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Quick 🧵 on why every single stablecoin protocol will end up looking identical to @fraxfinance given sufficiently long time. #AllRoadsLeadtoFRAX

@MakerDAO launched their DAI minting module today. This is a bigger deal than most people think because it makes $DAI algorithmic.
The DAI Direct Deposit Module (D3M) mints fresh $DAI into @AaveAave for users to borrow. If too much DAI is minted and interest rate <4% then D3M contracts supply to target 4%. If rate >4% then DAI supply expands (algorithmically).

When designing $FRAX v2 we came up with the concept of an "algorithmic market operation" module. FRAX is minted into a selected protocol if $1.01 & contracted/burned if price is $.99. The abstract idea is to create composable levers for rebalancing FRAX supply instantly anywhere.
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