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Report on Stablecoins [pdf]

home.treasury.gov

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Re: Report on Stablecoins [pdf]

#331

Post by Igelau »

spir wrote: post #202
TomSwirly wrote: post #194

Earlier quoted context omitted.

> 100x better than existing solutions. And after ten years, there isn't one actual application of cryptocurrencies except for speculation and crime.

I'm with you, where are the actual applications? I'd say this criticism was mostly fair up until about two years ago. Within the last two years, the actual applications have flourished. For example, have a look through this list https://defipulse.com/ If you remain skeptical, that's fair. The good news is, Ethereum is reaching adulthood this year by switching to proof of stake and launching the web of layer-2 network…

Let's have a look at the top five.

> a decentralized credit platform

> a decentralized exchange liquidity pool

> an open source, decentralized, non-custodial liquidity protocol

> a smart wallet with an intuitive interface built on top of popular DeFi projects

> an algorithmic money market protocol

This is a circular argument for the utility of dApps. There's nothing here for someone who isn't already interested in cryptocurrency.

Re: Report on Stablecoins [pdf]

#332

Post by spir »

rory wrote: post #282
spir wrote: post #202

Earlier quoted context omitted.

I'm with you, where are the actual applications? I'd say this criticism was mostly fair up until about two years ago. Within the last two years, the actual applications have flourished. For example, have a look through this list https://defipulse.com/ If you remain skeptical, that's fair. The good news is, Ethereum is reaching adulthood this year by switching to proof of stake and launching the web of layer-2 network…

I've tried to remain open minded for a long time on this issue, but honestly that list still looks really bad. At a glance, all the top companies seem to only be useful for coin trading/borrowing/lending/financialization. Do you have any example of a use case with traction that serves a need not created by the existence of the cryptocurrency market itself?

For example, Eco is a non-crypto app that seeks to compete with CashApp, Venmo, and Apple Pay.

Although Eco is a fully non-crypto app, it is built on top of crypto rails.

Eco offers its users greater savings rates than traditional banks by using crypto to literally cut out the middlemen.

As well, Eco accounts are not FDIC insured-- but, I think that's a temporary downside of the current regulatory landscape. It seems like there's no reason why Eco accounts couldn't be FDIC insured in the future. Happily, the benefit of cutting out the middlemen is forever.

https://www.eco.com/

The Eco team has written a lot about their experience disintermediating banks. I recommend their blog https://www.eco.com/blog

Re: Report on Stablecoins [pdf]

#333

Post by hanniabu »

dragontamer wrote: post #48
Animats wrote: post #47

This is good. The backing of stablecoins is a very real issue. As the Treasury points out, there's a very real possibility of a run. Two stablecoins have crashed so far, SafeDollar SDO, and $TITAN. They went all the way to zero. Can Tether survive a net outflow? Probably not. They don't have the collateral. Dai is really a derivative of Etherium. Dai is backed by Etherium at 150%. So value in Dai is at risk if the pr…

> The real question is what happens in the next recession. Well, there was a recession just last year and the stock market / BTC market went crazy. The real question is what happens in the next market downturn (specifically the cryptocoin market downturn, since these "stablecoins" look like they're "stable" only because of assumptions underlying the cryptocoin markets). The cryptocoin markets don't necessarily match…

> what happens in the next market downturn

It's happened a few times before and they're fine

Re: Report on Stablecoins [pdf]

#334

Post by midev »

sanderjd wrote: post #297
lvl100 wrote: post #217

Earlier quoted context omitted.

This is just pathetic.

Which part? Could you say more? If you make a comment like this, I feel like it should be obvious what you mean, but it isn't at all obvious to me in this case.

The part where they said 10 years later there is still no actual applications or use, and someone responded with https://defipulse.com/

I think if a self-proclaimed crypto expert gives you this link as proof of use cases, you would walk away thinking the technology was pathetic.

Re: Report on Stablecoins [pdf]

#335

Post by RustyConsul »

tevon wrote: post #327
arcticbull wrote: post #293

Earlier quoted context omitted.

