One one hand, criticisms of seignorage stablecoins are helping cast light on the structural shortcomings of fiat. On the other, a @nntaleb would say that “what works cannot be irrational.”
Either Bitcoin’s big success or a functional Stablecoin’s big success could literally help people in hyperinflationary nations and even cause the collapse of oppressive / monetarily incompetent regimes... much bigger implications than just trader arbitrage.
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Yes, I agree with the value-proposition stablecoins have; that's not what I'm arguing against. Instead, I'm saying that their argument is unsound because their premises don't hold.
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Also above you said “There might never be a real need for them in the first place” :) Which is provably wrong. My aunt in rural post-USSR with low shit fiat salary & no access to dollar or sophisticated low-risk financial instruments, would love access to a stable store of value.
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That point is contingent on the premise that current solutions will minimize the hypothetical competitive advantages of stablecoins. Your aunt would get access to stable SoV from current solutions.
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Here is my problem with this. If you look at existing, fixed-supply coins as a “product”, then it’s only a good SoV after it’s already huge (3T+?) ... u feel me? Stablecoins (assuming they work) can offer stability even at 50million mcap. The promise is crazy.
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Are you distinguishing here between seignorage and collateralized coins or generally referring to both?
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Whichever works. Non-collateralized is more badass. All money is social consensus.
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Non-collateralized is definitely the scalable approach. Why do you think it is immediately a SoV, even a tiny mc? Imo only collateralized seems to have the appropriate framework for that objective.
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Assuming it works and is more or less stable right off the bat (I know, big if), it provides the “user” the “product” of stability immediately irregardless of its market cap (in theory). Bitcoin is only reliable after trillions...
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