"Stablecoins! Crypto's 'Killer' App" | a thread 🧵
(the one you've all been waiting for)
#Permissionless2022
(the one you've all been waiting for)
#Permissionless2022
1/ On the collapse of Terra/Luna...
"It was reckless financial engineering...it was pretty predictable if you had a little perspective...and a little sense...[but] it was veiled in complexity"
@nic__carter
"It was reckless financial engineering...it was pretty predictable if you had a little perspective...and a little sense...[but] it was veiled in complexity"
@nic__carter
2/ On the collapse of Terra/Luna...
"Do Kwon was extremely aggressive with critics, and the 'Terra' army, they literally called themselves 'Luna-tics
@nic__carter
"Do Kwon was extremely aggressive with critics, and the 'Terra' army, they literally called themselves 'Luna-tics
@nic__carter
3/ On the collapse of Terra/Luna...
This highlights the need for collateralization...it doesn't scale as quickly, but users can be certain users can trade their DAI for one USD.
Sam @MakerDAO
This highlights the need for collateralization...it doesn't scale as quickly, but users can be certain users can trade their DAI for one USD.
Sam @MakerDAO
4/ On the collapse of Terra/Luna...
"USDC is a platform...it's an important piece for the industry...businesses and developers build on top of this...we feel the responsibility of building a platform that will be there for the long-term."
@reginatto
"USDC is a platform...it's an important piece for the industry...businesses and developers build on top of this...we feel the responsibility of building a platform that will be there for the long-term."
@reginatto
5/ On the collapse of Terra/Luna...
"Unfortunately, they saw the cracks too late.
[Frax] is the first project to introduced fractional, algorithmic stablecoins. [Frax] is 89% backed."
@samkazemian
"Unfortunately, they saw the cracks too late.
[Frax] is the first project to introduced fractional, algorithmic stablecoins. [Frax] is 89% backed."
@samkazemian
6/ On the collapse of Terra/Luna...
"It's important to highlight that Frax and DAI are the only decentralized stablecoins at scale that haven't broken peg"
@samkazemian
"It's important to highlight that Frax and DAI are the only decentralized stablecoins at scale that haven't broken peg"
@samkazemian
7/ Does the Terra collapse make it harder for Visa to enter?
"We do think geocurrencies will have a lasting impact on...financial services. Visa's focus is more on the fiat-backed geocurrencies...and how different monies can be moved on different rails"
@catgu_
"We do think geocurrencies will have a lasting impact on...financial services. Visa's focus is more on the fiat-backed geocurrencies...and how different monies can be moved on different rails"
@catgu_
8/ How is Maker different than Frax?
Maker DAO has taken the approach of always being over-collateralized, 100%...which is a design different from Frax..but Frax has done their work responsibly
People can select between the two based on their risk profiles
Sam @MakerDAO
Maker DAO has taken the approach of always being over-collateralized, 100%...which is a design different from Frax..but Frax has done their work responsibly
People can select between the two based on their risk profiles
Sam @MakerDAO
9/ On the value of USDC...
"Full collateralization...our customers bring us a dollar, we give them one USDC. They bring us one USDC, we give them a dollar. We have redeemed over $61B. We redeemed over $7B just in the last week."
@reginatto
"Full collateralization...our customers bring us a dollar, we give them one USDC. They bring us one USDC, we give them a dollar. We have redeemed over $61B. We redeemed over $7B just in the last week."
@reginatto
10/ Would Visa use stablecoins?
"Our focus is on the fiat-backed geocurrencies...generally speaking...not every stablecoin project is created equally...we need to understand the risk profiles of each project...when it comes to stables, what are the safeguards?"
@catgu_
"Our focus is on the fiat-backed geocurrencies...generally speaking...not every stablecoin project is created equally...we need to understand the risk profiles of each project...when it comes to stables, what are the safeguards?"
@catgu_
11/ Would Visa use stablecoins?
"We want to make sure that users can redeem at any point in time...there is education that needs to be done around understanding the risk profiles of each [stablecoin] project"
@catgu_
"We want to make sure that users can redeem at any point in time...there is education that needs to be done around understanding the risk profiles of each [stablecoin] project"
@catgu_
12/ Which stablecoin projects won't work?
"Luna/Terra was the largest ticking time bomb...now that we have this [macro] tightening...it's clear that some projects will be found out...if you are an under-reserved stablecoin...you are painting a target on your back"
@nic__carter
"Luna/Terra was the largest ticking time bomb...now that we have this [macro] tightening...it's clear that some projects will be found out...if you are an under-reserved stablecoin...you are painting a target on your back"
@nic__carter
13/ Sam's (Frax) response
"I agree with Nick...if you build an entirely on-chain stablecoin, you can make a deterministic stablecoin that works"
w/ Frax you can look on-chain & see how much debt is collateralized. The on-chain nature of Frax gives it transparency
@samkazemian
"I agree with Nick...if you build an entirely on-chain stablecoin, you can make a deterministic stablecoin that works"
w/ Frax you can look on-chain & see how much debt is collateralized. The on-chain nature of Frax gives it transparency
@samkazemian
14/ Are any projects immune to traditional markets?
"The truth is, we are fully indexed to what is happening [at the macro]..." @nic__carter
"When you are operating at the scale of billions...[real world assets] are the only way forward for [dec stables at scale] Sam @MakerDAO
"The truth is, we are fully indexed to what is happening [at the macro]..." @nic__carter
"When you are operating at the scale of billions...[real world assets] are the only way forward for [dec stables at scale] Sam @MakerDAO
15/ On regulation...
I want to think that regulation is going to be positive. What we've seen over the past couple weeks is that consumer protection is a very important thing.
@reginatto
I want to think that regulation is going to be positive. What we've seen over the past couple weeks is that consumer protection is a very important thing.
@reginatto
16/ On the benefits of digital currencies...
First, we need to start with the consumer benefits of stablecoins and not from the solution itself
We need to build interoperable experiences so people can easily move their currencies across platforms
@reginatto
First, we need to start with the consumer benefits of stablecoins and not from the solution itself
We need to build interoperable experiences so people can easily move their currencies across platforms
@reginatto
17/ On the benefits of digital currencies...
"We are trying to derive utility and value coming from these stablecoins. In my day to day work, I spend a lot of time talking to central banks to understand what these stablecoins are going to be used for."
@catgu_
"We are trying to derive utility and value coming from these stablecoins. In my day to day work, I spend a lot of time talking to central banks to understand what these stablecoins are going to be used for."
@catgu_
18/ On the benefits of digital currencies...
"One of the key metrics [for Visa] is the size of the developer community in crypto. These are the people who will stay in the ecosystem when the market turns down."
@catgu_
"One of the key metrics [for Visa] is the size of the developer community in crypto. These are the people who will stay in the ecosystem when the market turns down."
@catgu_
19/ On the benefits of digital currencies...
"The key is interoperability...we will have new payment rails...to enable this, we need solutions that allow seamless flows to be happening."
@catgu_
"The key is interoperability...we will have new payment rails...to enable this, we need solutions that allow seamless flows to be happening."
@catgu_
20/ On the benefits of digital currencies...
What do people want from stablecoins? Transactional autonomy, privacy, digital cash.
We have to look to the stablecoin industry for that...
@nic__carter
What do people want from stablecoins? Transactional autonomy, privacy, digital cash.
We have to look to the stablecoin industry for that...
@nic__carter
Thank you for tuning in to this thread on stablecoins (which is a hot topic these days)
Check back later for more of my threads from #Permissionless2022 by @Blockworks_
Check back later for more of my threads from #Permissionless2022 by @Blockworks_
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