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Regulatory issues are frequent. What decentralized stablecoins are available in the market?

DeFi之道

2023-02-16 10:12

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原文标题：《如何避免 BUSD 之灾？这些去中心化稳定币值得期待》

Originally written by @TheDeFinvestor

The DeFi way

The SEC is cracking down on centralized stablecoins. So it's time to find an alternative to decentralization.

In this article you will be able to learn all about decentralized stablecoins.

The SEC recently announced a lawsuit against Paxos, the issuer of Stablecoin BUSD.

A week ago, the SEC forced Kraken, a crypto trading platform, to shut down its liquidity pledge service.

Whether you live in the US or not, regulations are coming and it's best to use as few centralized platforms as possible.

Contrary to what the authorities claim, their recent actions have not benefited investors or protected them.

The SEC is just trying to kill the industry.

Even if using a decentralized platform doesn't completely protect you from regulation, they are definitely a better choice.

There are currently two types of decentralized stablecoins:

- Over-collateralized: Current assets such as ETH and USDC are fully collateralized

- Algorithmic - These stablecoins are not fully secured and can be minted or redeemed according to a protocol Token

Since the UST collapse of the algorithm stablecoin, stablecoin from the second class have been unable to hold up their heads.

However, Frax Finance is still a significant player in the algorithmicstablecoin space and one to watch.

The problem is that both algorithmic stablecoins and excess collateral stablecoins have to compromise:

- Excess collateral - safer and more resistant, but less capital efficient

- Algorithms -- less resistant but more capital efficient

So far, no stablecoin has been able to solve this trilemma.

But here are some of the most successful decentralized stablecoins:

1. DAI

MakerDAO's DAI is the largest decentralized stablecoin to date.

DAI 可以通过抵押许多蓝筹加密资产进行铸造，包括 ETH、BTC 以及收益型资产。（例如 stETH & Curve LP Token ）

One concern about DAI is that DAI is largely supported by the centralized stablecoin USDC.

If USDC loses its hook completely, DAI will be seriously affected.

That's unlikely to happen, but it's good to keep that in mind.

Another interesting fact is that MakerDAO is heavily invested in real world assets (RWA) and generates over 50% of its revenue from RWA.

2. FRAX

The first part of Frax Finance's FRAX is a decentralized Stablecoin.

FRAX is supported in part by assets (primarily USDC) and in part by stabilization algorithms.

Frax Finance utilizes algorithm-market operations (AMO) to maintain FRAX hook stability and generate revenue.

The team has been building in a bear market, introducing a number of new products that increase FRAX's utility and revenue from the agreement.

In addition to FRAX, Frax Finance also launched a second stablecoin called FPI.

The FPI is a stablecoin linked to the CPI and designed to fight inflation.

3. LUSD

Liquity Protocol's LUSD is the most resilient decentralized stablecoin. It has many features:

- Liquid smart contract code cannot be changed

- Liquidity contracts are accessible through a number of decentralized front ends

- $LUSD only applies to ETH casting

- Clearing is handled through a stabilization pool

In short, no matter how strict the future regulation, $LUSD is unlikely to be brought down.

And thanks to its efficient liquidation mechanism, the minimum collateral rate of $LUSD loans is 110%.

Anyone can participate in the clearing process by depositing $LUSD into the stabilization pool and buying $ETH at a discount.

Liquity is currently available on Ethereum and Aztec networks.

Borrowing $LUSD on Aztec can be done at a very low cost and in complete privacy.

4. sUSD

sUSD 是由 Synthetix 的项目 Token SNX 超额抵押的稳定币。

The SNX pledge casting sUSD receives a percentage of Synthetix's revenue.

The target collateral rate is 400%, so sUSD doesn't scale very well.

But once Synthetix V3 goes live, more collateral types will be available.

5. agEUR

The Angle Protocol's stablecoin, agEUR, is by far the largest decentralised stablecoin linked to the euro.

As you know, the euro/dollar exchange rate fell from 1.21 in 2021 to a bottom of 0.97 in October 2022.

This sharp decline has apparently led to a decline in interest in the euro stablecoin.

But that trend could change now that the euro is rising again against the dollar.

The Angle team built a product ecosystem around agEUR to improve its usefulness.

From a single interface can complete lending, leverage, fiat currency in and out of money and other operations.

6. MIM

This is a decentralized stablecoin, backed primarily by income assets.

Despite a turbulent past, the MIM has managed to maintain its peg to the dollar.

Curve LP tokens, GLPS, and other assets can be used as collateral while still earning a percentage of the collateral yield.

Here are some more stablecoins to come

The real income narrative suggests that people are looking for projects that generate revenue like brick-and-mortar businesses.

To create new revenue streams and improve the capital efficiency of liquidity providers, a number of well-known protocols will launch their own stablecoins:

GHO Stablecoin from Aave (already running on beta Web) crvUSD Stablecoin from Curve Finance (few details about its release) DINERO Stablecoin from Redacted Cartel (backed by ETH flow Pledge derivatives) from Etho Reserve's ERN Stablecoin (released in a few weeks)

One of the interesting ones is that. crvUSD.

crvUSD will use a new clearing mechanism called the Lending-Liquidating AMM algorithm.

Its borrowers do not have to worry about immediate liquidation because AMM will liquidate their collateral over time without charging a penalty.

These are the stablecoin projects to watch out for.

I expect the dominance of decentralized stablecoin to increase over time.

The collapse of many centralized, opaque systems in 2022 once again demonstrates the importance of decentralization.