You all should watch this and learn before they turn their aim towards Cardano.
(For video scroll to the bottom)
Stable Coins are a trojan horse that disguises in crypto technology, yet their goal is to centralize and control.
Vitalik has already conceded that Ethereum will be directed by stable coin companies in the future (good bye decentralization, I guess… ). Source:
Other chains like Algorand, Solana, Stellar, Tron, Hedera, Avalanche, Flow and Polygon are already being actively managed and taken over by these consortiums.
Their ability to just print money and exchange it for crypto (any crypto) gives them ability to attack any chain from with in.
Don’t participate in corporates stable coin expansion. Keep Cardano clean of these cross bridges of fiat pollution. Support Cardano native algorithmic coin experiments so we can find an alternative to fight these “Fiat in Crypto Clothing” attacks.
Now for the video : (if you stop before 20 minute mark you may miss the big picture)
Isn’t the problem given there for stablecoins, also a problem for every other tokenised project, DAO, exchange, …?
If there is a contentious hard fork (something totally different than “our” hard forks which are not even forks if everything goes smoothly, just upgrades), every other project has to decide which of the forks to support, if they want to give the same utility on all of them, if they want to divide the “real life” profits between all of them, equally, by market share, …
And stablecoins can really only support one of them. Since they are supposed to be backed by real money, they can’t just multiply that backing to give equal rights to the coins on all the forks.
… and this is also a problem for algorithmic coins. If I own 100 DJED before a contentious fork, does that somehow double to 100 DJED on aCardano and 100 DJED on bCardano after the fork? By whom will that doubling of the wealth of algorithmic stablecoin holders be paid?
There is also a bit of a centralised component in it. The algorithmic stablecoins – at least the ones of DJED-like types – need an oracle giving the exchange rate to the contract. They haven’t said that much about it, but doing that completely decentralised is probably too hard to implement. So, the creators of that algorithmic stablecoin do have the power to only continue to operate the oracle on bCardano, which would leave the DJED on aCardano in a pretty undefined state, probably letting it die.
No.
Unlike many other tokens (almost all of other tokens at the moment on Cardano) stable coins have a full ecosystem running and supporting them. Also, unlike most other tokens that only exist on Cardano, stable coins don’t have an incentive to support growth, decentralization and even existence of any network.
Stable coin issuer such as UST or USDC can decide that shutting down one chain and migrating users and TVL to another chain is more inline with their goals (such as profit, cost reduction, proprietary consideration, competition, etc…) While most other tokens that exist just on Cardano have in line goals with Cardano itself. Such as growth, adaption, continuity of the system, etc…
Most stable coins are corporations that have very different goals then block chains they are on.
It could become a problem if those stable coins become corporations as well. Although, if they become competing corporations that slightly reduces the problem.
I didn’t want to specifically name DJED since I feel there are many unresolved issues in design they are implementing. However, creating competing models to USDC and UST is what is needed.
I still don’t consider DJED decentralized since you need to be accredited investor and KYC for initial SHEN participation. Plus, bunch of other issues that are separate DJED topic on their own, so I won’t go into details.
However, DJED is less centralized then USDC or UST since no one can stop/freeze/remove DJED from the ecosystem like USDC or UST can. It is a step in right direction.
True.
However on Cardano we just had contentious fork that was contended pre-fork by choosing to adapt or not node 1.35.3. Stable coin issuers can influence users and exchanges to reject such adaptions by openly not supporting such upgrades. So the question becomes upgrade and loose 100 billion of TVL or don’t upgrade (just an example and there are many scenarios such as this).
). Source:
: (if you stop before 20 minute mark you may miss the big picture)