200 sats \ 2 replies \ @037447d9ca 23 Feb 2023 \ on: Thunderboise (pronounced like the city Boise) bitcoin
What you say is true for centralized tokens, but for decentralized stablecoins it's a different story.
Tether is just an IOU, and everybody who holds it is at the whim of being rugpulled at any time. The centralized nature of it makes it so that malicious actors are going to try to manipulate it.
Decentralized stablecoins are a whole different beast: backed by hard cryptocurrency and inmanipulable by design they truly have the power to trojanize USD by putting the monetary expansion closer to the people.
Examples of stablecoins that meet this properties are the first version of DAI(SAI), Liquity and its RSK fork: Sovryn Zero.
Anyone can put bitcoin into a smart contract and print USD tokens, it's like free money.
OTOH Tether can also go brrr at any time and print free money, and they do: https://www.kalzumeus.com/2022/11/11/tether-required-recapitalization-again/
There's no such thing as a decentralized stablecoin. If it has a stable price, it's because it relies on an underlying value. In this case it's a derivative of debt (because fiat is debt). I'd never touch a stablecoin that wasn't regulated and backed 1:1 in reserves custodied by a chartered bank, same as I wouldn't touch a company stock that wasn't listed on an exchange and regulated by the SEC. No legitimate business will ever accept a counterfeit dollar, and they shouldn't. And the US government will never allow them to significantly proliferate. And they shouldn't. Bitcoin is the decentralized money. Stablecoins play tag with sovereign debt, and if anyone wants to play that game, they should follow the rules, and not try inflating the currency that they complain inflates too much.
reply
There's no such thing as a decentralized stablecoin.
I have given concrete examples of decentralized stablecoins backed by bitcoin: smart contracts that issue tokens redeemable for 1 dollar worth of btc.
I'd never touch a stablecoin that wasn't regulated and backed 1:1 in reserves custodied by a chartered bank
Backed by what? Why do you trust banks and regulations more than a smart contract?
reply