You can invest into protocols that have a useful product and who’s tokens value is sustained by the success of that product. CRV tokens for example are the governance and reward distribution asset for curve protocol. Their owners may vested escrow stake those tokens to get access to their voting rights and their cut of performance fees from the product. The product itself for Curve is an exchange that allows for high volume swaps between similar assets despite limited liquidity. You can use the curve protocol to move between USDC, USDT, DAI, FRAX, UST, and may other stable coins with very low price impact. (The price per trade is not limited to the 2 asset price curve that is standard for a 2 asset v2 style liquidity pool, hence the name curve) The token distinction of new CRV assets goes to the liquidity providers who supply to the pools that are incentivized to revive CRV rewards. Those incentives are voted on by the vested escrowed stakers. For other tokens out there, having the ability to deepen available liquidity by offering incentives not in your own native token but in CRV through and incentivized gauge while exposing your asset to the deep liquidity of curve is valuable so the CRV token voting rights are worth paying for. On top of all that, all the trading activities on curve generate an income from fees. That income is turned into 3CRV (USDT, USDC, and DAI in a pool) and those 3CRV are then payed to the vested escrowed stakers proportional to their share of the total stake. Like dividends in a share of stock. Not only do tokens have their own products, those products produce revenue and that revenue can be shared with token holders to give the tokens a value beyond speculation on future price. There’s billions of usd worth of liquidity supplied to curve and hundreds of millions in volume generating income for the protocol token owners. CRV is just one example of many DeFi protocols that have tokenomics that capture value for their assets and make holding and participating in these protocols a lucrative proposition.
To be fair, it was more or less possible for Celsius to pay the interest rates they did on stablecoins, taking very low risks. It's just that their profits would be very minimal, and it would barely be worth the effort for them. Even now, it's possible to "safely" get yields of \~10% to 20% on stablecoins, on defi platforms. Your main risk is usually the defi contract getting hacked and drained. The source of your profits, are degens buying the defi platforms' coins, as that's what the interest is paid out in. You don't have to worry about repayment, as you didn't lend out your money. You're just providing a valuable swapping service between USDC <--> USDT for example, and they pay you with the defi platform's coins, that you sell for more stablecoins. The key to stablecoin farming on defi, is: 1. Check what coins are in the LP. Stay away from any stablecoins that are not fully collaterallised. USDC/DAI/USDT are generally safe. MIM/FRAX is a bit riskier, but still okay. Anything else is high risk territory, and demands at least 30% APR. Make sure you do your homework to find out how the $1 peg is held, and what situations could break it. 2. Do not buy the platform's coin. It's a farm coin, so traeat it like one. Sell the ones you farm as soon as gas fees makes sense to do so. The ponzi in this case, is the platform coin itself. The people buying the coins are the suckers. They pay everyone else's profits. Do not be the sucker. It's only in very rare cases that a farm coin actually solidifies and goes up in value. 3. If the platform is new and unproven, chances of a rug is high. You put your stablecoins in, and a "hacker", who is secretly a team member, drains all the funds in the contract a few days later. Do your research.
I haven't researched FRAX that much, so can't say much about them. What I have done is change my investment strategy of setting aside my rewards into hard-cash-backed stablecoins. Still not 100% downturn safeguard, but I'm staying away from algo stablecoins. Learned my lesson with UST. Best safeguard would always be to sell to fiat, but then that makes you put your money back into a centralized company. I'm not against CEXs. I send my fiat from my bank, or Paypal, to Coinbase, or FTX, or Binance. Buy coins, then transfer them to my self-custody wallets. ​ I keep stablecoins to make it easier, and faster to buy additional coins when a large dip happens.
