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Eight of the top 10 stablecoins by market cap lost their $1 peg today, with Tether and Binance USD being the only two that held their peg during this turmoil
It's not FUD anymore, USDC has depegged. DAI & some other decentralised stables have also depegged. Get your money out of stables.
Historic Stablecoin Summit - 7 Stablecoins, One Panel (SILK, IST, FRAX, DAI, USK, CMST, NUON)
Stablecoin choice in case of USDT collapse
[Stablecoins] Get up to 346% APR on stablecoins on Moonbeam
I Read Through the National Institute of Standards and Technology (NIST) Report IR 8408: Understanding Stablecoin Technology and Related Security Considerations Report for You
Coincidence? Did AVAX have anything to do with the Terra LUNA/UST crash (such as using billions of dollars in liquidity available to them to short the coin from the AVAX token offering?)
What is FRAX? Frax Finance explained
MoneySwitch Protocol | Launching soon | Earn yield by lending Stablecoins to Cross Border Payment Providers | Cross Border Finance | International remittances | DeFi
MoneySwitch raises 1 Million USD from FRAX, Decentralized, PIF Labs and DeeMoney
Something new can always be born after the death of the Terra-Luna
The failure of Terra hurts the entire cryptocurrency space
The Curve Wars are over. What happens now?
DeFi Insight |How to Print Money with FRAX ; Luna Foundation Guard raises $1 billion to form…
DeFi Insight |Frax Finance will provide 2 million FRAX to provide liquidity on Sifchain
VIDEO: New innovation in the stablecoin space? Algorithmic peg to 1 gram silver and earns interest while in circulation. Inspired by LUNA and FRAX with more features added.
Hector DAO - Ohm Spoon, not Fork - AMA about 2022 Master Plan Live on Youtube at 20.00 UTC - Combining Utility with Rebasing + a $100,000,000 Treasury - Bullish 🚀
Understanding Stablecoins Farming and Vote Bribing
Mentions
It did dip a little bit. Not even USDC, but DAI, FRAX, Gemini Dollar, USDD, FRAX and even BUSD deviated a little.
The % backing by USDC is pretty significant considering FRAX is also backed by USDC (lol)
USD Digital (USDD), a stablecoin issued by Tron, and fractional-algorithmic stablecoin Frax (FRAX) shared a similar fate due to adverse market sentiments. USDD responded to the USDC sell-off with a nearly 7.5% drop to trade at $0.925, while FRAX dipped even further to $0.885
Curve supports liquidity pools for major stablecoins, such as USDC, Tether (USDT), Frax (FRAX), Dai (DAI) and TrueUSD (TUSD). Fear, doubt, and uncertainty have spread across crypto markets during the last few hours, resulting in unbalanced pools in the DeFi platform due to a sell-off of USDC, leading the major stablecoin price to fall below its $1 peg
No reason aside from panic. Only USDT is holding to $1. All the other stables are currently off their pegs. BUSD is only mildly impacted - about 0.5% right now. DAI, GUSD, USDP, FRAX and TUSD are all worse. Some of this is due to being partially backed by USDC (DAI) and the rest due to general fear of the stability of banking partners for stablecoin reserves.
Contagion: >USDC: 0.91 >DAI: 0.93 >BUSD: 0.995 >FRAX: 0.92 >USDP: 0.96 >USDD: 0.94 >TUSD: 0.992 >GUSD: 0.96 Only TETHER left standing....
I mean, If you really want to buy here, I would rather buy GUSD or USDP here. They are much safer than USDC. Also, why is FRAX down?
why the hell is FRAX depegging?
Looks like DAI, FRAX, Pax Dollar, USDD, Gemini Dollar and many more are also feeling the run.
Hey there, it’s me from the future! USDC is currently trading at .88, Dai at .90, FRAX .89, LUSD .94, USDP .97, USDD .93, MIM .88, sUSD .96 & MAI .91 It’s not fine. The largest stables have all depegged except Tether.
This stable coin depeg is spreading like wildfire. (USDD, USDP, FRAX, DAI, USDC) Did I forget any?
100% of my stablecoin deposits are in USDC, thinking of splitting into USDT/BUSD/FRAX/SUSD/USDC/DAI
No, it didn't. u/AESTHTK posted disinformation articles about DJED before, was corrected, and continues to spread disinformation (I guess that's crypto-cult mentality for you lol). How all overcollateralized stablecoins (DAI, FRAX, MIM, DJED, etc) work is that they can't truly depeg unless the reserve ratio is under 100%. Look at other stablecoins which fluctuated in the past (esp. early on in their life). Want to know why they never stayed "depegged"? It was because they were all overcollateralized.
Being overcollateralized by over 500% sounds pretty stable to me. It being backed by crypto doesn't change that. Other crypto-backed stablecoins have fluctuated in the past (DAI, FRAX, MIM, LUSD, sUSD) and have still maintained their peg. You know why? Because they are all overcollateralized.
