Encrypted civil war, the way to defend the "de-USDC" stablecoin

Original author: Jack (0x137), BlockBeats

< /p>

After the Tornado Cash sanctions incident, the encryption circle can be said to be talking about USDC, and people's fear and concern about centralized stablecoins have reached unprecedented levels degree. We found that the economic foundation of the decentralized world has now become the ultimate weapon of regulation against Crypto. (BlockBeats note, "The turning point in the history of encrypted finance: USDCs are countering DeFi" has a detailed introduction to the Tornado Cash incident)

In the past year, the stable currency market has grown several times, of which USDC and USDT alone accounted for nearly 80%, the tentacles of centralized stablecoins such as USDC are all over every corner of DeFi, and decentralization seems to have become a dead proposition for Web3. Despite this, we still see many public chains and DeFi protocols launching their own stablecoin projects. Against this background, can DeFi get rid of the shadow of USDC? Can decentralized narratives be saved?

Encrypted "Big Blue" White Terror

Looking at the current USDC, we can't help but think of the former "Blue Giant" IBM. In the 1970s and 1980s, IBM had absolute dominance in the computer field. From the military to aerospace to finance, and even Kubrick's Hollywood blockbusters, the three letters of IBM are everywhere. The bright blue logo on the screen, the burly and cold appearance, and the invincible industry influence make IBM a symbol of monopoly, centralization and ruling class. Under the leadership of Jobs, Apple set off a new wave of personal computers with the narrative of "anti-IBM dictatorship", that is, everyone should have a personal computer that belongs to them and can be used at will.

Apple 1984 2019 Macintosh personal computer ad, the theme hints at confrontation with "Blue Giant" IBM

DeFi today There are similarities with the stable currency market and the computer industry in the past. In addition to its absolute dominance on centralized trading platforms, USDC’s tentacles have also extended to the liquidity pools and vaults of every DeFi protocol. Currently, the two largest decentralized stablecoins DAI and FRAX, more than half of the collateral is USDC. As long as USDC sneezes, a major earthquake will occur in the entire encryption ecosystem.

Of course, this scale effect and monopoly market position is based on sacrificing Crypto sovereignty based on security and censorship resistance. In order to attract huge amounts of liquidity while maintaining a strong anchor, it is impossible for centralized stablecoins to rely on encrypted assets for endorsement, because they not only fluctuate greatly, but also have a relatively small market value. In contrast, fiat currency, especially US dollar fiat currency, not only has strong liquidity, but also has various abilities to generate income in the real world. The only downside is that it inevitably tightly binds the encryption industry and regulation.

In November of last year, the Biden administration's Financial Markets Task Force, the FDIC and The Office of the Comptroller of the Currency issued a report calling for legislation to limit the issuance of stablecoins and strengthen strict supervision of stablecoins to prevent them from posing "systemic risks" to the economy and financial system. While the stablecoin’s market capitalization pales in comparison to Wall Street’s risky derivatives market, the report nonetheless demonstrates Congress’ determination to defend the U.S. dollar’s fiat currency. Anyone who thinks that the Authority will not regulate the stablecoin track is absolutely wishful thinking.

Responding to the new law’s requirements for the disclosure of reserves for stablecoin issuers, major mainstream Most of the stablecoins have disclosed their wealth.

USDC Needless to say, the first to jump out to disclose. Unlike several other centralized stablecoins, USDC is an open source protocol that allows qualified commercial issuers to access the network to mint USDC, such as Coinbase. The issuer must meet accounting, technical, and operational requirements, and must also support all USDC Tokens with legal reserves and provide monthly reserve certificates. Circle itself also publishes monthly audits of its reserves by accounting firms, while pledging to own only U.S. dollars and short-term U.S. Treasury bills.

Paxos and TrueUSD are also following in the footsteps of Circle, holding high the banner of security compliance. Paxos Trust disclosed its assets backing Binance USD (BUSD) in June, and the report even detailed the identification numbers of every treasury bill and bond held in its reserves, as well as the names of its depository banks.

Paxos official website List compliance and supervision as the main advantages of its stable currency USDP

On the contrary, it is suffering Criticized USDT is very tough on this issue. Although Tether finally released the details of its reserves in March last year, the company has always opposed the disclosure of USDT’s reserve composition, and even asked the New York Supreme Court to prevent the state attorney general from responding to CoinDesk’s Freedom of Information Act (FOIL) request filed against Tether. Even so, USDT cannot escape the iron fist of regulation. According to data on its official website, 40% of USDT’s endorsed assets are U.S. Treasury bonds, forming a profound interest bond with the U.S. Authority.

