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Comment by TheCoelacanth | Hacker News Reader

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.

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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.

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.

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.

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 $

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?

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