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People who'd want to spend cryptocurrency might want cryptocurrency's advantages, without its volatility. People who want to invest/speculate in cryptocurrency
by gojomo 8y ago
People who'd want to spend cryptocurrency might want cryptocurrency's advantages, without its volatility.
People who want to invest/speculate in cryptocurrency will often want some proportion of their portfolio value to be as stable as USD. But, actually holding true USD at exchanges/banks could be more complicated, requiring interfacing with legacy banking systems & regulations. A stablecoin allows USD value to be handled at exchanges (and transferred) in manners almost wholly analogous to other cryptocurrencies.
- lawn 8y agoExcept these stable coins doesn't solve the core problem cryptocurrencies do: uncensorable transactions. Tether for example has the ability to freeze addresses. They can also freely manipulate the coin supply (a necessary feature for stable coins) which goes against the decentralized idea of cryptocurrencies.
- wmf 8y agoAFAIK Basis and DAI are both trustless; not everything is as bad as Tether.
- Nursie 8y agoDAI has some sort of emergency provision for freezing the entire chain and returning stakes, controlled by MKR token holders, whoever they are.
- chrisco255 8y agoIt has a global settlement (which more or less liquidates all collateral). It doesn't freeze the ETH blockchain that DAI are traded on. DAI could be returned to the main contract for X amount of ETH based on the spot price of ETH when the global settlement is executed. But DAI could still be traded around independently of the global settlement. It's value might have slipped as a result, however, based on whatever ETH became worth following the settlement. The market would still determine that price, however.