but has a deterministic value related to all currencies in a basket. Not a new idea though.

Many exchanges do have such currencies like Balancer and Uniswap, but none of them are stable. An interesting one is Ampleforth, and its relatively stable.
For a currency to become stable, it needs widespread usage and a substantial market cap. Additionally, many countries use floating pegs to achieve stability with each other for easy trade. Despite Bitcoin having a significant market cap, it is unlikely to become stable due to most coins being held by a few corporations. Furthermore, it relies on ancient technology that is challenging to upgrade and faces issues like centralization with a few mining pools.

It seems, its hard to stabilize with pegging. DAI too uses 60% USDC as collateral. Same problem also arises with gold based stable coins.

May be we need to look at better price discovery in exchanges, that don’t rely solely on demand supply or pump or dump buying.