⭐️🩸Catfisk
+ Your AuthorsArchive @Fiskantes joker of all trades * bungee gum possess both properties of rubber and gum Dec. 11, 2020 2 min read

Probably my most controversial opinion: stablecoins are overrated.

We should strive to create independent units of account stable enough to power the economy.

Pegging what should be decentralized and permissionless assets to fiat is suboptimal for 3 reasons:

1. It invites the regulators to scrutinize the space much more, if what we are doing is explicit transfer of government backed currencies. We are playing with the toys of big bully behind his back. We should play with our own.

2. By focusing too much on stablecoins, we are defocusing from parallel money system (which should arguably be the end goal?). Instead we are extending the legacy one, inheriting its weaknesses and slapping crypto native risks on top.

3. Any peg always introduces complexity, which makes systemic risks greater. Having DAI backed by USDC, having Tether being one of the biggest MoE - all are concave trade-offs, increasing tail risks of the ecosystem for short term stability.

THAT BEING SAID:

1. market clearly demands stablecoins, so supply naturally caters to it

2. some experiments go beyond clumsy pegs and are actually doing something that could work well in the long run

3. In short run stablecoins are best way for normies to interact with DeFi

I am using dollar stablecoins too, but I really hope that in the long run crypto will be strong and independent enough for them to bootstrap its own independent money that is stable enough for regular everyday use cases.

Maybe, just maybe...the next generation that is natively digital and used to in-game currencies will don't think that only sensible way to pay for stuff is fiat.

And maybe, thanks to crypto, we won't need any cash reserves at all, maybe we will be able to pay directly with any token/asset/tokenized investment etc. that will be converted to anything that our counterparty prefers on the background.

Currently I can't pay for groceries subtracting the value from my stock portfolio (too much friction, hence I need cash), but if I could I maybe would.

Also, USD is just poor proxy for economically stable SoV, subject to "governance" of the elites.

Instead we can use basket of goods ( https://en.wikipedia.org/wiki/Terra_(currency)  - maybe the endgame of @terra_money ?)

Or some sort of automatic balancing mechanism, like @reflexerfinance


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