90% - the SEC will unleash its biggest to-date war on crypto, labeling every crypto a security apart from BTC. People will revolut against CBDCs being shoved down their throats and go for algorithmic stables like $FRAX. Dexes will be the new de-facto exchanges and govs will have a much harder time banning crypto as effectively as they used to. 50% - Ethereum will overpower bitcoin and become the dominant cryptocurreny over the evm-chain coins and tokens( AVAX, Matic, Arbi , OP, LRC and their tokens). All other cryptos will still follow btc movements though. 10% - I will breakeven from my 2021 losses
tldr; The DeFi stablecoin protocol's DAO, Frax Finance, has voted to fully collateralize the native FRAX stablecoin, a step towards retiring the algorithmic backing of the protocol. The proposal was presented to the community by DAO admin Hameed about nine days ago. The DAO will gradually remove the algorithm while increasing the target collateral ratio to 100%. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR. Get more of today's trending news [here](https://coinfeeds.substack.com).*
I have not kept up closely with Frax. Does it mean the OG FRAX basically becomes wrapped USDC? Is it being retired?
tldr; The community of decentralized finance stablecoin protocol Frax Finance has voted to fully collateralize its native stablecoin Frax (FRAX). The move marks an end to the algorithmic backing of the protocol. FRAX is the industry’s fifth-largest stablecoin with a market capitalization of over $1 billion. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR. Get more of today's trending news [here](https://coinfeeds.substack.com).*
>That's not true at all. The reserve ratio influences the market value, but ultimately the market value is what it's worth, so it actually means everything. As I said, the market value comes from its price from exchanges, and these exchanges have low liquidity due to DJED not even being a month old and only having ~3 million in circulation. On an exchange, it can be less or more than one dollar, but if you redeem your DJED for ADA directly, you will get the dollar equivalent in ADA, minus fees of course. So what I said is true. If DJED on an exchange is worth less or more than a dollar, you can burn in through the smart contract. Market value is just through exchanges, while the reserves ratio shows how much the stablecoin is backed. Every stablecoin with backing has gone through massive price swings, but if you can redeem your stablecoin for dollars (or dollar value of cryptocurrencies), then it's not really depegged, since you can get your money back 1:1. >100% objectively it is depegged as long as the market value does not equal the targetted value. You can get the target value for redeeming directly. If the stablecoin price on an exchange is not $1, then just redeem it directly to get $1. This has been the case for *every* collateralized stablecoin, especially early on in their history; look at DAI, LUSD, sUSD, FRAX, and MIM for some examples of overcollateralized stablecoins fluctuating but still being just fine. As I said, market value doesn't mean anything compared to reserve ratio, and this is because reserve ratio shows how truly backed and redeemable the stablecoin is. >DJED isn't really in trouble, but then again it hasn't been battle-tested, but your reasoning is way off base. I know DJED hasn't been battle-tested, but that's a different discussion. "My reasoning" is just researching how other stablecoins were in the past, and it is pretty clear the reserve ratio is the only important thing because it's how you are able to get back the dollar (or dollar equivalent) money from the reserves.
I think it's possible FRAX will be king sometime soon. It's one of the only stablecoins that I think can survive basically any regulation. And won't collapse. I thought about investing in it previously but it's looking like a much better bet now.
What do you think about $FRAX stablecoin though? It isn't that popular + algorithmic, but might be a good temporary solution..
Apart from Uniswap, I have never heard about the other projects you mentioned. So far we have seen AI narrative, liquid staking derivative, and recently Layer 2. These and other narratives are going to influence the best bull run. For AI, I'm keeping an eye on FET and OCEAN. Liquid staking derivative - FRAX and LIDO. Layer 2s - MATIC and CTSI are my picks.
The core of this rugpull waiting to happen is the FRAX/USDT LP that has 24% APY and the reward is in SDL. Every other token there is a way to hide this. This is an exit strategy for FRAX token holders that want USDC. You WILL lose all your money. Dont promote that shitcoin.
From your DJED link: >This is unlike a typical algorithmic stablecoin that uses endogenous collateral, such as: FRAX FRAX is 92% collateral, 8% algorithmic. From that 92% collateral, +60% comes from the FRAX base pool on Curve, so FRAX, DAI, USDC and USDT. I wouldn't precisely call that "endogenous" at all lmao.
You've never heard of DAI & FRAX? Seriously?
>Because blacklisting is the only think that matters It's not the only thing that matters, but it is a big deal. Most of Ethereum's DeFi uses centralized tokens, and these tokens are centralized because of customizability. Even "decentralized" stablecoins like DAI and FRAX are backed by centralized stablecoins. >Minswap and muesliswap are centralized "DEXs" Not sure why you're resulting to whataboutism, but yes, those two (as well as SundaeSwap and WingRiders) are all centralized. I've called this out on r/Cardano multiple times, and I can link you some examples if you'd like. Some of them, just like you, ignore what I say. You're just as close-minded as the Cardano fanboys you despise so much.