FRAX and new stables/stable experiments Digital ID's and Jack Dorsey's web 5, more stuff built on bitcoin Everyone is saying interoperability - cosmos and polkadot will go to war for market dominance Solana comeback - Solana phones and then hilarious and unforseen issues with said phones New wave of meme coins and comebacks for old ones - more people will tell me they won't invest in crypto because Elon Musk controls the price Sports and gaming NFTs - Chiliz and Enjin etc
Yes, exactly. If you're in the crypto space, it's risk management chops you need to develop. All stablecoins have risks, and if you have the need to store fiat pegged value in crypto, you need to understand attributes of the options and the risks. And ofc, you don't need to store all in one coin. You can spread your risk (but ofc be weary of contagion risk and dependencies i.e. DAI is largely backed with USDC as is FRAX)
tldr; Harmony's Horizon bridge was exploited last week for $100 million in various tokens including FRAX, FXS, wETH, wBTC, AAVE, SUSHI, USDT, and BUSD. The attacker is sending 100 ETH to Tornado Cash every six minutes. The hacker has already mixed more than $12 million through the privacy-enabling protocol. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
LUNA / UST seemed like a an obvious ponzi to me, I'm not sure how do many people invested in it. A stable coin backed by... Their governance token?? That's s no from me. There are some actually cool projects like FRAX, MAI and RAI that are actually innovative and cosñterkzed - in the case of RAI it is backed only by ETH and is not legged to the dollar, but made to be a decentralized stablecoin that does not need to rely on a third party holding cash in a bank.
Are you actually interested in going through the redemption process or do you just have a bunch of stables you wanna go to USD asap on? 1. Tether doesn't redeem for small scale clients as far as I'm aware, they're main issuers are Bitfinex and FTX who then disseminate it through the rest of the market. I think they've got like a 100k minimum for redemption and potentially KYC so only whales/exchanges actually go through the process. 2. Any exchange with a direct Circle hookup should be able to do it, CB is probably best as they're pretty well connected to each other. 3. BUSD is Binance's backed coin. I've gotta imagine either Binance or Binance US can do a direct cashout if you want. Other stables are often connected to exchanges/centralized entities (USDP, GUSD) who should be legally liable to country compatible residents to redeem, DeFi projects with smart contract redemption to unlock collateral (FRAX, FEI, DAI, MIM), or are non-fiat based wrappers like BitGo for WBTC.
In case of LUNA, it wasn't obvious. Anchor was generating revenue (around 3%-6%), and the 20% rewards were made to look like VC-funded incentives for early adopters. There were plans to reduce the yield over time and make it sustainable. They were also buying "reserves" to back up the peg in case of a depeg event (why those reserves were in volatile assets rather than USD was def a red flag). UST had become the third largest stable, and there were ~$40B in the ecosystem, which made it seem like it was trustworthy and too big to fail. Big names like Novogratz and CZ were invested in it. Expectation was that during a bear market, more people would go into stables (UST) and stake for 20% returns. (a bank run happened instead) Other algo stables like IRON and FRAX had survived depeg events, and UST had also survived the May 2021 crash and the Wonderland fiasco. UST being much bigger felt like it could survive further crashes too.
The problem with DAI is that it's collateralized with USDC and ETH. Using USDC as collateral defeats the entire purpose and crypto collateralized stables simply aren't a great idea. It's quite easy to imagine a scenario where DAI's collateral becomes worth a fraction of the DAI in circulation. Even a 10x collateralization rate really isn't safe enough for hundreds of billions and eventually trillions of dollars. Any crypto price can collapse temporarily. It's smarter to rely on a market mechanic and focus on preventing bank runs from ever starting than to use collateral. And Luna was not the same problem as Titan at all (which was a FRAX fork that suspiciously had vulnerabilities that FRAX didn't). In fact, Luna's collapse was partially caused by its module burn limit.
You are clearly brain dead. I never claimed to be a “specialist” - you pulled it out of your ass. I knew about UST and its pegging mechanism and had a look at other smaller algo stables like IRON and FRAX that had survived major depegging events. UST being much bigger seemed to be more secure. That, and all the othere reserves they were building. I knew the risk and put only my profits there. Feels bad to have lost money, and I’m back to being super risk-averse at the moment, but I’m still in the green since I got into crypto last year. You should take your head out of your ass and smell the fresh air and look around for some time.
