One industry insider believes trust and decentralization are more important than the collateral of a stablecoin.
In light of recent market effects due to the collapse of the Terra USD stablecoin, several questions should be answered about what makes a stablecoin usable as the crypto market expands.over their centralized counterparts but thinks they must be coins that people can trust, which poses a dilemma for the industry.
In a conversation with Cointelegraph on May 13, Lee pointed out that the important utility stablecoins serve in the crypto ecosystem was offering traders a uniform unit of account, like the U.S. dollar does for the global markets. However, he noted that “the way in which these things are maintained is important, too.”
“The most important thing is that it holds its peg because then that single unit of account begins to be unreliable and unusable.” Lee believes that for stablecoins to be truly usable, people have to trust them. This creates a dilemma because, he said, “you can only use a currency if you trust it, but you trust it because other people use it.” In his view, that dilemma can be nipped in the bud by ensuring there is a broad use case before building because the “use case is infinitely more important than collateral.”
The issues of trust and design are at the forefront of the discussion surrounding the UST stablecoin, which lost its peg and
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