Reddit Posts
Revolutionizing the CashToken Ecosystem: A Centralized Stablecoin Exchange Proposal.
Uniswap's founder hayden adams decided to charge a fee in the official frontend starting tomorrow
The Big Redeeming. - Full Research on Why LQTY Will Likely Explode in Price Because of Redeeming
Helping the above average John guy understand the Defi space :Decentralized Lending & Borrowing, Compound Finance, Maker, Aave, TVL, Utilization Ratio, Lending and borrowing rates and risks + notable mentions
Linear Finance DeFi Exploit Collapses LUSD Stablecoin to Zero
L7dex / Stake your NFT and Earn up to 1.5% a day
It's not FUD anymore, USDC has depegged. DAI & some other decentralised stables have also depegged. Get your money out of stables.
Anyone know what's going on with stable coins on AAVE?
BEAN:LUSD pool is live on Curve
Introduction to financial risk for stablecoins
LQTY Stable Coin | Solving Maker's DAI Problem and No Governance
DeFi101: Introduction to financial risk for stablecoins
How is it possible that there are cryptocurrencies which are using the same shortform?
Thoughts on stablecoin failure?
Mentions
>I have always believed that tokens like this will have some degree of centralization creeping in if they are always trying to keep a peg to a specific government currency. What about purely ETH backed stablecoins like LUSD?
ok but the #1 stablecoin fluctuates too. I said "even LUSD" because someone already mentioned DAI, and LUSD is the most decentralized dollar pegged stablecoin in existence
Facts aren't FUD though. Comparing it to LUSD... that's not even a top 10 stablecoin https://www.coingecko.com/en/categories/stablecoins
this is the wrong FUD. Even LUSD fluctuates the real FUD is that Djed closed source and has a proven backdoor that the team has used to migrate liquidity without user permission (Djed website claims its decentralized btw)
Overcollateralized, unbridged algorithmic coins like LUSD, USDM, etc are the 'safest' but they also have the least adoption and low liquidity so they easily depeg in extreme market conditions (there are financial incentives to repeg but it likely won't be instantly).
If I would go into stablecoins, I'd consider going into several in order to distribute risk. And preferably established algorithmic ones over custody based. LUSD (liquity) was quite resilient during the FTX induced flash crash of USDC. DAI did also recover quite fast. Also lots of smaller ones exist...
Be careful, stablecoins can depeg, neither USDC nor USDT is necessarily safe long term. It happened in the past, it might happen in the future. Depending on the amount you have, you could split it between USDC, USDT, LUSD (a bit more technical), and leave part of it on CEXs like Binance for instance. Just do your research, be careful, don't give your seed to anyone, and don't think any solution is risk free, because none is.
But there LUSD is still out there, and presumably redeemable? So how overcollateralized is it? How much does ETH have to dump before there isn’t enough value to redeem back all the borrowed LUSD. Or can you only call the undercollateralized positions with LUSD?
There isn't enough information to answer your question but the point is you are liquidated at 110% collateral compared to what you borrowed. So for example, if you used 1 ETH in collateral, you could borrow $1350 of LUSD.
So assuming ETH at $1500, how much are you getting in $ per LUSD? Starting today, going straight to 1500.
So assuming ETH at $1500, how much are you getting in $ per LUSD? Starting today, going straight to 1500.
If it de-pegs you can redeem for the full amount. If you used ETH to back LUSD, you get liquidated at 110%.
What’s their safety buffer? How big of a dip can they take before 1 LUSD is less than a 1 USD of ETH?
LUSD is backed by ETH and can always been redeemed for its equivalent price in ETH.
USDC if you are ok with centralized risk there. LUSD if you want a fully decentralized, on-chain stable backed by ETH.
