![]() To some, stablecoins are a boring innovation, especially when they may be looking to escape the perils of the US dollar for a more sound, transparent monetary system as promised by Bitcoin. While stablecoins may also be designed to track the price of other underlying assets such as gold and other exchange-traded commodities, this report will focus on stablecoins linked to the US dollar, the most common use of stablecoins today. Stablecoins are digital representations of other assets for use on blockchains and in the crypto economy. New stablecoins products continue to emerge with innovative features, but potential users should be prepared with a risk assessment framework while conducting due diligence for each offeringĬomprehensive regulatory regimes overseeing stablecoins could soon be established across major global economies, which will have significant consequences for the issuance, redemption, usage, and adoption of stablecoinsĭespite recent stablecoin failures and macro headwinds, the evolution of stablecoins is not slowing, and the stablecoins that endure the toughest challenges are likely to gain share and thrive On-chain transaction data and price histories provide meaningful insights to assess the resilience and usage of each type The collapse of Terra USD (and all the failures of other algorithmic stablecoins before it) has led most protocols or platforms behind algorithmic stablecoins to fundamentally alter their designs to more collateralized models ![]() MakerDAO’s DAI has emerged as the leader among “decentralized” stablecoins, but its current form has deviated significantly from its original vision as it has become significantly reliant on USDC for stability, leaving much to be desired Tether, the long-standing leading stablecoin by market value and volume, has endured a long history of criticisms but its market dominance has eroded rapidly in recent months, mostly to the benefit of Circle’s USDC Stablecoin designs largely fall into 3 main categories (fiat-backed, overcollateralized, and algorithmic) – each of which comes with different advantages/shortfalls, stability mechanisms, and competitive dynamics We provide a risk assessment framework for evaluating the many stablecoins available in today’s market and share our outlook for how stablecoins will progress.Īt a $150bn+ market cap, stablecoins have become an increasingly important part of the crypto economy It covers the major stablecoins in existence today and explains the designs and stability mechanisms used, details the competitive dynamics of each type, and analyzes their stability and usage. ![]() This report explores dollar-pegged stablecoins, providing a comprehensive overview of their evolution over time. Risk Assessment Framework for Stablecoins Stability mechanism of algorithmic stablecoinsĪnalysis of the different categories of stablecoins Main Concerns with Overcollateralized Stablecoins Stability mechanism of Overcollateralized StablecoinsĬompetitive Dynamics of Overcollateralized Stablecoins Financial Analysis of Fiat-backed Stablecoins
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |