Git-Mirrors/mev-toolkit
1
0
Fork 0
mirror of https://github.com/autistic-symposium/mev-toolkit.git synced 2025-05-01 22:36:16 -04:00
Code Issues Projects Releases Packages Wiki Activity
mev-toolkit/DeFi/stablecoins
History
BT3GL /baɪtɡɝɫ/ 9d5cd39cdf
add some notes on stablecoins
2022-04-27 07:15:39 +04:00
..
Curve.md Create Curve.md 2022-04-23 07:38:46 +04:00
README.md add some notes on stablecoins 2022-04-27 07:15:39 +04:00
UST.md Create UST.md 2022-04-23 07:38:03 +04:00

README.md

💰 Stablecoins


Fiat-collateralized stablecoins

  • Fiat-collateralized stablecoins are stablecoins that are backed by fiat currencies like the US dollar.
  • Their reserves are held by a central entity. The most popular fiat-backed stablecoins at this time are USDC, USDT, and BUSD. 
  • The main weakness of fiat-collateralized stablecoin is centralization as the collateral of a fiat-collateralized stablecoin is held by one independent party.

Cryptocurrency-backed stablecoins

  • This motivated the development of more decentralized, cryptocurrency-backed stablecoin.
  • The main player in this category today is MakerDAO’s Dai stablecoin.
  • While crypto-backed stablecoins are good for their decentralization, they are capital inefficient. '

Decentralized (algorithmic) stablecoins

  • The average consumer or institutional investor would rather mint 1:1 through a centralized fiat stablecoin than have to over-collateralize by at least 150% to issue a decentralized stablecoin.
  • For this reason, developers set out to create non-collateralized (or algorithmic) stablecoins.
  • These coins maintain their peg without having to directly collateralize the issuance.
  • The two largest forces in the market in this category are Terra and Fei.