Thread by @ETH_Daily

[Part 1] Over-collateralized Stablecoin and something you should need to know about it

#stablecoin $DAI #DeFi

Over-collateralized Stablecoin is the second most popular stablecoin in the market.

• In order to issue $1 in form of Over-collateralized Stablecoin, users must collateralize an amount of assets with a value GREATER than $1

For example

• DAI is a stablecoin issued by @MakerDAO

• In order to have 1 $DAI in the market, users need to collateralize other cryptocurrencies that are worth greater than the amount of DAI issued (1.2 $USDC for instant)

@MakerDAO • @CurveFinance is among a number of well-established DeFi protocols commonly referred to as big-cap, these include @AaveAave, Maker DAO, @compoundfinance, and @Uniswap.

@MakerDAO @CurveFinance @AaveAave @compoundfinance @Uniswap • Of these, Maker DAO demonstrated the potential for a native stablecoin to drive revenue for a protocol.
As a result, Aave announced earlier this year that it will also launch a USD stablecoin named GHO