I understand your viewpoint. However, consider what activities people are engaging in on a L2 platform. For instance, if you're aiming to earn passive income as a Liquidity Provider (LP) with an ETH-stablecoin pairing, accumulating as much ETH as possible becomes a priority. Or, if you're looking to borrow against ETH on a lending platform, such as Aave or Compound, again, the accumulation of ETH is key. Consider also the minting of LUSD, DAI, or other Ethereum-backed assets, which necessitates ETH. Even for purchasing NFTs, which are predominantly priced in ETH, the demand for Ethereum remains strong. Furthermore, reflect on the profile of users who engage with L2s like Arbitrum or Optimism. Such users are inclined to accumulate Ethereum, similar to how Bitcoin enthusiasts hoard BTC. Moreover, a proliferation of L2s being actively used signals Ethereum's exponential expansion. Developers could have opted to create independent chains separate from Ethereum, yet they chose to integrate into the Ethereum ecosystem. This decision underlines their confidence in Ethereum's robustness and potential. It’s likely that users will experiment with various L2s and side-chains, such as Polygon, further necessitating Ethereum. To utilize these diverse systems, Ethereum remains a fundamental requirement. So, while individual transactions on L2s might require less ETH than on the main chain, the overall expansion and diversification within the Ethereum ecosystem suggest a sustained, if not increased, demand for Ethereum.
How is LUSD an improvement? If you can't answer that you're the wrong person to be having this conversation with.
You keep bringing up Luna’s UST as though it’s comparable to CDPs like DAI or LUSD when they’re clearly different. Anyone who did proper research on how Luna’s UST worked would taken pause. Even now you’re expecting to be spoonfed information which isn’t even unexpected since your criterion for a scam is that “you haven’t heard of it before”. lol…
Nah. That was an algorithmic stablecoin who collateral was entirely endogenous. It didn’t matter what its TVL was. It was bound to fail when the ponzi stopped. If you’re comfortable with using DAI, then LUSD isn’t that different. It’s overcollateralised by ETH. Obviously, if you’re not touching defi stablecoins then neither are good.
I can't seem to find whether they rated Liquidity (LUSD) or any of its forks.
I still don't see what value was lost? USDC or LUSD?
According to The Block, Uniswap (UNI) plans to apply a 0.15% fee to certain cryptocurrency transactions within the web interface and wallet starting on the 17th (local time). Tokens to which fees apply are ETH, USDC, WETH, USDT, DAI, WBTC, agEUR, GUSD, LUSD, EUROC, and XSGD. In this regard, Uniswap founder Hayden Adams explained, "This action is separate from UNI Token Governance's proposal to switch the Uniswap protocol fee." The Block Research estimated that applying a 0.15% commission would increase revenue by about $1 million per day.
tldr; Uniswap will start implementing a fee of 0.15% for certain swaps on its web interface and wallet starting on October 17. The tokens affected include ETH, USDC, WETH, USDT, DAI, WBTC, agEUR, GUSD, LUSD, EUROC, and XSGD. This new fee is separate from the Uniswap Protocol fee switch and is one of the lowest in the industry. The fee is expected to generate around $1 million a day at Uniswap's current volumes. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.
No one talking about LUSD? The most unstoppable, batte-tested, resilient stable made through an immutable protocol?
Keep in mind that this is in no way related to Liquity's LUSD which remains one of the most robust decentralized stables out there.
Rip.. :( better LUSD than USDT xD.
The last 7 days LUSD was around $0.95-0.90, then yesterday it dropped to $0.00223972. This once again shows us how dangerous stable coins can be
Why does it feels like a fake news? I can see LUSD still being stable at $0.99
tldr; DeFi protocol Linear Finance has reported an attack that resulted in the collapse of its stablecoin, Linear USD (LUSD), to zero. The attacker exploited the system by minting unlimited LAAVE, trading it for LUSD, and selling the tokens on decentralized exchanges. The protocol's LINA token remains unaffected. The team has halted all smart contracts and bridges and is working to track the attacker and restore the protocol. The total value locked in Linear Finance is around $8 million, and the LINA token has not been affected by the exploit. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.
[https://x.com/LinearFinance/status/1704818417880936535](https://x.com/LinearFinance/status/1704818417880936535) >The Linear stable coin $LUSD appears to be under an exploit attack. While the team investigates, DO NOT BUY LUSD, DO NOT TRADE $LUSD Liquidations are paused and users accounts are not at risk. Further updates will follow.
