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Comment by sumeno | Hacker News Reader

I agree, there is no such thing as a stablecoin

But there could be, right?

It’s just that actually backing your PLNC 1:1 with actual Złoty[0] you can actually retrieve, leaves very little room for the people behind the coin to get rich.

[0]: https://en.wikipedia.org/wiki/Polish_złoty

Why would anyone bother running a real stablecoin? Even real banks don't maintain 100% reserves, because if they did there would be no way for them to profit.

In the US, banks also pay FDIC insurance premiums. A stable coin could run the same way - buy insurance on the portion of the deposits that they gamble with.

Wouldn't really work. Stablecoins operate in highly correlated markets, so if one goes down then presumably, others should go down.

Also, the government is a highly diversified insurer that can create more the underlying asset it is insurring.

> Stablecoins operate in highly correlated markets

Do they have to? Is there any reason they couldn't hedge that money?

Yet again cryptocurrency advocates independently rediscover why financial regulations exist and are good

It reminds me of junior devs reimplementing existing functions thinking they'll be faster just to discover that they're either slower or not completing the task, but instead of losing a few hours of work we're playing with billions of $

Because it would be fun ?

If I wasn’t fully occupied with rsync.net I would love to run some kind of utility exchange/market/bank service …

… and I’m not involved or invested in crypto in any capacity.

That would be a very expensive hobby.

Because once you've deployed the smart contract, you don't need to run it anymore, it's just out there for everyone to use. That part is actually interesting about smart contracts (but unclear why it would attract so much VC interest).

The Liquity stablecoin actually works that way, they don't even have an own web app.

Maybe someone should make a stablecoin that aims to trade $1 to $.9999 and the operators take their cut purely for auditing and maintaining the backing.

Thus a true backed stablecoin where the operators have proper incentives.

Or you could run it exactly 1:1 with 7 day redemption- and charge varying extra percentage fees for faster redemption…

Sure, that'd be cool too. Basically just make the incentive not about using the backing to gain money.

That's a unicorn that doesn't exist because after you set up your Proper Incentives and take it to the Proper Government Agencies to get Proper Approval, they'll tell you "no". Then the project gets shut down and you get back in line to wait another 5 years for government regulations to maybe happen.

And that's how you get sketchy companies in Bermuda holding $100 billion in Schrodinger's assets, as well as other oddities like mining companies holding billions in assets because an ETF holding billions in assets would be illegal.

Tether kind of already does this by taking a cut on redemptions.

Wrapped coins are actually stable, aren't they? You get one for one, and both sides are on a blockchain.

In real life there's no stablecoin. Even fully backed deposits can be traded at some other amount than 1:1, for whatever reason. Totally depends on whether you actually think the exchange can be done, and there are various reasons it might not.

DAI would like a word.

DAI is not backed by dollars, it is backed by other cryptocurrencies

Still stable even with a drop from 1400$ to 80$ ETH in 2018.

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