tldr; Frax Finance is an on-chain protocol that mints and manages the FRAX stablecoin. Found in the sweet spot between fully-collateralized and uncollateralized stablecoins, it is the first decentralized stablecoin that utilizes a dynamically adjusting collateral ratio to successfully maintain peg stability. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
>Confidently wrong - that’s what you are. Ok. I've got few words describing what you are but I'll keep it to myself. >UST was NOT a collateralized coin, it was an algorithmic coin. LUNA was NOT used as a collateral for it, but burned or minted to keep the peg. UST and luna were just good example i provided so maybe even most stubborn mined could grasp the idea of what us wrong with calling something backed when it isn't. Collateralized is not backed either due to natural volatility of the asset and general definition. >Algo stables are known to have a death spiral vulnerability. IRON and FRAX and DEI are other examples of algo stables. >DAI and MIM are examples of overcollateralized stables. Nicely unnecessary lecture but at least you make an effort. >USDC and BUSD are collateralized stables with collateral being actual dollars. Not fully, not proven and that makes it unbacked. >Go read a bit before you go around acting like a smartass. I'm much smarter than you. Go buy some Luna.
Confidently wrong - that’s what you are. UST was NOT a collateralized coin, it was an algorithmic coin. LUNA was NOT used as a collateral for it, but burned or minted to keep rhe peg. Algo stables are known to have a death spiral vulnerability. IRON and FRAX and DEI are other examples of algo stables. DAI and MIM are examples of overcollateralized stables. USDC and BUSD are collateralized stables with collateral being actual dollars. Go read a bit before you ho around acting like a smartass.
Honestly it’s weird that UST crashed so hard. I looked at other algo stables before putting money in UST. Mach smaller coins like FRAX and IRON survived catastrophic depeg events. UST was much higher market cap - #3 stablecoin! It was blessed by the likes of CZ and Novogratz. It had a great ecosystem with Mirror Protocol, Spectrum Protocol, Aperture Finance, White Whale, etc. They were collecting other reserves to back it up - mostly BTC. It still blows my mind that it’s still so badly depegged.
I have put all my UST holdings in my Terra Wallet. That makes me eligible for the airdrop, right? Still hoping I can salvage some value from my “stables”. 😫 Lower marketcap algo stables like FRAX and IRON regained peg over time, but UST looks like shit despite backing by large VCs and people like CZ and Novogratz.
I had pulled all of my money from Anchor after the wonderland debacle. Was staking a lot of my stables on Binance - mostly BUSD - for a good 10%, and the rest in DeFi pools. Then Binance launched UST staking for > 20%, and greed took over. 🤦 Honestly, I had seen smaller marketcap algo stables like FRAX and IRON regain peg so I thought UST with a multi billion MC and billion dollar investments by Mike Novogratz and CZ would make it more stable. Fuck me for thinking that. 😭
Pure algo stable will never work I feel. It is too juicy a target for shorting and attacks from massive hedge funds. Someone made billions from the UST/LUNA collapse. FRAX is mostly collateralized with diverse dividend earning collateral. It’s close to a regular bank.
Temporary 20% isn't that unusual and was never believed by anyone with a right mind to be sustainable. Defi protocols offer increased rewards all the time to steal liquidity from other protocols or to entice new users hoping the capital will stick after the rewards go back to normal/sustainable levels. That being said it wasn't 20% return that crashed Luna, the fundamental relationship between UST-LUNA did. Same thing could have happened with 2% returns. I'm kinda surprised nobody is talking about FRAX, as it has the same mechanic. It's partially backed so it can't go to like LUNA did but still has a depeg risk.
For some quantities that type of loss is worth it IMO Better to have 90% losses and walk away with 10% of a significant amount then total loss. Anything under 1-10$ I’ve let ride not worth salvaging for the risk reward but for example I was in a 4 stable pool on Osmosis (USDT:USDC:FRAX:UST) and I had about 50% left. I was grateful to unbond and wish I had the clear mind to realize I should have unbonded immediately not later.
Some smol facts to help you: * FXS is required to mint FRAX * FXS is used for governance * FRAX is a mix of algorithmic and collateralized stables * Governance is limited, taking a hint from Bitcoin This is my surface level understanding. Algostables spook me (Titan and Terra), but I don't fully understand seigniorage yet. It feels like this is the next evolution of decentralized stables and the peoples I've seen talking about it are ones I consider intelligent.