LUSD is the only truly decentralized stable in existence.
Really, those are the stables you think of? Not for example DAI, FRAX or LUSD?
tldr; Bluechip, a non-profit stablecoin rating agency, has raised concerns about the legitimacy of its rankings. The agency uses a set of six qualities called SMIDGE to measure stability, management, implementation decentralization, governance, and externals. The top-ranked stablecoin, BUSD, has received an "A" rating despite being recently halted by the New York State Department of Financial Services. On the other hand, USDT, the largest stablecoin by market cap, is ranked at the bottom with a "D" rating due to concerns about its audit. Bluechip suggests that Tether can improve its ranking by disclosing custodian names, providing transparent redemption timelines, and lowering the redemption ceiling. Decentralized stablecoins like Liquity's LUSD and MakerDAO's DAI, which rely on overcollateralization, have earned high rankings for their safety. Bluechip plans to expand its list of rated stablecoins in August. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
I like Monero but it's not enough. Privacy is very important and Monero existing is really nice but it doesn't solve the problem since you can only trade their own token. I want to be able to trade my ETH and LUSD privately as well (& other tokens potentially). Another disadvantage is the lack of smart contracts. Storing your coins safeguarded by a simple seed phrase is a huge risk, smart contracts allow adding additional restrictions to make self-custody of assets much safer, which will become more and more important as crypto gets normalized.
Well, they think like: what does a bank account do? Like what functionality does a regular account have? Exactly these functions: the bank controls the balance can freeze and seize control. So your regular bank can currently do all these things. By itself or upon request of authorities. And this is exactly why crypto, actual decentralized crypto stables like DAI or LUSD, are better. They are real bearer assets, you own them. Nobody can block them. Power to the people.
DAI, LUSD, and RAI. DAI is centralized but heavily in bed with the government. RAI is fully decentralized, but works more as non-pegged stable token works on 8 different algorithms (tmu). LUSD is fully decentralized with only ETH backing it. USDT is very suspect indeed. USDC is likely in bed with the govts but its heavily centralized
The website mentions it's paid out of inflation, but you have to look under the FAQs here (or the whitepaper/Solidity): https://hex.com/faq/#inflation It's not claiming to pay token holders in something it can't physically mint, like with Luna's fake USD backing. That's why I don't see how we can equivocate high yields paid by Luna/Celsius in BTC and LUSD with the HEX minted according to the smart contract's rules. Do you think they're still equivalent?
I don’t think they will. But the copied stable coins wasn’t a goal, it was a byproduct. Pulsechain will have bridged in stables or it’s own LUSD like stables from liquity protocols being cloned. The things that might have some value are tokens for Ethereum games or protocols that have gotten priced out of viability due to gas prices becoming too high. The developers can just point their front ends to the new network and everything will work just as it was. All the users have access to everything they had. Or who knows, maybe USDC will be worth like a millionth of a cent or something because some users will pay a little for the novelty of being fake USDC billionaires. Or maybe a meme coin will resurge because meme coins don’t make any damn sense anyway.
He delivers his points well, but he misses the forest for the trees to play to his audience. Do it again but instead of UST do DAI/LUSD, instead of Celsius do AAVE, and instead of FTX do Uniswap and see if it still works. Crypto didn't fail, people did. Crypto and DeFi did just fine.