USDT reserve Gold Composition

In fact, this "interest binding" between centralized stablecoins and Authority It has become an irreversible trend. According to the latest report released by JPMorgan Chase, the value of U.S. Treasury bonds held by stablecoin issuers such as Tethe and Circle has reached 80 billion U.S. dollars, accounting for 2% of the entire national debt market, surpassing Buffett’s Berkshire Hathaway. So to be precise, the real Big Blue is not USDC, but the pair of regulatory hands behind it that operate USDC. The strong willingness to recruit security and the deep-seated interest binding have made the regulation of stablecoins an inevitable foregone conclusion.

In the situation where the Web3 ecology is flourishing, we have forgotten the sword of Damocles hanging over the head of every encrypted user. However, in the past few months, the turmoil in the encryption market has brought great changes to the industry, and the collapse of UST in May has added momentum to the Authority's promotion of stablecoin regulation. In the end, the sword of sanctions fell on Tornado Cash, followed by USDC freezing accounts, and the dream of a decentralized revolution was awakened.

As the largest decentralized stable currency, the DAI community once proposed to clear all USDC positions , replaced by encrypted native assets such as ETH. But as soon as the proposal came out, the same problem ushered in: the endorsement of encrypted assets cannot achieve scale effect. USDC’s endorsement is half of the credit for DAI to get to where it is today. Now it is impossible to get rid of the old owner without casualties. Two days ago, Rune Christensen, the founder of MakerDAO, also published an article explaining the regulatory dilemma faced by DAI and the possibility of ushering in free floating. Personally, if DAI wants to achieve decentralization, it must give up the pursuit of scale effect and greatly reduce the market value.

If you want to be big without failing, you have to make sacrifices. For a stablecoin project to achieve scale, it must currently adopt real-world assets. Relying entirely on encrypted assets will be like DAI in the future, rolling back part of the mortgage system (that is, the deposit reserve system), and even facing the risk of floating. So in the face of the "white terror" of USDC and supervision, is it possible for Crypto to achieve decentralization? DeFi full-stack may be able to give a reliable answer.

DeFi protocol full-stack: assuming you are not alone

< br>

If you think about it carefully, the reason why you need to face the above-mentioned risks is because we assume that DAI needs to bear the entire stable currency and even the encryption industry liquidity, we assume that DAI is still pursuing economies of scale. So what if DAI is not a person? A completely decentralized stablecoin project cannot scale, but if there are dozens or hundreds of decentralized stablecoins that cannot scale, the decentralized stablecoin as a whole may achieve Scale. Now, that vision appears to be coming true.

In the past year, large and small DeFi protocols, and even L1 public chains have entered Some stablecoin tracks even use it as an initial feature, nested in their own ecology. This trend has gradually become apparent as public chains such as Near and Tron and protocols such as Aave and Curve announce the issuance of their own native stablecoins. On the other hand, stable currency projects like FRAX have begun to deploy their own lending platforms and AMMs.

Now, when we talk about the financial ecology in the field of encryption, the first thing that comes to mind is trading, Lending and stable currency "three-piece suit". This combination matrix can be said to be the holy grail of today's encryption world. Whether it is for CeFi trading platforms and asset management institutions, or for DeFi protocols and new husband chains, it is a strategic high ground that must be contested. This kind of competition has penetrated into every level of the encryption field. Unknowingly, DeFi seems to usher in the era of full-stack.

Public chain: Self-made liquidity, seeking ecological independence

< br>

Since UST became famous, examples of public-chain stablecoins have appeared in our field of vision one after another, first is Near Tron’s USN, Tron’s USDD, and now Canto’s NOTE. In fact, regarding the end of the public chain as a stablecoin, BlockBeats previously discussed the Lord of the Rings dream of algorithmic stablecoin: LUNA, there will be no next one UST has also been analyzed. At that time, LUNA and UST had not yet collapsed. For a public chain, the biggest attraction of using a dual-currency mechanism to construct a native algorithm stable currency is undoubtedly the positive price of its native Token. However, when the momentum of “the stability of the public chain” was about to take off, UST experienced a stampede and collapse, and the stability of the algorithm was basically falsified. It became a taboo topic that no one dared to touch in the stablecoin track.

