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> what are USD-pegged stablecoins for? No snarky answers, please simply put: mitigating price volatility of the base token. rather than only holding an asset t

> what are USD-pegged stablecoins for? No snarky answers, please simply put: mitigating price volatility of the base token. rather than only holding an asset that has huge swings per day, you can hold an asset that has minuscule swings per day. this might be useful for tax purposes, payments & donations, or just to balance your portfolio. unlike fiat this has all the features of ERC20 and self-custody. DAI, USDC and RAI are all fairly interesting and make different choices and trade-offs to stabilize their price. all stablecoins do carry risk though; if you want a risk-free coin then just convert to fiat.

ogogmad 4y ago
> simply put: mitigating price volatility of the base token Then cash it out and put it in your bank. OMG. > this might be useful for tax purposes, How?? > payments You can't pay for groceries. > & donations, Your donee won't be able to get groceries. > or just to balance your portfolio. But it pays no dividends, so it's not really part of any portfolio, and it's a poor man's cash. > unlike fiat this has all the features of ERC20 And what are those? And can those be achieved in other ways? > and self-custody. What the hell does this mean? > DAI, USDC and RAI are all fairly interesting Oh, indeed! > and make different choices and trade-offs to stabilize their price. But I still don't know why you need this!!! > all stablecoins do carry risk though; if you want a risk-free coin then just convert to fiat. Oh, absolutely. [addition] I'm coming more from the BTC direction, where smart contracts are very limited. Then I really don't know what stablecoins are for. From an ETH direction, stablecoins might make sense as a way for smart contracts to operate on USD, assuming smart contracts are actually useful for something that can't be done better in other ways.
- mattdesl 4y ago
  Perhaps one example is Endaoment[1], which automatically converts ETH payments to USDC to mitigate market volatility and ensure beneficiaries receive donations in dollar amounts. This is also good from a tax perspective, as businesses report income based on the USD price of an asset at the time it is received, not based on the price of that asset later when it may be disposed. Also see Stripe USDC payouts[2]. Some users may prefer this to receiving payments in a PayPal account. [1] https://app.endaoment.org/ https://app.endaoment.org/ [2] https://stripe.com/newsroom/news/crypto-payouts https://stripe.com/newsroom/news/crypto-payouts
- almostkorean 4y ago
  You're coming from a BTC direction but you don't know what self custody means? Anyways, an example of what I would use stablecoins for: I expect the price of $TOKEN to go down so I swap it for USDC. While I'm waiting for $TOKEN price to go down I lend my USDC on Aave for ~3% APY (and yes, there is smart contract risk here but I chose Aave in my example for that reason). When $TOKEN price drops enough I swap the USDC back for $TOKEN. Another situation: I want to send my family member money to help with down payment on a house. I don't want to sell $TOKEN because I think the price will go up, so instead I lend $TOKEN on Aave and borrow stablecoins. I send stablecoins to family member (worth noting this would be difficult to do in FIAT due to the amount) and when he pays me back I can then withdraw my $TOKEN. One more: I just sold a jpeg and want to make sure I have enough cash to pay taxes next year. Instead of hoping my $TOKEN price will stay same or go up I sell some for USDC to cover taxes
  - omni 4y ago
    > (worth noting this would be difficult to do in FIAT due to the amount) Difficult how? Wire transfers are a thing. Or are you just hoping that doing this with a token lets you dodge taxes somehow?
    - almostkorean 4y ago
      Jesus, is the comment about dodging taxes necessary? For the record I paid a fuckton of taxes for my crypto transactions, it would be idiotic not to. Do you know why? I'm not sure if my wire transfer experience is uniquely bad, but I had to do a wire transfer when I made a down payment on my house last year. To do this I had to drive to a physical bank location, sign some papers, and then they told me it will probably arrive within a couple hours. Google says the bank I use is 6th largest in the US so maybe bigger banks are better but I'm guessing my experience is not an outlier. edit: oh also forgot to mention wire transfer limits. I don't know the exact limit is for my bank but I'm guessing it's under the amount I transferred. I'm guessing this would mean multiple trips to a physical bank branch in the year 2022
      - omni 4y ago

ogogmad 4y ago

> simply put: mitigating price volatility of the base token Then cash it out and put it in your bank. OMG. > this might be useful for tax purposes, How?? > payments You can't pay for groceries. > & donations, Your donee won't be able to get groceries. > or just to balance your portfolio. But it pays no dividends, so it's not really part of any portfolio, and it's a poor man's cash. > unlike fiat this has all the features of ERC20 And what are those? And can those be achieved in other ways? > and self-custody. What the hell does this mean? > DAI, USDC and RAI are all fairly interesting Oh, indeed! > and make different choices and trade-offs to stabilize their price. But I still don't know why you need this!!! > all stablecoins do carry risk though; if you want a risk-free coin then just convert to fiat. Oh, absolutely. [addition] I'm coming more from the BTC direction, where smart contracts are very limited. Then I really don't know what stablecoins are for. From an ETH direction, stablecoins might make sense as a way for smart contracts to operate on USD, assuming smart contracts are actually useful for something that can't be done better in other ways.

mattdesl 4y ago
Perhaps one example is Endaoment[1], which automatically converts ETH payments to USDC to mitigate market volatility and ensure beneficiaries receive donations in dollar amounts. This is also good from a tax perspective, as businesses report income based on the USD price of an asset at the time it is received, not based on the price of that asset later when it may be disposed. Also see Stripe USDC payouts[2]. Some users may prefer this to receiving payments in a PayPal account. [1] https://app.endaoment.org/ https://app.endaoment.org/ [2] https://stripe.com/newsroom/news/crypto-payouts https://stripe.com/newsroom/news/crypto-payouts
almostkorean 4y ago
You're coming from a BTC direction but you don't know what self custody means? Anyways, an example of what I would use stablecoins for: I expect the price of $TOKEN to go down so I swap it for USDC. While I'm waiting for $TOKEN price to go down I lend my USDC on Aave for ~3% APY (and yes, there is smart contract risk here but I chose Aave in my example for that reason). When $TOKEN price drops enough I swap the USDC back for $TOKEN. Another situation: I want to send my family member money to help with down payment on a house. I don't want to sell $TOKEN because I think the price will go up, so instead I lend $TOKEN on Aave and borrow stablecoins. I send stablecoins to family member (worth noting this would be difficult to do in FIAT due to the amount) and when he pays me back I can then withdraw my $TOKEN. One more: I just sold a jpeg and want to make sure I have enough cash to pay taxes next year. Instead of hoping my $TOKEN price will stay same or go up I sell some for USDC to cover taxes
- omni 4y ago
  > (worth noting this would be difficult to do in FIAT due to the amount) Difficult how? Wire transfers are a thing. Or are you just hoping that doing this with a token lets you dodge taxes somehow?
  - almostkorean 4y ago
    Jesus, is the comment about dodging taxes necessary? For the record I paid a fuckton of taxes for my crypto transactions, it would be idiotic not to. Do you know why? I'm not sure if my wire transfer experience is uniquely bad, but I had to do a wire transfer when I made a down payment on my house last year. To do this I had to drive to a physical bank location, sign some papers, and then they told me it will probably arrive within a couple hours. Google says the bank I use is 6th largest in the US so maybe bigger banks are better but I'm guessing my experience is not an outlier. edit: oh also forgot to mention wire transfer limits. I don't know the exact limit is for my bank but I'm guessing it's under the amount I transferred. I'm guessing this would mean multiple trips to a physical bank branch in the year 2022
    - omni 4y ago