How does an independent Ethereum monetary system powered by non pegged stablecoins work in practice?
It starts with Ethereum’s native asset ETH 👇
It starts with Ethereum’s native asset ETH 👇
ETH is decent money and will become better with time. It’s:
+ scarce
+ easy to verify
+ fungible
+ divisible
+ portable
With Ethereum 2.0 and EIP-1559, it's potentially deflationary.
However, it’s not a great currency.
+ scarce
+ easy to verify
+ fungible
+ divisible
+ portable
With Ethereum 2.0 and EIP-1559, it's potentially deflationary.
However, it’s not a great currency.
It's volatile and undesirable to use for many financial activities that benefit from price stability.
In other words, ETH may be a solid store of value, but it's a poor medium of exchange and unit of account.
In other words, ETH may be a solid store of value, but it's a poor medium of exchange and unit of account.
To address this stability issue, an independent Ethereum monetary system could issue currency against ETH and stabilize it algorithmically through incentives.
This is the core idea of the new wave of non pegged stablecoins:
+ @reflexerfinance
+ @FloatProtocol
+ @OlympusDAO
This is the core idea of the new wave of non pegged stablecoins:
+ @reflexerfinance
+ @FloatProtocol
+ @OlympusDAO
Non pegged stablecoins ultimately derive their value from their underlying collateral (primarily ETH), similar to how the dollar did under the gold standard. 
Once Ethereum has independent stable currencies, a truly independent banking system can emerge on Ethereum.
@RyanWatkins_ goes deep down the rabbithole in his latest. messari.io/article/the-ar…
@RyanWatkins_ goes deep down the rabbithole in his latest. messari.io/article/the-ar…
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