The stable currency project launched after the LUNA incident will definitely bring "Over- Collateralized" words. But we will find that, in addition to improving and emphasizing the stability mechanism, the public chain's pursuit of stable coins has not stopped. In fact, native stablecoins are beneficial to a public chain ecology far beyond the price of Token, but to strive for more sovereign nature for the ecology. Sovereignty here refers to liquidity. For the new public chain, the native stable currency can help it "create its own liquidity", and for the old chain, it can help it get rid of its dependence on external liquidity.

The first is "self-made liquidity". The launch of native stablecoins as an economic incentive is the best choice for new public chains to quickly obtain liquidity. The two best cases here are Luna and Canto. Needless to say, the former has turned on the money printing machine with the left foot stepping on the right foot, which is a veritable self-made liquidity. The latter relied on the lure of NOTE stablecoin mining to quickly attract external liquidity. (BlockBeats note, for the NOTE, see "New Public Chain Canto Ecology: Using Stablecoins for High Annualized Liquidity Mining")

Canto relies on NOTE stablecoin mining incentives, and TVL climbs rapidly

The second is to get rid of external flows sexual dependence. As the source of life of the public chain ecology, stablecoins basically support all protocols and applications in the public chain ecology. However, for now, most of the stablecoins of the L1 public chain are cross-chain from USDC on Ethereum, which makes these L1 public chains double dependent on USDC and Ethereum users, and it is difficult to cultivate their own ecosystem. native users. To get rid of this dependence, or to cultivate native users, the most critical step is to let them use their own stable currency. It is also for this reason that Avalanche chose to cooperate with UST, and Near and Tron chose to launch USN and USDD.

Of course, public chain stablecoins also face many challenges.

The first thing to bear the brunt is the interference with ecological development. Taking Canto as an example, in order to stabilize and promote NOTE, the team must build its own liquidity platform, namely AMM and lending agreement, which severely discourages the enthusiasm of other DeFi agreements that want to develop on Canto. Although the Canto team uses the excuse of "creating a new DeFi public chain", it is difficult to hide this fact. We can recall that in the Luna ecosystem, are there other mainstream lending platforms besides Anchor?

In addition, the launch of stablecoins on the Husband Chain will also face obstacles in mechanism design. Because stablecoins were not considered at the beginning of the design, public chains such as Near and Tron cannot integrate their native tokens, ecological protocols and stablecoins well, and often need to introduce third parties. Near’s USN introduces the Decentral Bank smart contract, while Sun Ge’s USDD directly relies on multi-signature wallets, further introducing moral hazard. (BlockBeats note, for the stability mechanism of USN and USDD, please refer to "Near native stable currency USN analysis: Essentially different from UST" and "Sun Ge's "Dream of Stability": The Fed and USDD")

What is more dangerous is that after the public chain launches the native stable currency, even if the entire ecology is tied to a piece of wood , Once there is a problem with the stable currency, it will face the risk of annihilation of the entire army. The most typical case, in addition to UST, is the recent aUSD theft on Acala. Similar to Canto, Acala hopes to use DeFi as an entry point to become the financial center of the Polkadot ecosystem, so it naturally issued its own stable currency aUSD. However, on the 14th of this month, the iBTC-aUSD pool on the chain was hacked, resulting in the improper issuance of 1.29 billion aUSD, and the decoupling of stablecoins, which has not yet returned to anchoring. For protocols built on Acala that rely on aUSD liquidity, this is undoubtedly a devastating blow, and they are likely to face a similar fate as the Luna ecological protocol.

because of aUSD Abnormal additional issuance, huge fluctuations in Acala TVL, aUSD seriously unanchored

Lending, AMM agreement: Digging a liquidity moat, the fertile water does not flow to outsiders

Compared with the public chain, the DeFi protocol is issued There seems to be more rationality for its own stablecoin. On the one hand, the trading and lending platform itself is the liquidity center of each public chain, supporting most of the TVL of the ecology; loan assets. Therefore, it is indeed a waste of the inherent advantages of the protocol to hand over the considerable income-generating opportunities to other stablecoin minters.

Secondly, many OG DeFi protocols have been carrying the burden of "fat protocol, thin token" for a long time Infamy, combining your own governance Token with the stable currency mechanism may also be a good solution. And with the two largest lending and AMM platforms, Aave and Curve, announcing the issuance of their own stablecoins, DeFi protocols have also launched their own "liquidity defense battles."

Let’s first look at how Aave combines its lending business with stablecoins.

