How Radix deal with stable coins ? We all know what happened to terra , I assume if Radix wants to be the be backbone of the financial system then it needs to have a stable coin, is there any talk on this, will it be a an over collateralised coin or pegged coin with real world money behind is like usdc ?
So I have seen this question arises frequently, here is the most recent time they addressed it: https://www.youtube.com/watch?v=HXf6Y-H-DeY (07:20)
They go into details so I recommend watching it, but just TLDR:
Stablecoins are hard, that’s why they haven’t launched one yet. Algorithmic stablecoins are particularly hard and problematic, because there is too little contol over them (like LUNA/UST situation). They also address that trades on secondary markets can influence the price too much.
What we know so far, that they are planning and researching to introduce one.
There is also portion of the tokens dedicated to that cause. (2.4Bn): How was the XRD token allocated? | The Radix Knowledge Base
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Stables coins creep me out tbh. Now if there was a gold backed asset on Radix then I would be very interested. Something resembling $PAXG or $XAUT would be awesome. Even before the $UST tragedy I wouldn’t use “stable” coins. If the market was tanking I’d sell 50% of my crypto for $PAXG and set a stop loss. It’s never failed me yet, I’ve actually made a good chunk of change with this strategy. If someone could set something similar up on Radix post Babylon I sure as hell would be happy!
Yeah, I agree. The idea behind UST revealed to be a total failure. In order to obtain a real “stable” coin, you need something concretely stable, like gold, like a real money like usd…not an algorithm.
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100%. People forget just how prevalent gold backing was in the not so distant past. It’s tried and true, unlike like algorithmic stable coins. There was a time in the US where every single dollar was backed by gold in a vault. Not sure if you’re aware but those two coins I mentioned, $PAXG & $XAUT, can actually be redeemed for physical gold. One of them will actually mail it to you.
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Shade protocol re creating an overcollateralized coin that is linked to gold, money, silver ect ect lots of different markets and its overcollateralized so that should be perfct
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I personally would object if radix wanted to create its own stablecoin, as was the case before. from Luna we can conclude it is a very terrible thing. then recently USDD came into MORA, and I think all coins with algorithms can’t hold their set price.
Lastly maybe I think it’s better for USDT to open its network to the Radix mainnet is the wisest and safest choice. Because it will not interfere with the Radix ecosystem directly. and can exchange coins directly for cash via tether. I hope so.
Cheers
I have some thought regading this particular matter:
- What does it mean to be stable, is Gold stable? Is USD stable?
USD: As painful as it had to said, USD is “not stable” (might be on short term, but not on long term). Inflation cause your USD to fall in it’s value, time by time. Eg: from decades ago 1 cent you can buy a bread, but now a bread cost you 1 dollar.
Gold: A store of value asset, it fluctuate very much when compare to the “short term stable USD”, so gold is not a “stable asset”, both on “short term” and “long term”.
Conclusion: Nothing is “truly stable”, it would depend on the “asset” that you would use on your “view point” of “stable”. Eg: In my country, previously I would take “VND” as a “stable asset” but now I learn a lot about “inflation” and “market manipulation”, thus, this type of asset got “out of my stable view point”.
- Necessary good is always stable:
In the topic no.1 I was comparing USD to “a bread”, so wasn’t I just treat that type of asset is a “stable view point” in my case? But as you reading, I know that you also “unconsciously” treated “a bread” as “stable”. So “a bread” can widely accepted as “stable” by most people around the world. “Water” can also be treated the same.
So, if I may, I would use those “necessary good” as a “stable asset” just because of one “fact” that everybody “unconsciously agree”, they are “necessary” for our life. You might not need “USD” or “gold” to live, but you would surely need “clean water” to live.
- A “truly stable project”
A “truly stable project” would need to tokenize those “necessary asset”, maybe “1 WATER” token represent a liter of clean water, or “1 FOOD” token represent a “moderate serving of food for a meal”. This can be achived through a non-profit project like “No more waste food” > volunteer organizations collect waste food, clean and re-manufactured those food into “ready-to-serve form”, got their “FOOD tokens” to sell on market. Later, who need food just buy those token and exchange for a real serving of food,… this is just my speculation from the result of topic 1, 2.
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Yes i think if usdt could come over to the radix network as a wrapped token this would be the best option