As of now there are 39 cryptos with market cap greater than $1B Rank 39th is FRAX, a stablecoin with market cap $1.022B
I split between FRAX, DAI and USDC.
DAI (and some other algo coins like FRAX) are backed mostly by USDC anyway.
Okay, I'll admit that not all algo coins have blown up yet, FRAX is probably the best example of that. And I'm glad you're not trying to convince me that algo coins aren't dangerous. That said, from my point of view, I think that the idea of an algo coin is much too dangerous to justify its usage and promotion without a giant history lesson. This is further compounded by the fact that naive people think that because it is a "stable coin" that it is less dangerous. Personally, I'm still not convinced that there isn't a fundamental flaw in all true algo coins though. I'm not sure any synthetic pegging even in traditional finance works. This is a pretty stark difference to someone claiming that all crypto will fail because some did imo.
Iron Finance was another copy of FRAX that blew up. DAI is mostly backed by USDC, which is essentially just fiat once removed. We've already dropped \~4x from the peak. So a 400% over collateral would be falling apart right now. Algo stable coins are dangerous with little upside imo.
Many of them have been working for years: FRAX, LUSD, sUSD, SigUSD, and DAI are crypto backed stablecoins. UST is the most infamous algo stablecoin that never had any backing, unlike many other "algo" stablecoins. I'm not saying crypto-backed stablecoins are immune from collapse, but it is clear overcollateralized crypto-backed stablecoins are the way to go in order to stop using centralized fiat-backed stablecoins.
Yes and no, Blackrock backs USDC, as far at that goes that makes it pretty hard for it to fail with limitless liquidity supporting it. Those protocols also represent a huge source of demand for USDC, meaning that if at some point Circle became malicious, targeting these DAOs would hinder themselves as the demand for USDC goes up in smoke. Though, I do get your point, FRAX DR for example is currently around 12.9%, pretty low for being DAO governed.
But what if, and hear me out, you don't buy permissioned stablecoins and instead bought fully decentralized ones such as DAI, FRAX or MAI?
Stablecoins are a huge part of what makes the crypto market viable for a lot of us third worlders, having a way to save on dollars when we have restricted access to currency exchange, criminal fiscal policy and fraudulent monetary policy is why a huge number of us go into the crypto market everyday. With that being said, I don't feel the slightest sympathy for Tether, I very much prefer the model of actually decentralized stablecoins such as DAI or FRAX.
You just described the entire financial system though. There's a reason the average stock P/E ratio is 16, you're paying **16 times** the amount of earnings you'd get for your share of the company. Gold? Why is gold valuable even to this day? Because it doesn't debase as much as the dollar? Doesn't BTC do exactly that? Aaaand, finally, selling for more than you bought isn't *the only way to profit from crypto*. You get LP comissions, DEX emissions, Revenue sharing, it's an actual fucking industry with cashflows and revenue accrual now, you should do a bit of research. DeFi protocols that are profitable are highly sought after because their business model is viable and generates income. Things like AAVE, Curve, Uniswap, Maker DAO, FRAX, Beefy, QI, all take a cut from every trade, every deposit, every token pair, and holding the token allows users to get a share of that distributed to them, hence why those tokens have demand. It's exactly like stock, but decentralized.
I like Curve and selling veCRV voting rights biweekly. Look into the liquid staking options built buy stake DAO. It’s a very solid front end for some of the best established DeFi protocols out there. Curve, Banlacer, FRAX, ANGLE and several others all in one front end.
It all depends on which stablecoin you refer to. There are a variety of mechanisms to go about it. [Here is a video just to get you started](https://youtu.be/HldRfcmiQnQ) rest assured, the rabbithole goes much deeper than this. My personal assement is to using DAI issued by makerDAO is currently the most secured option in defi. As for other more experimental things the list is rather long, I don't have all the information here but will share a few: [RAI](https://thedefiant.io/earn-and-learn-with-vitaliks-favorite-stablecoin-rai) appears to be interesting and worth looking into, something I have not yet done myself. [Ohm](https://www.olympusdao.finance/) is not exactly what one would call a stablecoin but something one should have on their radar in my opinion. Further more there are the usual suspects, such as tether and usdc. Those are fine to use on centralized platforms but I wouldn't bet the farm on them. FRAX also is doing some interesting things which go beyond the scope of this comment. I haven't answered your question directly but provided some resources which can guide you to an answer. I hope it may be helpful. To wrap things up, [here you'll find an extensive list of available coins and tokens categorized as stablecoin](https://www.coingecko.com/nl/categories/stablecoins) Best of luck on your journey sir
>The system of backing has been basically exploited, taking into account we were facing a major bear run/crash/dump Bro, there wasn't enough liquidity circulating to take a massive bank run, that's nobody's fault but the Protocol's dev. It had absolutely nothing to do with DiScLoSiNg YoUr HoLdInGs. It also had no business being 100% algorithmic, that only works in a constant uptrend, but whenever a breakdown shits the bed your **WHOLE NETWORK'S GAS TOKEN TANKS**. They should have started backing it up a long time before they did with that BTC backing drowning slaps. Had they properly supplied the Curve pool with enough exit liquidity and partially backed the things with a basket of assets (a la FRAX) this wouldn't have ever happened to the degree it ended up happening, sure, LUNA would have tanked still, but not to the point of incontrolable inflation and death. (Though some stupid motherfuckers still trade LUNC so yeah) Matter of fact, go check out FRAX, it's UST but done well on Ethereum.