The primary task of almost all lending protocols at the beginning of their creation is to attract as many stable Token liquidity, because it undoubtedly has the greatest demand for lending among all assets, and Aave, the leading lending protocol, is no exception. Despite Aave’s high TVL and liquidity, it’s much better to have your own stablecoin than to depend on whales’ USDC. What's more, most of the income generated by stablecoin lending flows into their pockets.

Since July 7th, the Aave team initiated the proposal of the native stablecoin GHO, and Continue to improve and supplement its mechanism description. As a decentralized stablecoin based on the Ethereum mainnet, GHO, similar to DAI, is minted by protocol users or borrowers. Users provide various aToken interest-earning assets pledged on Aave according to a specific mortgage ratio (BlockBeats live, aToken is an asset pledge certificate on the Aave platform, the price is linked to the original asset and can be traded freely), and then mint GHO. Conversely, when the user returns the loan or is liquidated, the minted GHO needs to be destroyed.

Isolation Mode allows users to use all kinds of assets currently supported by Aave to generate GHO, reduce risk while maintaining sufficient collateral. During market downturns, GHO demand may increase as collateral prices fall, as users start collateralizing non-volatile assets such as USDC to borrow more GHO to repay previous borrowing positions. At this time, Aave will use E-Mode to help these stablecoin holders obtain GHO at a ratio close to 1:1 with zero slippage, so as to stabilize the lending market and prevent the decoupling of GHO.

In order to accelerate the market adoption of GHO, Aave has introduced the mechanism of "Facilitators" . Once approved by Governance, the designated protocol or entity will be granted the right to mint/burn GHO without permission, so that users can mint/burn GHO on other protocols or public chains. Each "Pusher" has a specific "Currency Basket Quota" (Bucket), which is used to stipulate the minting limit of its GHO. Aave itself will be the first "enabler" of GHO.

To some extent, it can be understood as a combination of DAI and MIM, but for Aave Protocol-wise, GHO differs from them in one very important way. Since GHO is directly minted by users through the agreement, all fees and interest generated by minting will not flow to LP whales, but will be directly charged in full by AaveDAO treasury. As the number and frequency of GHO minting/burning increases, Aave will earn considerable income.

< p>

In addition, unlike DAI, GHO's lending rate is adjusted by AaveDAO according to market conditions, in order to pursue higher stability while ensuring the flexibility of the interest rate model. Of course, GHO will also implement the interest rate strategy that the Aave community deems appropriate in the future. GHO also comes with a set of discount mechanism, holders of stkAAVE can pay lower interest rates, mint GHO at a discount rate of 0% to 100%, incentivize more AAVE to be pledged into the security module of the protocol, and further create Market demand. It is not difficult to see that the embedding of native stablecoins can kill two birds with one stone for lending protocols like Aave.

As the leading AMM on the stablecoin track, Curve is not far behind. On August 19, Curve founder Michael Egorov’s Telegram chat records were leaked on Twitter, from which we learned that Curve’s native stablecoin, crvUSD, will be launched as early as the end of this year. Although the team has not announced the details of crvUSD, we can make a reasonable guess based on Curve's unique mechanism. Next, let’s take a look at the benefits of native stablecoins for AMMs like Curve.

Different from GHO, the mortgage mechanism of crvUSD can be played in many different ways.

First of all, Curve is an AMM specially designed for stablecoins, and its existence is related to most small stablecoins The life and death of coins. Its 3Crv liquidity pool, which consists of the three major stablecoins USDT, USDC and DAI, is one of the largest stablecoin pools in the encryption market. At its peak, the TVL exceeded $4 billion. Emerging stablecoin projects only need to combine their own stablecoins with 3Crv pool hook, can rely on Curve's liquidity to survive. Therefore, in the case that the 3Crv pool is not replaced, crvUSD can be anchored with LP Token as collateral and linked to other stable coins, so that Curve can earn minting fees from its own 3Crv liquidity Share more income.

Another way to play is to nest crvUSD into the "Curve flywheel", here is Have to mention Curve War. (BlockBeats note, "Curve War upgrades the CVX battle, the wonderful power struggle continues" has some influence on the Curve War mechanism Detailed description) For a long time, the competition for control of CRV has been a strategic task of various DeFi protocols. By holding more CRV Token, the protocol can obtain higher voting rights to guide more CRV incentives to its own liquidity pool. In this way, on the one hand, the protocol can attract more liquidity, and on the other hand, CRV Token also has greater market demand. However, affected by market conditions in the past few months, the Curve flywheel has been sluggish, and the price of CRV has also fallen to around $1. After the team announced the launch of the stablecoin, there was also various jibes from the community.

