, dead on arrival? And should there be regulation in place to prevent a similar disaster?
“The algorithmic stablecoin is a holy grail. If you think about what an undercollateralized, algorithmic stablecoin is, it is printing money out of thin air. There will always be capital chasing that dream in my opinion,” Wu said on an “Unchained”If one person thinks that, others likely do, too. And with somewhat understandable reasons. Wu painted with broad strokes: Stablecoins are necessary to smooth out crypto’s volatility, and if there’s a cheaper way to do that, people will attempt it.
Algos forgo this failsafe and attempt to maintain their pegs through other financial means. UST used an on-chain redemption tool and a related token,, that was supposed to prop up UST’s value based on changing supply and demand. LUNA was burned or minted as UST rose or fell against the dollar. Wu’s back-of-the-napkin math had it that UST users could print a synthetic dollar on Terra for about 20 cents. He compared that with
DanielGKuhn For me, Tether is enough as the best stablecoin.
DanielGKuhn No regulations, please. Let the market sort itself. Regulations serve to increase cost, slow development and innovation, reward laziness and complacency, stifle competition, fill the coffers of the regulators, and exact a few on the consumers.
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