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1) A good point someone brough up recently: really 'stablecoin' is used to mean multiple different things.

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Just as the outside view skeptics predicted, during a large market move a stablecoin blew out. Just not the stablecoin they predicted. Which was predictable, if you knew the details. This isn't a comment about good vs bad--it's about how important it is to know the details!

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2) One thing it can mean is "stablecoin backed 1:1 by USD in a US bank account". That's what current drafts of US regulations are looking to license, as a first step.

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3) Another is "stablecoin backed >= 1:1 by liquid debt assets, treasuries, and USD". Non-zero price risk, but generally they stay very close to $1 because they can be redeemed. E.g. USDT has stayed within a few % of $1 during this crash, and hearing $1b+ successfully redeemed

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4) A third is "stablecoin backed >= 1:1 by a very volatile asset". Those are 'algorithmic' stablecoins. If the underlying crashes they can go down. A lot. e.g. UST.

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5) Really we shouldn't use the same word for all of these things. What we call 'algorithmic stablecoins' aren't really stable in the same way that fiat backed stablecoins are. They're more like structured products, and they need upside if they want to justify the risk.

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6) This might not seem as important to people in crypto, because we already know that algo stablecoins are pretty different from fiat backed ones. But in the policy space, that message often gets lost. We need to be explicit about it.

9:37 AM · May 12, 2022Twitter Web App

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Save the market, thank you :)

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@longandthesh0rt

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So well said, distinction is needed

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the same misconception re:counterparty risk is gonna happen with wrapped eth vs wrapped btc

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@CryptoDoge9527

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SHIB

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@Teaching_Crypto

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100%

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How do we clarify this to the regulators? Is there any hope for them to understand the nuance?

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Question, why did you add these products? Endorse them if they had unstable mechanisms?

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Family First! Hold and DCA

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Do not use word algo as $algo deserves better reputation.

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Did you know about the tokenized Euro stablecoin 1:1 fully regulated and issued by $LCX ?

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Monerium and LCX partner to introduce tokenized EUR to crypto trading pairs

Monerium is excited to introduce a partnership with LCX, a leading blockchain innovator based in Liechtenstein. Together, Monerium and LCX will leverage each other’s legal and technology infrastruc...