110 sats \ 2 replies \ @SHORT_TSLA 23 Aug 2022 \ parent \ on: Ask SN: Decentralized stablecoins on lightning bitcoin
There are multiple ways.
Stablesats uses a derivatives strategy, so there is no "issuer" per say.
Overcollateralized stablecoins are backed by collateralized debt positions owned by users.
Algorithmic stablecoins are a synthetic asset backed by a set of incentives to keep the peg.
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0 sats \ 1 reply \ @NachoKeys 24 Aug 2022
Thanks but I thought Terra/LUNA showed perils of algorithmic pegging? Someone figures out how to exploit something unforeseen and it's over.
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0 sats \ 0 replies \ @SHORT_TSLA 24 Aug 2022
Yes, but there are non-algorithmic overcollateralized stablecoins or semi-collateralized semi-algorithmic (like frax).
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