Nice to hear your constructive criticism. Let me address some of them from my perspective. >There's an entire layer of what I consider to be bullshit talk (the technology, saving the world from banks, fair economy and so on), while everyone's motivation is actually to get rich from trading in the next bull run. Crypto started definitely with the focus on the former. It was a way for technies to find a way to avoid the systemic problems created by overly fragile financial system (e.g. due to Fractional reserve banking) and the inflation and power politics induced money printing. It was kind of luck, that it actually became.so popular. I knew about bitcoin and Blockchains since 2013 - but didn't invest because I saw the tech, I liked it, but said "yeah, it's going to fail. It's just s neat project which won't take over the world." But yeah, I was proven wrong. Yes, over the time much more people have come, who're in for the money. But I argue, that the core values of crypto make this possible in the first place. The core values of Crypto make bitcoin/ethereum etc. much more different than investing into an single stock or so. And your argument about the bull run can also be applied to the stock market and all kinds of investments. Stocks have companies baking them, but they don't "create any new money". All profits you get are by someone else who buys when you're selling. And they buy, because they want to hold it for a few years and sell it - then the stock is perceived as more valuable and sold at a higher price to the next buyer. And so on. This whole dynamic of "DCA in and sell higher later" applies to stocks, ETFs, crypto all equally. And all of them have some level of inherent value. For crpyto for instance, there are enough examples of ppl making good international p2p payments. There are examples of people being able to work on jobs which are culturally not accepted, but which aren't harmful. (Ask sex workers about how fed up they're on the stereotypes.) >In addition, while the crypto part is ok, the currency aspect is inherently failed because the incentive mechanisms reward every use case other than being a cheap, safe medium of exchange. In general, as the mcap increases the volatility will also decrease. At the same time, there are many interesting stablecoins approaches on the ethereum network: DAI, MAI, RAI, USDC/USDT, LUSD. Of all of these, Rai is an outlier, because it's stable but NOT pegged to the USD. Then there is also the LED: liquid energy dollar. >Add to this that the environment is heavily popilated by scams and grifters, and you get why one tends to accept Bill Gates' "greater fool" theory regarding crypto. To some extent this is a consequence of the Decentralisation & permissionlessness value. If you stick to basic rules such as going to official projects websites and being suspicious of high earnings etc. then one is often fine. The thing is, that the self-custody and self-empowerment in crypto has its costs. And the costs are higher self responsibility. In tradfi, you never keep your assets in your custody. It's the responsibility of the banks to keep you money and regulations and insurances cover the rest (for which you pay via taxes and bank fees). In crypto, you don't pay for that, but you need to get some practice and security hygiene. Over the time this will get easier - but atm it's still nerve wracking for some people. Also, people need to learn to be self responsible more with Crypto than with tradfi. This is a genuine tradeoff. Feel free to respond and counterargument. I'd like to hear and get educated from good points as well. :)
First time I see RAI mentioned elsewhere than on Vitalik's website, but I have also been using this as a decentralized hedge to all stablecoin shenanigans going on. Your comment makes me think of two things: First, you imply LUSD is as safe as RAI but I thought the moving peg/redemption rate was paramount to be able to ensure full worth of your RAI even in a wind down scenario where everyone leaves the protocol. Do I misunderstand? Second, what are the flaws in RAI or LUSD that you aim to resolve with your own project?
its only smart contracts on the blockchain. we don't NEED to use it. DAI/LUSD will never go away. Can't remove immutable swap pools. Over time, if everything gets onchain, then this will all be nothing in the end because the bank to web3 pipeline will no longer be needed
You might be better suited to ask in r/BTC overall. > So I'm asking you all. If bitcoin isn't actually money, and it isn't a good medium of exchange or a reliable store and consistent store of value, or even an Inflation hedge: > Then what is Bitcoin? Bitcoin is only money as far as people use it that way. Honestly, I find some other coins or crypto on ethereum L2s more useful than bitcoin, as it has quite high tx fees. I have not used the lightning network though... I agree with you, that crypto has quite strong bull and bear markets - much more than traditional branches. However, the growing tech development and adoption is indeed a good reason for why this is happening. And there is real value behind crypto with its direct txs, censorship/politics-resistance, etc. However, on top of this real value there is lots of FOMO etc. that makes the dumps and pumps. However, as you can see historically, we've never reached a new bottom after a bull market has happened. And as more and more people buy bitcoin, it stabilises it's value to whatever it has now. This also means that future bull markets will likely not be as extreme as previous ones. It is a reliable store of value IF you don't mind that it fluctuates and IF you want to keep it for long term when new bottoms are reached. However, if you don't believe this, which I can understand, then bitcoin isn't such a good option for you. In the ethereum ecosystem there are stablecoins, some of which are more Decentralised than USDC/USDT, (RAI, DAI, MAI, LUSD), which can be store of value with little volatility. However, if you don't agree much with the established tradfi and Central banking system, then you don't actually want your assets to be pegged to USD (which means that only RAI works for you). As medium of exchange. Cryptos such as dash, etc. are also popular. However, if you're living in a well developed country, then there isn't much need for such things, as the finances are rather stable and well developed. But in Argentine, el Salvador, Pakistan the situation is different. I don't know too much about bitcoin and also don't hold it. I'm only in the ethereum ecosystem, so my answer is related to crypto in general, not specifically bitcoin. To all of the statements I've given, you can find people talking about and using it that way. I was too lazy to collect the links for all of my examples. IMO notable cryptos towards the original vision of bitcoin white paper are kaspa, payment via Ethereum L2s, and coins such as dash.