Twitter user satirizes CRV price drop to "stablecoin level"

So crvUSD can also use CRV for over-collateralization, and the Curve incentive changes from CRV to crvUSD. First of all, using stablecoins as liquidity incentives is more attractive than tokens with large price fluctuations. Secondly, in order to attract more liquidity, other DeFi protocols must hold more CRV to mint crvUSD, which not only reduces CRV emissions , also provides new upward momentum to the Curve flywheel. Of course, this is only the first attempt of two mainstream DeFi protocols. It will be more interesting when Uniswap also starts to launch its own stable currency.

Protocol Stablecoin: Self-expanding application scenarios and expanding sphere of influence

Although the stablecoin is the fat that everyone pays close attention to, it is only one part of the DeFi three-piece suit. It is absolutely impossible to build an ecology without transactions and loans. In the current stablecoin track, apart from DAI, which has first-mover advantages and network effects, there is no other decentralized stablecoin that can pose a threat to the status of USDC/USDT.

So how does a protocol stablecoin project expand its market share? The answer is simple, is to make your own trading and lending components, such as Frax. After the end of the stable narrative, Frax has become one of the few stablecoin projects in the track that is still related to "algorithms". However, compared with protocol stablecoins such as FEI and USDN, FRAX has always been very strong.

The anchoring mechanism of FRAX is partial mortgage + partial algorithm stability, and the mortgage according to the agreement when casting Ratio (CR), pledge the corresponding assets and destroy FXS, and vice versa when redeeming, so it is also called a hybrid algorithm stable currency. What is more interesting is that when the anchoring of FRAX is relatively stable, the Frax protocol does not open the minting and redemption of FRAX, but maintains the anchoring through the algorithmic market controller (AMO) of the protocol, and users complete it from other AMMs Trading of FRAX with other assets. Only when FRAX fluctuates significantly, will minting/destroying permissions be opened, that is to say, the agreement can only generate income through seigniorage when FRAX deviates from the anchor.

In addition, the Frax team has always valued its position in the stablecoin ecosystem. During the Curve War, in order to compete for Curve voting rights, a lot of CRV and CVX were accumulated. After Luna gained momentum, it teamed up with UST to build a 4Crv pool, trying to squeeze out the position of the 3Crv pool and DAI. After the collapse of UST, not only was FRAX not affected, but it became a powerful force that cannot be ignored in Curve War, controlling the distribution of CRV incentives. Recently, the Frax team has launched a new Base Pool, which is composed of FRAX and USDC in half, and allows other stablecoins to be pegged in anticipation, declaring war on the 3Crv pool again. If you still can’t feel the momentum of FRAX, you can feel its oppression in the picture below.

Curve flow Of the top four in the sexual pool, two are related to FRAX, and the gap with 3Crv is very small

However, although FRAX has extremely high liquidity on Curve, its trading volume cannot match 3Crv at all. The reason is actually very simple. The application scenarios and market adoption of FRAX are not as extensive as USDC, USDT and DAI. Therefore, after accumulating sufficient liquidity, the next step for Frax is to transform from a single stablecoin protocol to a DeFi ecological matrix. Of course, the first two operations are still trading and lending.

Fraxswap

< br>

The Frax team calls Fraxswap a Time-Weighted Average Market Maker (TWAMM), which is a Unlicensed automated product, the core is based on Uniswap V2 version. The main goal of Fraxswap is to help protocols and traders efficiently execute large order transactions to increase the transaction volume and velocity of FRAX and strengthen its anchoring. Operating profits from Fraxswap will be returned to FXS holders.

The core function of Fraxswap is to optimize and complete FRAX's "long-term Order". The long-term order here can also be understood as a bulk order, and Fraxswap includes its process as Order Pooling and Aligning Order expiries in units of hours. Standing orders will always be executed before any other interaction on Fraxswap, and once per block.

< p>

When an individual user or agreement submits a large order to Fraxswap, that is, a long-term order, Fraxswap will decompose these large orders into countless infinitely small sub-orders , and then digested at a uniform rate by the embedded TWAMM. For example, gradually sell 100 ETH in the next 1,000 blocks. It is worth noting that if these individual sub-orders are processed through the ordinary AMM mechanism, it will cost a lot of gas costs, but Fraxswap's embedded model effectively avoids this defect.

