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mev-toolkit/defi_and_trading/stablecoins
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bt3gl 8d6dcd0fc6
🥓 add stablecoin list
2022-10-07 13:34:57 -07:00
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Curve.md
🥓 rename the merge to nodes
2022-09-23 20:50:59 -07:00
README.md
🥓 add stablecoin list
2022-10-07 13:34:57 -07:00
UST.md
🥓 rename the merge to nodes
2022-09-23 20:50:59 -07:00

README.md

💰 stablecoins


Screen Shot 2022-10-07 at 1 32 54 PM

tl, dr


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.

resources