Ask anyone who accepts crypto for payment and ask their volume. No one uses crypto for payments. The absolute best thing to do to accept crypto is simply allowing users to connect and pay with USDC from their wallets. Then allow users to connect from any USDC/DAI/LUSD enabled blockchain like Ethereum or some others. If you waste time using all of the ones people are mentioning, you're going to get zero value extraction. It must be a "stable" token but which ones are up to you
Spread across USDC, USDT, LUSD and Frax; held on chains where they’re native (aka not bridged)
we want away from centralized stablecoins or backed by gold or whatever. the model that will be the future for stablecoins is the model LUSD is using, somehing in that vein. like DEXes, the users provide the liquidity and earn fees. same with the future model of stablecoins. Giving power back to people and makes it hard to destroy because not 1 point of failure.
Take a look at LUSD in the Liquity Stability Pool, deposited via B Protocol
I will create LUSD backed by USDT the safest in market
Look into Liquity / LUSD. A much cleaner and purer implementation of MakerDAO / DAI.
I had weighted more towards USDT at the end of last year, but I always hold a mixed portfolio of stables with an eye on correlation risk. I also hold DAI, SUSD and LUSD. And some USD on an exchange. It’s not about trust per se for me, it’s about managing risk. I’ll let the dust settle on this for a few weeks and recalibrate. I may balance a bit more back towards USDC.
That's why one should use LUSD. Decentralization doesn't matter until it does.
You forgot the two most interesting decentralized stables LUSD and SUSD, both of which held their peg to above 98cents.
LUSD, BUSD, or any stables that don't have funds in SVB?
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.
What are your thoughts on LUSD?
There's always LUSD, backed only by the most pristine decentralized collateral (ETH).
People would like to be able to store profits and money somehow safely on the chain. A stablecoin is also immensely important for DeFi. It allows less risk for liquidity providers (in theory) when only one asset is subject to price fluctuation. But even crypto backed stables are not secure. I am not talking about UST here. Even LUSD which is completely backed only by ETH has lost its peg. DAI was anyway 2/3 backed with USDC so I'm not surprised by the current price situation there. A decentralized stablecoin that is backed by central stablecoins, I always thought that was weak anyway.
Over collateralized, unable to be frozen by centralized figures, and high liquidity cross chain. so MIM, MAI, SUSD, LUSD
Mt.Gox hack was far worse for crypto than the loss of stable coins would be. Yes it will devastate defi, but defi would rebound faster than before entirely with Algorithmic stable coins, maybe like LUSD or others.
LUSD (over collateralised by ETH only)
tldr; Crypto.com is rolling out support for Liquity (LQTY) and Gelato (GEL). Liquity is an ETH-based lending protocol powered by its stablecoin LUSD. Gelato is a decentralized automation protocol comprised of smart contracts built on Ethereum. *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).*
Liquity is a decentralized Ethereum (ETH)-based lending protocol powered by its stablecoin LUSD. The protocol uses ETH as collateral, and LQTY, its native token, can be used for liquidity mining and staking. LQTY stakers can earn LUSD from fees on loan issuance, and ETH on redemptions. Interesting. Lets see how this turns out
Unfortunately, we are now seeing the end of BUSD, which was my personal favorite. I would probably split it into 4 parts. USDT even if there are rumors for years that not nearly enough reserves exist to ensure the peg. USDT has proven itself in the market. USDC and TUSD have audits that show that these reserves are really there. The problem with the three is that the SEC could cause problems in the future similar to BUSD. That's why I would add a decentralized stable. Namely LUSD, which is only backed by ETH. DAI is not an option in this case because the DAI pool has mostly USDC as a basis, so should USDC have problems with the peg then automatically DAI.