Actually, there was a decent plan. They formed 4pool which intertwined UST, USDC, FRAX and USDT and, with deep enough liquidity, this was supposed to help hold UST peg. Also, TFG bought a lot of BTC that was supposed to be used to exchange 1 UST for $1 (by selling $1 worth of BTC) as a last resort. The main problem was, they let UST get too big too soon. In my opinion, it was never supposed to be listed on major CEXs until they had all of these mechanisms in place and until they figured out how to make Anchor sustainable. If they didn't get really loud and greedy and took enough time to put all of things in place, I think UST would still be alive now. People don't realize how close Terra was to making it. Luckily, it fell apart and we got rid of an overconfident egomaniac that was willing to leverage entire crypto space just to keep Terra alive. Do Kwon and Lunatics really needed the humble juice they got.
Why are you including FRAX but not USDC/DAI/USDT/BUSD?
Something's not right about this table though... LEO, EVMOS, PAXG, TUSD and FRAX all have values over 1 million. Surely I'm misinterpreting this somehow
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.
MKR FRAX Abra All the money markets are they securities?
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.
It was a shame for the crypto community in general. Getting beat down more in a market downturn. I would like to know how UST compares to FRAX - which I believe is another algo.
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.
Nah we got USDC, FRAX and DAI
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.*
FRAX is backed by 3pool tokens not USDC
it's become a proxy for USDC so it's not the greatest example. Same with FRAX. curious about dpxUSD which is launching soon (this month) but a fully decentralized algo-stable coin is still a mythological being atm
Lend to earn passive income! 💰#Ethereum$DAI 85.1%@0xPolygon$USDC 18%@arbitrum$FRAX 64.1%@BNBCHAIN$USDT 108%$BUSD 36.6% Lend now 👇http://ooki.com/lend
The difference is FRAX owns most of the FRAX liquidity meaning there isn't enough outside FRAX to be sold to knock it off peg.
Yo, why don't people mention FRAX that much? I mean, that thing keeps pegged even though there's a bear market going on and it being similar to UST functionally.
>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.
FRAX seems like a quality project, and one of the original algo coins.
You only hear of the failed experiments, not the projects that actually work. Read into FRAX, it’s probably the only algo stablecoin that will survive long term.
Well, while we're on this subject : Some insider info: DEI is transitioning from Algo coin to USDC - FRAX - DAI backed stable coin. Currently worth 60c and soon to be pegged. Great #arbitrage opportunity.
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.
About FRAX, yes! I need to understand their FXS Token more and also about decentralization and these stuff. Just going more in detail other than just knowing that it has a stablecoins and it's backed by USDC and FXS.
FRAX seems neat and from what I've recently read it seems they're overcollateralized atm
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!
Will the same thing eventually happen to other algorithmic stables like FEI and FRAX?
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.
FRAX seems to be an algorithmic coin done right. It is 87% collateralized, the collateral is quality and diverse, and the uses are across many pools and protocols, not tied to one big, unsustainable one.
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/
Unless UST has a v2 no. FRAX's mechanic makes way more sense. They can't have more debt than the MC of the project.
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.
DAI & FRAX. Both more decentralised and more battle tested than UST. Both have performed pretty well today.
I mean FRAX has 2.6 billion market cap and holding a dollar better than anything else out there. Just wait until you hear about fractional reserve banking which the US has been using for decades.
I mean FRAX is doing better than all other stable coins and it’s backed by collateral and backed algorithmically. So I wouldn’t count out all algo stable coins, just the ones backed by 1.3 billion in BTC.
>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!
Can someone help me I don’t know anything .. I just sent an amount of FRAX from my metamask wallet to my ETH address in Shakepay. Am I screwed ?
Anyone use Zenlink? 7M MC. To me it seems the best dex on DOT. Getting 87% apr on a GLMR/FRAX pool. With such a tiny market cap for their reward token, I am super bullish.
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