According to @Excellion, it's possible stablecoins closely tied to the traditional banking system, such as Tether and USD coin (USDC), could see a new competitor emerge in the form of a bitcoin-backed stablecoin issued on Liquid.https://cryptonews.com/exclusives/el-salvador-will-be-a-serious-test-for-bitcoin-s-layer-2-net-10837.htm …
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Replying to @kyletorpey @Excellion
I've been thinking more about it and that's a tough one. Who is the counter-party? Unless you have liquid market you're basically hedging a single position I guess you start w/ several market makers holding BTC balances and hedging against each other with DLCs.
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Federation participants probably have such market positions already on exchange (respective trading desks) and could possibly divert some of this liquidity to on-chain contracts to bootstrap the liquidity.
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I would love to see an algorithmic stablecoin running fully on Liquid
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There are already some talks on that. Early stage still, but it's happening! I'll loop you in later.
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