Market value is determined by liquidity on exchanges. For example, LUSD could be worth 0.90 on an exchange, but you can still burn it to get back the full $ (in ETH). Conversely, USDT may be worth $1 on an exchange, but if it is not backed 1:1, then it is *really* stable?
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.
>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.
Most safe centralised is USDC, most safe decentralised is LUSD
LUSD, proper DeFi, not centralized, no admin keys, backed by ETH. You don't even need to pay interest on it if minting it, just a small origination fee, which goes to LQTY stakers.
I'd buy 20k worth of Velodrome, and vest it for 4 years into a veNFT, and earn a basket of different rewards over the 5 years in bribes and trading fees allowing me to stay diversified while honoring the wording of this question. Currently I'm collecting bribes and fees in Eth, Lido, wsteth, USDC, LUSD, Kwenta. Or i could just give you a boring answer like the #1 crypto, or say the #2 and claim it's because it 'has the most upside'. The reality is there are plenty of coins with way more upside, just alot less certainty they will be relevant in 5 years.
Yes, this has been tried before. In 2015/2016 with MakerDAO's SAI, later to become DAI (150% collateral) and in 2017 with Synthetix (800% collateral). Since then, there are many many more on Ethereum, including LUSD which is 110 % collateral and RAI which is not pegged to the dollar but rather uses a PID controller to maintain peg.
Sorry if you think it is off-topic, but I think my comment generally applies to this discussion. And not many people know about LUSD, so I like to put it out there.
Try to censor/freeze LUSD, which is 100% backed by ETH using uncensorable smart contracts on Ethereum
I don't know how the minting process is super akward. You send ADA to the contract and get back DJED (as long as the reserve ratio is above 400%). It's as simple as that. Also, capital inefficiency is the sacrifice for having a crypto-backed stablecoin; the asset backing the stablecoin fluctuates relative to the target peg, so you need to have more in order to make up for possible volatility. This is why *every* crypto-backed stablecoin is overcollateralized/capital inefficient, whether it be DJED, SigUSD, LUSD, sUSD, DAI, etc.
In my personal opinion, LUSD and sUSD are good Ethereum stablecoins, though I encourage you to find what suits you. Of course, DYOR and know that all decentralized stablecoins have benefits, drawbacks, and risks.
iUSD isn't decentralized LUSD smart contracts can never be upgraded, iUSD is both closed source and upgradable
>the most decentralized stable coin in existence, LUSD, is completely immutable and censorship resistant. One of the most. I'd argue sUSD and SigUSD are just as decentralized. >It also happens to be EVM exclusive iUSD is technically Cardano's equivalent to LUSD in terms of how it works.
you could just use censorship resistant stable coins the most decentralized stable coin in existence, LUSD, is completely immutable and censorship resistant. It also happens to be EVM exclusive
I think there is a place for it. But if you prefer a more pure stablecoin untainted by the legacy system, look no further than LUSD, which is backed solely by ETH.
No, not all stables. For example RAI and LUSD are purely backed by ETH.
That’s why you should use LUSD.
I have been looking at LUSD and chicken bonds and it's a pretty confusing setup. Yet somehow it works pretty well. I'm hardly an expert, but I couldn't see any issues with it. It seems to have solid collateral.
