Thread by @ConnextNetwork

✖️💸🧱

We are witnessing the birth of new stablecoins from Defi's blue chip projects (@CurveFinance, @AaveAave, and others).

Who will gain a competitive advantage by issuing the first natively - secure - crosschain stablecoin?

#xmoneylego

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https://twitter.com/TheBlock__/status/1550268979780136960

First: the design.

Learning from recent experiences, we can expect these stablecoins to probably stick to an over collateralized model to be able to maintain the peg.

2/

A basked of assets already used in those platforms will form the collateral to be able to mint the new stablecoin

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We also learned how the ideal scenario for a stablecoin is when it has some utility and/or low velocity, with users able to spend it in a meaningful way, or willing to hold it in times of turmoil.

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If your stablecoin is minted and immediately swapped for “safer” assets, this applies a mono-directional pressure on its peg that can and will destabilize it.

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What’s a straightforward way to scale a stablecoin utility? Make it xchain.

Be the pervasive medium of exchange across any domain, L1s, L2s.

Be the settlement and arbitrage tool that institutions want to use when moving across the liquidity-fragmented blockchain world.

6/

Combine it with any other primitive on any chain, and make it the asset that people want to hold anywhere:
x💸🧱

So who will issue the first natively - secure - crosschain stablecoin?

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On #security: the most secure way to do this today is via @nomadxyz_ . No other protocol has the ability to pass a generalized message (= mint assets) on any smart chain without keeping your tokens hostage of a multisig of x validators

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Nomad’s optimistic approach keeps the system secure if there is at least 1 good actor (the same Defi projects will one day set up a watch tower to guard the protocol).

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blog.connext.network/optimistic-bri…

Their trade-off is time, as it takes 30 minutes to pass a message.
@ConnextNetwork fast liquidity system now built on top on Nomad overcomes this limitation:
Any stablecoin can be moved securely and in fast way.

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On being natively #crosschain:

The stablecoins issued directly through @nomadxyz_ can be moved on any chain with 0 slippage. 0!

Ultra cheap, secure, xchain transfers for the new stablecoin ✖️💸🧱

That's when the asset becomes universally accessible and therefore useful🤯

11/

The NEXT 🌊 is #crosschain.

So who will issue the first natively - secure - crosschain #stablecoin?

👇

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