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Comment by schemescape | Hacker News Reader

Well, Tether hasn’t imploded (much to my surprise).

Are you thinking of algorithmic stablecoins?

Just an honest question. I'm not terribly familiar with the space, so I'm happy to be shown a counter example. Thank you

Fiat backed (hopefully :-): USDT, USDC, PAX Dollar (by paxos the same company behind pyusd)

Crypto backed: DAI, LUSD (backed by ETH), crvUSD, FRAX

EURO based (with full e-money licenses): EURe (monerium.com), EUROe (euroe.com)

Maybe a dumb question but what’s the point of a fiat backed coin? Is it a faster Venmo?

It’s programmable, meaning you can use it for smart contracts. A common smart contract use case is dex smart contracts that let you swap between other cryptos and usd without any counterparty risk.

You can also program money. What do you think paypal is?

PayPal is a closed ecosystem that doesn’t support smart contracts or any other form of arbitrary code execution. If your point is that traditional finance uses code, sure, but that disguises the real differences between those systems and web3.

USDT and USDC would be the two biggest examples by market cap, though USDT has been mired in... "controversies", and USDC almost got hit by the US Banking Panic this year,

USDC definitely got hit as it depegged from the USDC for few days and traded for $0.87 at some point, it didn't "explode" (and it restored its peg) only because the US government promised to bail out customers of the Silicon Valley Bank fully and not just upto $250,000 as it would be the case if in an usual FDIC coverage situation. Circle, the company behind this stablecoin had about $3.3 billions in SVB.

I don't think that's the case for USDC from Coinbase.

What do you mean? USDC is issued only by Circle. It does have close ties with Coinbase.

Yet.

You forgot that part. Tether is stable… for now.

That goes for all currencies though. After the Brexit and the possible Grexit, a possible Euro collapse had me worried.

Note that I'm not defending Tether. I have no use for it, I'm just pointing out a bigger picture. The solution is to spread savings across different asset types.

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