>The most reputable decentralized stable is DAI. And even DAI uses USDC as a reserve. That's a paradox. You cannot claim DAI is decentralized and then say it uses USDC, a centralized token, as a reserve. >Overcollateralized can quickly become undercollateralized in a few minutes when real shit hits the fan. Correct, but that's why it's important to have protocols like debt liquidations to help maintain the peg of stablecoins. LUSD and sUSD, which have liquidations, have held up despite the value of their reserve tokens falling since Nov 2021. Not saying these stablecoins are perfect, but they have held up without resorting to centralized methods. >Do you want to take the bet that your decentralized stable stays stable under heavy volatility? No, I'd rather just sell for USD and not bother with any stablecoins. Decentralized stablecoins, like centralized stablecoins, are not immune from collapse. However, it is better to hold a stablecoin that cannot be blacklisted as opposed to one that can, which is the basis of my entire point you seem to be ignoring. Decentralization is useless if you use it with centralization. If a decentralized stablecoin I use depegs, I can sell it to get some money back. If a centralized stablecoin I use blacklists my address, then I essentially lost *all* of my money. If I think there is going to be volatility to the extreme, I'd rather just sell for fiat. >As crypto grows larger, it becomes harder to find liquidity to sustain a stable by purely overcollateralizing crypto assets without centralized stablecoins. That's a fair point, and that's the sacrifice of capital efficiency for decentralization. If decentralized stablecoins fail in the long term, then I'd just be against all stablecoins. I won't ever use USDC or other fiat-backed stablecoins in the context of DeFi since they can be blacklist any of the smart contract addresses, which again, goes against decentralization in every way possible.
Seems reasonable. I have to admit zero knowledge of LUSD and sUSD - are there audit reviews/analyses available? (Asking in case you know of any particularly useful insight / analysis)
LUSD and sUSD in particular are overcollateralized. I would also argue that decentralized crypto-backed stablecoins (not algorithmic unbacked stablecoins like UST) are more transparent than fiat-backed stablecoins like UST. For fiat-backed stablecoins, you have to trust that not only the issuer actually goes to get an audit, but you have to trust that the audit is actually accurate. This also doesn't take into account that audits are done every once in a while. With crypto-backed stablecoins, you can verify the reserves any time you wish by looking at the smart contract address on the blockchain's explorer.
Yep. My favorite ones are LUSD and sUSD, but there are other decentralized stablecoins on Ethereum as well that I encourage people to look into. Unfortunately though, none of the decentralized stablecoins have anywhere near as much traction as their centralized counterparts.
LUSD has worked for a long time, but that is because it is backed by the most pristine capital (hint: begins with E and ends with m) in crypto.
There will most likely always be development of stablecoins that can't be blacklisted by a single entity, which applies to all fiat-backed stablecoins. Algorithmic stablecoins with no collateral (like UST) and/or with no safeguards/liquidations (like USDN) won't last long, but crypto-backed stablecoins do (like LUSD, sUSD, SigUSD, etc) have been doing quite well. Not saying they are immune to failure (every stablecoin can fail), but clearly single-asset overcollateralized crypto-backed stablecoins with safeguards/liquidations so far have been on the right track.
I don't trust any centralized stablecoin but we have to use them. USDT, USDC, BUSD are centralized stablecoins. If you are using any of them, you have to trust the issuer. Since there is no proper regulation in crypto and also stablecoins, I wouldn't trust them completely. There are also algorithmic stablecoins. Terra-Luna's UST was one of them and we all know what happened. There is DAI which I trust but the problem is DAI is backed by USDC a lot. Therefore, any depeg in USDC would also affect DAI. There is LUSD. It is also algoritmic stablecoin and it is only backed by ETH. However, the liquidity is pretty low there. I agree that we definitely need a liquid stablecoin we trust but currently nothing is perfect. I look forward the regulations in stablecoins. Some people get scared of it but we really need some regulations here.
see this article for a comparison of DAI, LUSD, and their possible points of failure https://twitter.com/TokenBrice/status/1526905218495041540
I would only used decentralized stablecoins. On Ethereum, it would be LUSD or sUSD.
Yeah that's whats interesting about it to me but I don't really know if LUSD could survive a bank run UST style or a big crash without immediately losing it's peg. I know that they don't use a lengthy auction process like others but I still don't understand enough about the technology to say with certainty that it won't.