1) As promised:
My current thoughts on crypto regulation.
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Uh...would you care to clarify if you mean only fiatcoins and that you'd have a clear carve-out/definition for onchain stablecoins like DAI, FRAX, GHO, sUSD, LUSD, etc? Because as it's currently written, FTX's policy seems to be that only fiatcoins should be legally compliant.
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For now algo stablecoins shouldn't be part of that regime.
I don't think they should be illegal, either, unless they're super irresponsible.
I think it'll take more time to get consensus for sound algo stable policy.
Replying to
So is your mental framework for stablecoins basically:
1.) fiatcoins
2.) everything else that tries to be stable using some kind of smart contract code whether it's DAI, FRAX, Terra, or something else is all in the same bucket?
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is your mental framework different?
The quality of stablecoins backed by off-chain fiat is best verified by meatspace audits of collateral and management info
The quality of fully on-chain stablecoins is based on publicly verifiable collateral and management info
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As long as the algo stables are not part of the regulations, who cares? Sound algo stable policy will never exist and is next to impossible to implement.
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Also by all means regulate the fiatcoins and make them forced buyers of short-dated US T-Bills (in addition to holding $ cash). It shores up demand for the US$ and elongates its life and GRC status. And also achieves true $-globalization.
Sorry man, this take ruins defi. Un-sanctionable finance is why I came, and probably millions of others. The old system sucks and this is just porting the old system into crypto. Boooooooo
I think you mean “floating” or “non-pegged” stablecoins, not algorithmic.
Or you could be specifically referring to endogenously collateralized stables.
We should use precise language here.
With respect, I made a video on the differences in coins.
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Stablecoins are not that complicated.
There's 3 types of stablecoins:
1. 100% idle cash backed (USDC)
2. Money Market Fund / Near-Cash backed (USDT)
3. Smart Contract backed (Frax/Dai)
2 & 3 both assume market liquidity. Cap supply as a function of available liquidity.
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It's simple; the issuing entity can *choose* to OWN liquidity at any time. Protocol Owned Liquidity (POL).
It's just decentralized fractional reserves at that point. Require POL >= x * DEX Liquidity depth on acknowledged pools.
All verifiable. Frax has this dashboard already!
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