I need to study Avalanche a bit more IMO. It seems like a solid project but after the Terra collapse I am afraid of even studying stuff lmao. I mean, knowledge doesn't hurt me, but maybe ignorance here could save me. I would also need to study a bit of Near Protocol and FRAX.
Hey! If you're looking for a really good in-depth explanation, check out the Bankless Podcast where they interview Sam Kazemian (Founder of FRAX, an algorithmic stablecoin). [https://youtu.be/w5\_91cCWFEQ?t=828](https://podcasts.apple.com/us/podcast/frax-the-4pool-curve-takeover-sam-kazemian/id1499409058?i=1000557458970) He goes into a narrative about how Central Banks regulate their own currency, and how Stablecoins try to do the same in the Crypto landscape. Def worth listening to the whole podcast!
FTX gotta list me some more stablecoins... like TUSD and USDP but I doubt it. USDC would be great but I think, like for BUSD and GUSD, they don't because of rivarly with Coinbase, Binance, Gemini. FRAX would be great.
luna truly gave a big lesson tho. stablecoins MUST be collateralized. let's take out the centralized ones DAI is fully collateralized by ETH, almost as twice. this is great! FRAX is like 80% collateralized with USDC then it's still collateralized with FXS which isn't like LUNA because it's actually backed, not the 1:1 bs. Then, my favourite one, CELO. CELO is collateralized 3.5 times the value of their stablecoins. To do so they use a "basket of assets", which is a reseve. Instead of LFG, they have a site dedicated with all the different addresses listed and you can check on your own. The basket is 50% CELO, 30% BTC 15% ETH 5% DAI
The failure of Terra hurts the entire cryptocurrency space It's extremely sad that Terra might fail, likely due to a targeted attack, and so many people in the crypto space are happy seeing its demise. The goal of Terra is to build a "price-stable cryptocurrency that combines the best of both fiat and Bitcoin", which is probably **the best use case for a cryptocurrency**. The future is better if people have a stable, decentralized medium of exchange that can be transacted with freely and at a fraction of the fees charged by other payment methods. The project being labeled as a "Ponzi scheme" is unwarranted. Terra currently has flaws (obviously), but it's a work-in-progress that had the potential to help revolutionize money and finance. From an investment perspective, LUNA/UST were known to be high-risk relative to other coins due to the possibility of a death spiral. It didn't make sense as an investment for everyone. From a big picture perspective, I don't think people appreciate what Terra aimed to accomplish or understand the effects of its failure. Many people have lost trust in algorithmic stablecoins (FRAX/FXS plummeting as well) and some people will lose trust in cryptocurrencies entirely as a result of this event.
If anything, that's why we need an algorithmic stablecoin similar to UST even more. Sure, UST has its flaws, but honestly, how do you actually create a fully decentralized stablecoin that fundamentally works? UST is the closest we've gotten. FRAX might be the best implementation now, but only time will tell. Centralized stablecoins like USDC and USDT have this risk present because what if they're not actually backed by anything? Decentralized stablecoins theoretically solve that risk, but they introduce other market mechanics to make themselves work. The exploitation of those mechanics is what made this attack happen. Eventually we'll figure out a way to develop safe stable asset, but there will be problems as we move along.
That article is incorrect; describing DAI as algorithmic is highly misleading. It isn't based on burning one asset and minting another like most algostables (FRAX, UST) , it's based on collateralized debt positions. https://101blockchains.com/algorithmic-stablecoins/
UST *was* partially backed, but now that they've deployed basically all their reserves to defend the peg it's even more vulnerable than it was before. Picking some up at $.6 to dump at $.9 is a great trade but I wouldn't trust UST with my pocket change at this point. It's a fundamentally flawed design and it's just as centralized as USDC or USDT with how it relies on Jump Capital to support its price. Hopefully the crypto industry learns from this and stays away from pure algostables in the future. FRAX is as far as I would go down this road, and at least they've built some USDC backing into the protocol.
