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The stablecoins that succeed aren't very interesting because they're simply blockchain representations of actual funds held elsewhere. Or at least funds that ar

The stablecoins that succeed aren't very interesting because they're simply blockchain representations of actual funds held elsewhere. Or at least funds that are claimed to be held somewhere. Those stablecoins are simply a redeemable, tradeable representation of money held somewhere else. These artificial stablecoins that attempt to get clever with algorithmic finance and smart contracts are interesting because they inevitably collapse when someone pokes the system enough to make it unstable. The strangest part is how it happens over and over again yet people still put money into these flawed algorithmic stablecoins anyway.

thebean11 5y ago
> The stablecoins that succeed aren't very interesting because they're simply blockchain representations of actual funds held elsewhere. Or at least funds that are claimed to be held somewhere. DAI is not in this category. It is backed by over collateralized loans in multiple currencies, and maintains peg by creating and burning coins in a smart contract.
fleddr 5y ago
You say they are "simply" a representation of fiat money, basically a fiat mirror held in crypto, but they play an incredibly important role in the ecosystem: - In some countries, swapping crypto to stablecoin (another crypto) has no tax implications whilst swapping to fiat does have consequences. - For big account holders (not me), stablecoins are the only way to put gains on "dry land". If you win big on exchanges, you can't take it out at once, there's withdrawal limits. It can takes months to get it out, years if really rich. During all this time, your gain may finish if you'd hold it in the original coin, so stablecoins secure your profit in the meanwhile. Fascinating? No, but definitely important.
- quadcore 5y ago
  Interesting there is this new series on Netflix, StartUp about this stuff. So the question really is "does it work?". Couldn't this be interesting for that it will force us to change the way we code? For sure the best paradigm will win over time. And the best coders. People are investing in the coders at this point like they do in a bank. Feels like this story isn't stopping anytime soon.
  - fleddr 5y ago
    In general, everything in our society that can be turned into software code, will. Every company, every institute is a tech company, they just don't know it yet.
jMyles 5y ago
> The stablecoins that succeed aren't very interesting because they're simply blockchain representations of actual funds held elsewhere. Now do MakerDAO.
- xur17 5y ago
  Or LUSD (which is >100% backed by ETH).

thebean11 5y ago

> The stablecoins that succeed aren't very interesting because they're simply blockchain representations of actual funds held elsewhere. Or at least funds that are claimed to be held somewhere. DAI is not in this category. It is backed by over collateralized loans in multiple currencies, and maintains peg by creating and burning coins in a smart contract.

fleddr 5y ago

You say they are "simply" a representation of fiat money, basically a fiat mirror held in crypto, but they play an incredibly important role in the ecosystem: - In some countries, swapping crypto to stablecoin (another crypto) has no tax implications whilst swapping to fiat does have consequences. - For big account holders (not me), stablecoins are the only way to put gains on "dry land". If you win big on exchanges, you can't take it out at once, there's withdrawal limits. It can takes months to get it out, years if really rich. During all this time, your gain may finish if you'd hold it in the original coin, so stablecoins secure your profit in the meanwhile. Fascinating? No, but definitely important.

quadcore 5y ago
Interesting there is this new series on Netflix, StartUp about this stuff. So the question really is "does it work?". Couldn't this be interesting for that it will force us to change the way we code? For sure the best paradigm will win over time. And the best coders. People are investing in the coders at this point like they do in a bank. Feels like this story isn't stopping anytime soon.
- fleddr 5y ago
  In general, everything in our society that can be turned into software code, will. Every company, every institute is a tech company, they just don't know it yet.

jMyles 5y ago

> The stablecoins that succeed aren't very interesting because they're simply blockchain representations of actual funds held elsewhere. Now do MakerDAO.

xur17 5y ago
Or LUSD (which is >100% backed by ETH).