How is there no discussion about FRAX, Maker's DAI, USDC, CRV's 3pool token, Liquity's LUSD, and so many other interesting projects?
The interesting stuff happens when they fail.
And you're missing projects that aren't pegged to the dollar, but instead have dampened volatility floating price targets — like Reflexer and OlympusDAO.
It's a rich, beautiful corner of a rapidly growing space.
I can't imagine what kind of mindset/value-system one has to have to find this stuff rich and beautiful. It's ponzis all the way down. I would call it disingenuous and grubby.
Some of this tech sure eventually will become mainstream in a lot less glamorous and likely more centralized way than crypto enthusiasts like to think, current systems are not perfect certainly, they can leverage more tech, however they also have the benefit of evolving over a long period of time and have gone through the learning curve all the coin markets are going through.
However, without a compete backing the the currency a stablecoin, there is a point at which sufficient supply of the stablecoin cannot destroyed and the peg will break as supply outstrips demand.
When the bubble pops there will be a lot of broken pegs but it most likey won't wipe out every stablecoin.
The only real problem would be a very large drop in a very short period of time, and the big stablecoins already have already survived 50% drops in pretty short time spans.
Good thing that the national debt is also out of control, which kind of restrict Fed's ability to raise interest rates without bankrupting the government.
high interest rates means less growth for any assets as liquidity gets tied/dries up.
Interest rates are cyclical, all high interest rates cause a period of pain and death for semi-ponzi schemes that works during periods of low interest rates.
It is newsworthy when stuff blows up. Same reason SpaceX gets more coverage for its rocket development than say SLS or Blue Origin ( among other reasons). A lot of people watch car racing for the crashes. thats just human nature.
Some are via reserve dollars, some via collateral based on an oracle, some via collateral not based on an oracle, some are tightly coupled, and some are a bit looser.
Some are more centralized than others. Some rely on governance more than others. Some allow themselves to drift further from the peg than others. Some are more complex (and therefore more at risk of failure). There's actually quite a lot going on, and I personally find it pretty interesting, but yeah, at the surface, it's a bunch of coins that trade fairly close to $1.
You find stablecoin's failures interesting. Crypto enthusiasts (which admittedly are a tiny fraction of the people holding cryptocurrencies) do too, while at the same time finding the pegging mechanisms interesting as well
What else can you suggest in order not to prompt this response?
These artificial stablecoins that attempt to get clever with algorithmic finance and smart contracts are interesting because they inevitably collapse when someone pokes the system enough to make it unstable. The strangest part is how it happens over and over again yet people still put money into these flawed algorithmic stablecoins anyway.
- In some countries, swapping crypto to stablecoin (another crypto) has no tax implications whilst swapping to fiat does have consequences.
- For big account holders (not me), stablecoins are the only way to put gains on "dry land". If you win big on exchanges, you can't take it out at once, there's withdrawal limits. It can takes months to get it out, years if really rich. During all this time, your gain may finish if you'd hold it in the original coin, so stablecoins secure your profit in the meanwhile.
Fascinating? No, but definitely important.
Now do MakerDAO.
DAI is not in this category. It is backed by over collateralized loans in multiple currencies, and maintains peg by creating and burning coins in a smart contract.
Even going with your analogy, it makes no sense that this was #1 on HN. Unless it's also true that HN is just weirdly out of sync with crypto.
The hype drives the coins but the only people getting rich are those in early then motivated to tell people to buy. It's a decentralized pyramid scheme and even those work some of the time.
Until the next financial crisis maybe?