>Algorithmic stablecoins such as UST, FRAX or USDN are collateralized by a secondary token often called seigniorage coins (LUNA, FXS, WAVES correspondingly). So it happens by a rug pull, exploit, or hack of the secondary token. >A tweet started to circulate in social media accusing the Waves team of using Vires to inflate its numbers by lending USDN, borrowing USDC, transferring to an exchange to buy WAVES and increase its price, and exchange WAVES for USDN when needed. This would keep the price of WAVES increasing and would inflate the supply of USDN via their native redemption mechanism. The news flew fast and many holders of USDN started to swap it for other assets: this flood of USDN supply in the market caused its price to fall until $0.73:
> Volume is an insignificant metric here. Maybe I've got a bit of a knowledge gap here then. My thinking is that if $46 billion in BTC changes hands daily then the repercussions of even $10 billion in BTC going to UST collapse victims wouldn't be too catastrophic? On the other hand FRAX has a total marketcap of [about $2.6 billion](https://coinmarketcap.com/currencies/frax/), of which [almost half](https://curve.fi/4pool) is tied up with UST in the 4-Pool. Which is why my concerns for risk contagion were focused there. Very happy to hear a different take on it though, and I don't know how the amount of bitcoin held in this system compares to the total on orderbooks so your insight would be much appreciated!
Thoughts on FRAX and FXS? Assuming Ethereum continues to dominate, won't people want a decentralized semi-algorithmic stable that's native to Ethereum (as opposed to UST)? Or is everyone content with USDT/USDC, and algostables are sooo last year?
its basically satire in how he oversimplified a edgecase of defi lets take curve as the biggest dex and the stablecoin war between dai and ust as an example: the crv governance token doesnt have value because curve has 19.6 billion dollar in its "box", but because you can influence how the yield of these 19.6 billion gets split between the individual pools. lets check out how thats actually used: the biggest stablecoin pool is the curve 3pool consisting of the 3 stablecoins USDC, USDT and **DAI**. UST is of course not very happy with that as its left out. so they cook up a plan to dethrone 3pool with their new 4pool consisting of the 4 stablecoins USDT, USDC, **UST** and FRAX. But in order to get people to withdraw their liquidity from 3pool and instead deposit in into 4pool they need higher incentives, so they need to gain governance majority, so they need to buy a lot of crv
DOTSAMA ecosystem. Because compared to Cosmos it has interesting tokenomics with auctions and parachains. It keeps ecosystem together and allows projects to benefit from each other. Having a canary ecosystem with real value is game-changing because now parachains canary projects don't have VC's in their token distribution. XCM makes you bridge-free, no more worhole hacks. Curve. Because of stable asset LP's. Their voting and emissions system is revolutionary for defi, everyone is copying it. ​ Balancer with weighted pools and adjustable fees. Could be used in multiple ways. ​ FRAX with their approach to stable coin and FPI.
tldr; Do Kwon and Sam Kazemian have announced the creation of a 4Pool on Curve, comprising of USDT, USDC, UST, and FRAX. A large 4Pool will help UST maintain its peg, which will allow whales to swap UST without slippage. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
>“The biggest battle in crypto this year will likely be in the stablecoin arena. The winners from the stablecoin wars will be ones that have the best stability mechanisms as well as pay out the highest interest rate/yield,” Sam Kazemian, founder of Frax Finance behind stablecoin FRAX, told Motherboard. > >Terraform Labs is the firm behind the Terra blockchain and its native stablecoin UST (not to be confused with USDT, or Tether, a separate stablecoin). As part of the plan to kill off DAI, Kwon wants to make UST the new king of the stablecoins. It’s a plausible scenario, since he and his allies hold a significant amount of tokens with which to pay off users in Curve, a DeFi protocol that largely determines the fate of stablecoins due to its prominence in the ecosystem. In a move reminiscent of hostile takeovers in the corporate world, they plan to aggressively wage a battle in what crypto people call the “Curve Wars.”