Over time, the execution of a long-term order will make the corresponding asset on TWAMM The price is gradually moving away from its price on other AMMs or CEXs. When this happens, Fraxswap will allow arbitrageurs to trade against TWAMM in order to bring prices back to normal, ensuring good execution of long orders. For example, when long-term orders for ETH on Fraxswap are cheaper than on Uniswap, arbitrageurs can buy ETH from TWAMM and sell it on Uniswap for a profit. Of course, to achieve this kind of arbitrage, it must be done by holding and trading FRAX stablecoins.

Fraxlend

< br>

Fraxlend is an open lending platform of the Frax protocol, allowing anyone to create a lending market between any pair of ERC20 Tokens, as long as the Token There is data support from Chainlink. Each Token pair is an independent, permissionless lending market where anyone can use these assets for collateralized lending.

< p>

Through Fraxlend Pair, the lender deposits its own ERC20 assets into the lending Token pair and receives the corresponding interest-earning fToken certificate. fToken will accumulate interest over time, and the longer the time, the more underlying assets can be redeemed. The borrower provides mortgage assets to the Token pair and lends the underlying assets. The interest rate of the loan will be converted into underlying capital and paid to the lender when the fToken is redeemed.

What is more interesting is that each token pair on Fraxlend can use different rates Calculator (Rate Calculator) for deployment. The contract will calculate the interest rate based on the depth of funds that can be borrowed. The deeper the loan funds or the lower the demand, the lower the interest rate, and vice versa. In addition, Fraxlend also allows users to create custom term sheets for OTC debt structures, such as maturity dates, restricted borrowers and lenders, partial mortgages, and limited liquidation.

Although at first glance Fraxlend does not have much connection to its core stablecoin business, we carefully If you think about it, you will find out the mystery. Although Frax supports lending between any Token pair, stablecoins are always the most sought-after commodity on all lending platforms, so who will be the biggest beneficiary in competing for the fat of stablecoin lending on their own territory? The answer is obvious.

Actually, Frax is not the first to broaden the scope of its own stablecoin by creating an ecological effect Application scenarios and projects adopted by the market, in this regard, UST is the best case. Of course, this is talking about its mechanism aside. LUNA/UST existed before the rise of the public chain narrative. At that time, Terra was looking for offline e-commerce retail for the narrative of UST. As a result, the market did not buy it. Its real rise came after Anchor, and the team built it around DeFi. application ecology.

Multi-Stablecoin Future

< p>

The challenge facing decentralized stablecoins today is that without the support of other DeFi protocols, they cannot obtain liquidity and economies of scale. However, after Aave and Curve launched their own stable coins, and FRAX moved towards the DeFi matrix, the full-stack of the DeFi protocol is gradually solving this problem. New, fragmented decentralized stablecoin projects can gradually break down the regulatory risks facing DAI and reduce USDC's influence in the DeFi world.

Of course you may say that this strategy has been tried in the market, and scattered small calculations are stable The stakes are high, and most projects don't survive in the end. First of all, it needs to be emphasized that many stablecoin projects in the past emphasized the word "stable", and in the end, most of them failed to survive. Therefore, this is more of a mechanism problem.

Secondly, this does not mean that every stablecoin project must achieve complete decentralization change. The purpose of developing multiple decentralized stablecoins at the same time is not to completely get rid of USDC. After all, the market value of encrypted assets is still small, and it is impossible to achieve this. But we can reduce the influence of USDC in each stablecoin project. For example, if we make 100 stablecoins at the same time, the USDC endorsement of each project can be greatly reduced. Even if part of the mortgage is rolled back, there will be no serious systemic risk. .

In addition, the distributed liquidity of stablecoins has another advantage, It is to be able to restrain the impact of giant whales on the market to a certain extent, just like the connected and independent compartments on a freighter, which can slow down or even prevent the continuous influx of seawater when a disaster occurs. Of course, this also depends on the complementarity and support between various stablecoin projects, but I personally think that the future decentralized stablecoin must take the road of partial mortgage, and regard USDC as a real-world risk asset that may be frozen at any time.

< p>We must admit that USDC will not disappear, and the future encrypted world will be divided into two factions: the "regulatory majority" represented by USDC, and the "decentralized minority" represented by DAI. But this does not mean that we cannot realize the vision of decentralization, especially under the influence of the DeFi full-stack trend, this vision is becoming a new possibility, that is, a "Multi-Stablecoin" decentralized future.

欢迎加入律动 BlockBeats 官方社群：

Telegram 订阅群：https://t.me/theblockbeats

Telegram 交流群：https://t.me/BlockBeats_App

Twitter 官方账号：https://twitter.com/BlockBeatsAsia