> Doesn't it seem weird that through this complex system of interactions, we can recreate all of that in Code? All of these systems are already software. > If there was no value in it, why did we create all those institutions in the first place? Centralization makes them massively more efficient than crypto. If there was a way to make them more efficient that did not involve throwing risk models out the window or reg…

I completely agree with this; the prior example given for bitcoins value (that it is used in defi for flash loans, etc) is literally deriving its value from moving value around (internal to the crypto ecosystem). Flash loans are used to arbitrage across exchanges, not create any extrinsic value.

Yeah! Isn't it fantastic? You solve the double spend problem you have in traditional finance!

Due to this emergent phenomena of smart contracts you can have very low slippage between exchanges, high liquidity and high yields.

A.K.A Every stock market financiers dream.

Re: Report on Stablecoins [pdf]

#336

Post by sanderjd »

InternetPerson wrote: post #266

When people defend cryptocurrencies online, sometimes it's because they're invested in it and they're hoping to get rich. (Only a real Sherlock Holmes could notice something this subtle. I eagerly await my upvotes!!)

This strikes me as a catch-22. People who research cryptocurrencies / blockchains and conclude they are promising technologies are likely to both invest in them and also tell people they are promising. But that doesn't tell you anything about the direction of causality. It could be either "I invested in them so I tell people they're promising" or "I think they are promising so I invested in them".

I remember investing in Microsoft in the 90s and Apple when the iPhone came out and also telling lots people that I thought Windows 98 was really great and that the iPhone was a huge deal, but the primary reason I told people those things was not because of my investment in the stocks, rather I invested in the stocks because I thought those things were true.

Re: Report on Stablecoins [pdf]

#337

Post by annoyingnoob »

dcolkitt wrote: post #265
chizhik-pyzhik wrote: post #125

Earlier quoted context omitted.

This is a very good point. The risk profile of centralized stablecoins like Tether and USDC is way, way different from something algorithmically controlled like DAI.

This shouldn’t be surprising. Permissionless systems often innovate orders of magnitude faster than permissioned systems. So many of these threads are filled with comments of the form “well why do we actually need a blockchain for that? Can’t we just do the thing with centralized databases?” But the point is after 50 years the centralized databases haven’t built those systems. Smart contracts, and instant finality tr…

> They remove the responsibility of a centralized administrator if shit hits the fan.

I'd argue that they remove the liability of a centralized administrator but not necessarily the need for administration. This is why you see coins/tokens with some kind of voting scheme. Will be interesting to see if at some point in the future we see voting rights as presenting a liability.

Re: Report on Stablecoins [pdf]

#338

Post by Igelau »

spir wrote: post #226
lvl100 wrote: post #217

Earlier quoted context omitted.

This is just pathetic.

There's a large subset of the talented people on HN that were wrong about crypto years ago-- they couldn't see that the casino and the innovation are, unfortunately, inseparable-- and many now cling to their original incorrect points of view, even as crypto is clearly changing the world like the internet did in the 90s and mobile in the 00s. I have been full-time in crypto for years. I could write you a 10,000-word e…

> I could write you a 10,000-word essay on crypto's promising use cases. But, I believe that you, and many others on HN, don't want to hear it.

You're already backpedaling from something you haven't even said yet. That speaks volumes.

Re: Report on Stablecoins [pdf]

#339

Post by JohnJamesRambo »

Animats wrote: post #47

This is good. The backing of stablecoins is a very real issue. As the Treasury points out, there's a very real possibility of a run. Two stablecoins have crashed so far, SafeDollar SDO, and $TITAN. They went all the way to zero. Can Tether survive a net outflow? Probably not. They don't have the collateral. Dai is really a derivative of Etherium. Dai is backed by Etherium at 150%. So value in Dai is at risk if the pr…

I hate to be pedantic, but you aren’t spelling Ethereum right.

Re: Report on Stablecoins [pdf]

#340

Post by sanderjd »

sschueller wrote: post #18

If the US would just provide its own stable coin it would kill all other USD stable coins and there would be no more issues. Who would want tether if you can get government backed USD stable coins?

Agreed, a USD CBDC is the right answer, but also seems unlikely to happen.
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