Your Daily Dose of Crypto • Bitcoin dominance: 41.76% (+0.20%) • Cryptocurrency market cap: 1.799 Trillion Dollars (-6.40%) • BTC average transaction fee: $1.559 ( +15.99%) • ETH average gas Price: 49.65 Gwei (+3.85 %) • Fortnite creator Epic Games has raised $2 billion from Sony and LEGO parent KIRKBI, at a $31.5 billion valuation. Epic has ambitions to build the metaverse, but it’s unclear whether blockchain, NFTs, and crypto will play a role in its plans. • The Ethereum Foundation got a step closer to deploying Ethereum 2.0 and has been using “shadow forks” to make its testnet more closely resemble the Ethereum mainnet. • A new Nasdaq survey of financial advisors found that 72% would be more likely to invest client assets in cryptocurrencies if they had access to a spot ETF product. • The largest United States-based crypto exchange Coinbase has stopped payment services through United Payments Interface (UPI) on its platform for Indian users just three days after its launch in the South Asian subcontinent. • British Virgin Islands-based IDEG Asset Management (IDEG) unveiled its Ethereum Enhanced Portfolio, an actively managed fund tracking the price of ether (ETH) while using, it said, a futures arbitrage strategy to enhance returns and flatten volatility. • Coinbase is developing a three-part series of animated shorts based on the Bored Ape Yacht Club NFT project. • Terra introduced something called the “4pool” in what appears to be a clear move to make UST and another fast-growing algorithmic stablecoin called FRAX the leading players in this niche. • Crypto funds last week suffered their largest outflow since January as investors withdrew money from bitcoin and Ethereum funds, CoinShares reported on Monday. • Shrapnel, a futuristic shoot-'em-up game built on the Avalanche blockchain, has completed a $7 million token sale that included participation from Dragonfly and Three Arrows Capital
The BTC is an other supportive guarantee for you and the peg of UST. You are always able to trade $0.999 Bitcoin againt your $1 UST no matter the current price of Bitcoin OR(!!!) Luna. Minting Luna againt UST is already the main idea and process to keep the peg. In the future you will also be able to trade AVAX against your UST. All of this gives more legitimisation to the Terra project. The next phase would be to create a Curve pool with other stables like USDC, FRAX and USDT maybe MIM. The result would be to mute of the volatility of the peg. And could truely create the best algorithmical stablecoin.
tldr; Terra has launched a new stablecoin pool called “4pool” to compete with USDC, FRAX, USDT, and USDC in the “Curve Wars.” The prize for the deepest liquidity is, of course, token rewards, which are dolled out in the form of Curve’s native governance token, CRV. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
> because there is (theoretically) real fiat currency being held in a bank account to back it up Not necessarily. - 1st gen stablecoins = unregulated, backed up by fiat in a bank account (USDT) - 2nd gen stablecoins = regulated, backed up by fiat in a bank account (USDC, BUSD) - 3rd gen stablecoins = automatic, backed by on-chain assets (DAI, MIM) - 4th gen stablecoins = algorithhmic, pegged by a mint/burn/tax mechanism (UST, FRAX)
The actual mechanic in this case is buying UST sub $1 and using it to mint $1 of Luna. You could then theoretically sell this Luna for another pegged stable to cash in the profit, or if you're a big believer in Luna you just caught some at a nice discount. This would drive UST back up towards $1 Luna pays a non-inflationary staking yield that moves inverse to it's price, so it gets more attractive to hold the lower the price is. Plus it's the native currency of it's own sovereign chain, it has demand drivers and value captures that others like Titan did not have. With the BTC reserve it's positioning itself to be very FRAX like, the difference being the BTC isn't explicitly collateral. It's a foreign currency reserve, just like how other nations hold USD and Treasuries to prop up faith in their currency Luna is taking a similar step. I'd like to see them adopt some ETH as a reserve currency too.
I disagree, I think the Curve wars are only just beginning. 4Pool commands a significant portion of Convex voting power, but it's far from having a majority. In fact I think Tetranode alone controls about as much Convex voting power as the Terra coalition. https://avgjoescrypto.substack.com/p/the-curve-wars-go-hot?r=r78rm&s=w&utm_campaign=post&utm_medium=web&utm_source=direct The real question right now is what will Maker do now that war has been openly declared against them? They command a massive treasury which could be used to accrue CVX voting power, but the Maker governance DAO is notorious for being fairly dysfunctional. There's also not a ton of CVX left on the open market for them to acquire. The 3Pool isn't necessarily required for DAI to hold its peg (the PSM takes care of that) but it is a major source of stablecoin adoption. If yields on DAI begin to fall I could definitely see a scenario where it starts to lose integrations in DeFi to the FRAX/UST alliance. It wouldn't be a spectacular death like the de-pegging of Iron Finance, but a slow death by a thousand cuts. On the other hand, Anchor's subsidized ~20% yield is also the largest source of demand for UST. If that yield begins to fall it could have an adverse effect on the Terra/Luna ecosystem, but Do Kwon has deep pockets and all the incentive in the world to keep that yield high. Time will tell!
Very clickbaity title. A (kinda) negative news is being spun into positive news. First of all, collateralized stablecoins already exist and are backed by different digital assets, examples DAI, FRAX, MIM, etc. Secondly, UST was supposed to be an algorithmic stablecoin whose price is stablized by the UST/LUNA burn/mint mechanism that turns out to have a design flaw that can lead to a "death spiral" and cause UST to de-peg significantly. Which is why Terra labs is buying up BTC as a backup plan in the ddeath spiral scenario, but have yet to announce how the backing mechanism will actually work.
I think other than FRAX all algo stablecoin have failed somehow. UST is a time ticking ponzi. How long can do kwong keep backing it up with money after all? but i love these ponzis haha for flipping like tomb forks. But i would rather be in usdc or dai for long term. hell i wont even mind being in my long term picks like gth dafi ftm for long term of periods and then just taking profits in btc
> by the time you get your LUNA to the next swap, it is no longer worth a whole dollar I agree that arbitrage is a lucrative market, but i don't believe in the efficient market hypothesis. Other algorithmic stablecoins like FRAX and Iron Finance have faced this issue before. after the wonderland fiasco, UST was wobbly for a few days and i genuinely panicked.
tldr; Solidly and Solidex are currently both currently emitting tokens at a high rate, but the rate of emissions will steadily decrease over the coming weeks. As emissions decrease, so does the yield on stablecoin liquidity pools on Solidly. If you provide liquidity to these pools with your USDC, MIM, or FRAX, you can currently expect to yield good APRs through the use of another protocol. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
Consensus says that USDC and GUSD are the best backed stable coins. DAI is the safest partially backed stable coin. There aren’t any safe algorithmic stable coins but there’s definitely some super interesting ones like FRAX. Honestly I’m not sure about BUSD.
tldr; Matter Labs announced that zkSync 2.0, the team's EVM-compatible ZK rollup, has launched on testnet. The Dfinity Foundation shared details about a trustless Bitcoin integration that implements Chain Key cryptography to establish a direct interface with the Bitcoin ledger. The Redacted Cartel DAO has introduced a proposal to approve a $5M FRAX credit line via Debt DAO in the form of a 6 month loan. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
See there are multiple types of stablecoin but let me break it down easy way 1. Fiat backed - backed by 1:1 ratio of USDAO dollar - USDT , USDC 2. Asset(Gold,Land)/crypto backed : exact asset value worth - DAI, USDAO 3. Algorithmic stablecoin - stability maintened by implementing buy and sell pressure in accordance to the market FRAX Now coming to choosing you should choose the most liquid one. Which are widely used like USDT and USDC but there also not transparent and the audit reports are a joke Coming to second category : they backed 1:1 Collateralization but there are differences in it too DAI has 150% Collateralization ratio that means for $150 Eth you will get $100 worth DAI Where USDAO stablecoin provides 1:1 Collateralization, which means for $ 100 worth of Eth you will get $100 worth USDAO.so no extra payment. The thrid category algorithmic stablecoin are shit as per my person view I have just touched the barrier of stablecoins topic in this Learn more independent using the above information. Cheers!
Use FRAX. It’s fractionally backed and has a long track record of holding its peg. It adjusts what % backed it is based on what the market and has FXS as a seigniorage token. Deep liquidity means it will continue to keep its peg. Also it’s decentralized and actively moving away from USDC. There’s ~2.5 billion in circulation so it’s not just an up and coming stable.
why not go all the way and convert to stablecoins? one of my hedges is [hundred.finance](https://hundred.finance).. its one of those ve tokens that allows me to get huge APR on FRAX over on Arbitrum. its not perfect, but its a good hedge.
>I used this list > >https://coinmarketcap.com/view/stablecoin/ This list does include FRAX, but it misses MIM. No list can be perfect (; >Any ideas where can I get a full list of stable coins? Sorry, no... In some cases you just have to know, especially in cases where the name has nothing to do with US(D), just like FRAX and MIM. The first one may not be so popular, but MIM is actually well known in the DeFi-degen circles (;
Best investments from this list would then be: * MIM (Magic Internet Money) and FRAX, USD-pegged stablecoins which should reach 130$ or 290$ * Lido staked ETH, basically a wrapped ETH, which should cost about 200k$ * Wrapped Bitcoin, soon raching 3M$ * Huobi BTC, a wrapped BTC, reaching 20M$ At least OP removed USDT, USDC, BUSD, UST and DAI from the list (; However the list doesn't include another potential 100x coin, which is WETH - if it's market cap would reach that of ETH, then it would cost around 270k$ (2.7k$ today) !
Moving from USDT to another centralized stable like USDC or BUSD don’t help anyone. UST, MIM, FRAX, SUSD, RAI, DOLA…there are so many good decentralized stables now. USDC is the same custodial garbage.
> Sole individuals have pressured the three big pools in Ethereum to block certain wallets (by not processing transactions from them). Do you have a citation for this? I can't find any information about this happening. This doesn't strike me as a particularly effective way to censor someone considering how many different pools have successfully mined blocks just within the last hour. At worst you'd have to wait a few extra minutes to have your TX confirmed. And yes, if you use centralized stables you're subject to the whims of the issuing entity. DAI isn't restricted this way, and neither are the other DAO stables like FRAX, FEI, or LUSD.
Yeah, I HATE Tether and I can easily tell you that most of the cryptocurrency community does too, really. It's always the argument brought up to speak trash about cryptocurrencies but the ones that are into it are more against that ones that don't like cryptocurrencies. Tether is exactly what a cryptocurrency shouldn't be. It's the opposite. I try to use it as less as I can as many try to. Also, I'm into stablecoins a lot as I think they are the most value assets in this crypto universe and are the asset that can bring people into it. I love algorithmic stablecoins like UST, FRAX, DAI wait more than Tether, really.
Some things I can at least say I'm optimistic about: * Major algo-stablecoins like FRAX and UST have held their peg just as well as other stables. I'm not going to say these things are now both bullet-proof, but it is another major stress-test that both have successfully survived. * Most of the major DeFi protocols themselves have remained resilient, despite huge volatile swings and in some cases, the underlying blockchain crawling to a slow due to network congestion.
Fiat-backed: USDC by Circle, USDP&BUSD by Paxos Algorithmic: UST by Terra, cUSD by Celo, sUSD by Synthetix Algorithmic&Collateralized: FRAX by Frax Collateralized: DAI by Maker, LUSD by Liquity Unpegged: RAI by Reflexer If you want a stablecoin that actually backed by real US dollar, go with USDC/USDP/BUSD. If you want the decentralized one, go with Algorithmic and/or Collateralized stablecoins. If you want a non-pegged-to-fiat stablecoin, go with RAI The risk of centralized fiat-backed stablecoin is censorship. The risk of algorithmic and collateralized stablecoin is volatility. I'm not sure about the risk of RAI, still learning
Hi! Old post, but if ur still interested, FRAX and Chainlink just announced they're working on this for FPI, and it will be based hopefully on a more accurate and decentralised metric than the USGov's CPI as well. Read this article for more info. [https://fraxfinancecommunity.medium.com/frax-finance-using-chainlink-to-bring-u-s-cpi-data-on-chain-in-support-of-the-frax-price-index-737ea893ab73](https://fraxfinancecommunity.medium.com/frax-finance-using-chainlink-to-bring-u-s-cpi-data-on-chain-in-support-of-the-frax-price-index-737ea893ab73)
tldr; Stablecoins have emerged as a part of the cryptocurrency ecosystem over the past couple of years. Traders’ pivot towards decentralized stablecoins will be famous by the rising market capitalizations and the variety of DeFi platforms integrating TerraUSD (UST), FRAX (FRAX) and Magic Web Cash (MIM). *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*